The clean energy revolution was a dead man walking. At least, that’s one story we hear.
Over the past five years, America has invested $2 trillion in clean energy. But now popular rhetoric claims those were bad investments. Renewables are losing too much money and producing too little energy. Meanwhile, the incoming Trump administration has pledged to build America’s Next Great Gas Station—pumping out large reservoirs of oil from beneath an area presently known as the Arctic National Wildlife Refuge (ANWR).
But is crude really about to be king again? Or is that just another story America is telling itself?
Before you decide, look at some numbers around ANWR. Geologists believe that, at most, ANWR can produce 500,000 barrels of oil per day (and that won’t happen before 2031). And by the time we have it, we won’t need it. America is already producing 13.5 million barrels per day, and production is growing at record rates even while demand is flatlining. In China, it’ll peak by 2027. In OECD countries, fossil fuel demand peaked 17 years ago.
Lenders are about to spend billions on new rigs, not realizing that their investments will likely become stranded assets before the debt can be paid. The world economy simply will not support the prices needed to pay off their 40-year loans.
In the long term, this is bad business. But it’s a perfect example of why America’s current energy narrative is all wrong. The shift to zero-carbon sources of power is complex and long-term, but basic economics has already proven its inevitability. We’re ignoring the fundamental data in favor of short-term political dynamics. The result is a story that’s wholly detached from reality.
This year, the world’s investment in clean energy was 2x larger than fossil fuel investment. Half the planet is already more electrified than the United States, and it’s not just rich countries: Pick one of the world’s 40 emerging economies, like India or Brazil or Chile. There’s about a one-in-seven chance its renewable energy market share is higher than any other European or North American nation.
Clean energy is attracting more global investment, not less, because the signals that shape markets—technological advances, geopolitics, economies of scale, market demand—all point its way.
New is better than old—and cheaper
Look no further than cost. Adjusted for inflation, fossil fuels have remained relatively stable over the past century. (Turns out dead organisms aren’t very good at making efficiency gains.) Wind and solar, by contrast, have plummeted 60-90% in just the last decade.
You’ve probably heard of Moore’s Law: the number of transistors on a microchip doubles about every two years, while the cost halves. Less known, however, is Wright’s Law: each time production of something doubles, costs fall by a consistent percentage.
Wright’s Law is driving renewables. Each doubling of solar capacity decreases costs by 20-30%. That’s why wind and solar now cost less than $50 per MWh, while fossil fuels often exceed $100. The energy markets have noticed—in 2023, 86% of new electricity capacity globally came from renewable sources, mostly solar and wind. This virtuous cycle will continue for the foreseeable future, as lower prices drive higher demand, leading to more production and further cost reductions.
But Wright’s Law isn’t just changing how we make power—it’s changing what we do with that power. Take China’s electric vehicle industry. Its massive domestic market and production scale have pushed entry-level EV prices down to $12,000, while advanced plug-in hybrids produced in the country could get you from San Francisco to Denver on one charge. In October 2024 alone, China sold 1.4 million electric vehicles—70% of global sales.
Energy security is national security
While the current American political discourse seemingly is focused on shifting back to fossil fuels, China and much of the world are embracing a “build, baby, build” approach to renewables—for good reason. About six billion people (86% of the global population) live in countries that import fossil fuels, leaving them vulnerable to geopolitical disruptions.
Take India and Vietnam, whose fossil fuels must travel through precarious supply chains in the South China Sea. They’re investing in energy as if their national security depends on it—because it does. India just added 24 GW of renewable energy, equivalent to half of New York State’s entire generation capacity. Vietnam’s transformation is even more dramatic: in 2018, they generated less than 22 GWh from solar, a rounding error in their energy mix. Today, they generate 18,000 GWh, representing 20% of their consumption.
As more countries follow Europe’s lead in adopting carbon border adjustments across international trade, governments and businesses increasingly recognize that decarbonization isn’t optional—it’s a competitive necessity.
The clean industrial imperative
The future of growth lies in building things: advanced domestic manufacturing facilities, AI data centers that consume energy like a small city, and other infrastructure. To remain competitive, the U.S. must increase its electricity capacity by 20-30% by 2035—an average annual growth rate of 1.7-2.4%. It might sound like a lot, but it’s well within reach: From 1985 to 2005, the U.S. added capacity at 2.5% per year. Except this time, we can—and must—do it with clean energy.
Eighty-nine countries and states have implemented emissions trading schemes and carbon taxes, covering a quarter of global emissions and generating over $100B in annual revenue. They’re not doing this because they love taxes, but because it efficiently drives growth, boosts economies, and enhances energy security.
We could learn something from these countries. The story they’re telling themselves is the one that actually reflects what’s true: the renewable energy transition is going to happen whether America decides to be a main character or not. Yet we’re still stuck in outdated debates about whether to support or oppose it. It’s like arguing about whether to embrace the internet in 1995. The market has already decided. The electric car has left the garage.
The only question is whether America will be in the driver’s seat, or the rearview mirror.