Is Uncertainty Now Our Friend in the Climate Fight?

Remember Solyndra? This was the maker of supposedly revolutionary new solar panels that would radically reduce the cost of clean energy and if the boosters were to be believed, help usher in an era of clean, low-carbon energy. The company filed for bankruptcy just two years after a questionable $535-million loan co-signed by the Obama administration. Since then, the name Solyndra has been bandied about prolifically by certain opponents of clean energy, who have sought to cast aspersions over the broader clean energy economy as being risky, impractical, and ideologically driven.

I’m not here to relitigate the specifics of the Solyndra story. Clearly, mistakes were made, "inaccurate statements" may have been told, and oversight was not exactly what it should have been. What I am trying to do is illustrate how one specific failure can cast a shadow of doubt over a much broader cross-section of the clean energy economy.

Fueled in part by pure partisanship and politicization, the Solyndra story helped create an atmosphere where citizens started to choose sides: either you were for clean energy, climate, and the environment on the one side, or you were for fossil fuels, the economy, and "real American" working families on the other.

Speaking to David Worthington of SmartPlanet before the 2012 presidential election, political expert Larry Sabato predicted that the scandal would fundamentally undermine Obama’s ability to deliver a clean energy agenda: “Fairly or not, when an administration makes a costly mistake like Solyndra that wastes a ton of tax money, there are consequences. In this case, one of the consequences will be critical questioning of every dollar spent on subsidies for renewable energy projects.”

While it’s impossible to determine what could have been, had Solyndra not collapsed so spectacularly, it is fair to say that renewable energy investments did not take off the way some of us were predicting during the early days of the Obama administration. And while the Clean Power Plan was certainly an achievement, we did not end eight years of Obama with the radically different energy landscape that some of those campaign speeches might have promised.

Indeed, given vocal hostility to climate action among conservatives, which culminated in former President Donald Trump announcing a withdrawal from the Paris Climate Accords in 2019, there is a certain fiscal, if not ecological or moral, logic to investors and policymakers slow-walking their climate commitments to see which way the wind was blowing. After all, if there is one thing that markets hate more than anything else, it’s uncertainty. And who wanted to be investing in the next Solyndra? 

What I am beginning to wonder, however, is if the same uncertainty and nervousness that once held back renewable energy and climate action may now start to hinder fossil fuels.

Take the story of a supposed new coal mine that will be built in Britain. Even as the country’s latest conservative Prime Minister Rishi Sunak was (once again) banning fracking and reversing a moratorium on wind and solar, he was also greenlighting a proposed coal mine. And yet, the approval of this coal mine by no means guarantees that it will be built—not least because the seemingly ascendant Labour Party remains vehemently opposed to the decision.

Here’s how Lisa Nandy, Shadow Secretary of State for Levelling Up, Housing, and Communities, described the decision to the House of Commons: “I have one question for the secretary of state today: what on earth is he thinking? The decision to greenlight the reopening of the Woodhouse colliery is bad. It is bad policy and it is bad politics. It is the latest in a string of absurd decisions from a government in chaos.”

Meanwhile, Shadow Secretary of State for Climate Change and Net Zero Ed Miliband stated explicitly that the party would seek to reverse the approval and prevent this project from ever going ahead: “A Labour government will leave no stone unturned in seeking to prevent the opening of this climate-destroying coal mine, and instead ensure we deliver the green jobs that people in Cumbria deserve.”

That leaves potential investors in a bind. Do they press ahead under the current policy environment, hoping to gain enough momentum that the project becomes an inevitability? Or do they hold off, given the potential for policy reversals and government opposition in the not-too-distant future? 

And this is just one area of uncertainty among many regarding high-carbon technologies around the world. Will investors continue to support car makers who are not taking electrification seriously, given policymakers are increasingly enacting bans on gasoline-powered cars? Will they continue to put money into coal, when not even Trump’s supposed “digging” of the dark stuff could revive this fossil fuel’s fortunes? Are they even as sure as they once were about gas, now that Europe is fast-tracking its clean energy transition? And with some conservative voices here in the U.S. beginning to talk about renewables, relying on a political reversal of these trends is also a questionable strategy. 

Speaking of uncertainty, absolutely nothing is certain. And nothing is inevitable. Institutional investors continue to push ridiculous amounts of money into fossil fuels and related infrastructure projects—and they do so in the knowledge that governments continue to subsidize them. But the confidence in fossil fuels that investors once had is beginning to look like an increasingly risky bet.