The Troubled Energy Transition: How to Find a Pragmatic Path Forward
Daniel Yergin, Peter Orszag, and Atul Arya, Foreign Affairs, March/April 2025
In 2024 global production of wind and solar energy reached record levels—levels that would have seemed unthinkable not long before. Over the past 15 years, wind and solar have grown from virtually zero to 15 percent of the world’s electricity generation, and solar panel prices have fallen by as much as 90 percent. Such developments represent a notable advance in what is called the energy transition—the shift from the current hydrocarbon-dominated energy mix to a low-carbon one dominated by renewable sources.
Yet 2024 was a record year in another regard, as well: the amount of energy derived from oil and coal also hit all-time highs. Over a longer period, the share of hydrocarbons in the global primary energy mix has hardly budged, from 85 percent in 1990 to about 80 percent today.
In other words, what has been unfolding is not so much an “energy transition” as an “energy addition.” Rather than replacing conventional energy sources, the growth of renewables is coming on top of that of conventional sources. And with Donald Trump’s return to the U.S. presidency, priorities will focus again on conventional energy production and what his administration calls “energy dominance.”
This was not how the energy transition was expected to proceed. Concern about climate change had raised expectations for a rapid shift away from carbon-based fuels. But the realities of the global energy system have confounded those expectations, making clear that the transition—from an energy system based largely on oil, gas, and coal to one based mostly on wind, solar, batteries, hydrogen, and biofuels—will be much more difficult, costly, and complicated than was initially expected. What’s more, the history of past energy transitions suggests that this should not come as a surprise: those were also “energy additions,” with each adding to rather than eliminating prior sources.
As a result, the world is far from on track to achieve the often stated target of reaching, by 2050, “net-zero emissions”—a balance in which any residual emissions are offset by removals of emissions from the atmosphere. And there is no clear plan for getting on track or for delivering the magnitude of investment that would be required to do so. The International Energy Agency projected in 2021 that, for the world to meet 2050 targets, greenhouse gas emissions would need to decline from 33.9 gigatons in 2020 to 21.2 gigatons in 2030; thus far, emissions have gone in the other direction, reaching 37.4 gigatons in 2023 (and there’s no reason to think that a 40 percent decline in just seven years will be remotely feasible). Other facts similarly reflect the challenges of transition. The Biden administration set a goal of electric vehicles accounting for 50 percent of new cars sold in the United States by 2030; yet that number remains just ten percent, with automakers slashing investment in electric vehicles as they face multibillion-dollar losses. Offshore wind production in the United States was supposed to reach 30 gigawatts by 2030 but will struggle to reach just 13 gigawatts by that date. And Trump administration policy changes will make these gaps even larger.
Part of the problem is sheer cost: many trillions of dollars, with great uncertainty as to who is to pay it. Part of the problem is the failure to appreciate that climate goals do not exist in a vacuum. They coexist with other objectives—from GDP growth and economic development to energy security and reducing local pollution—and are complicated by rising global tensions, both East-West and North-South. And part of the problem is how policymakers, business leaders, analysts, and activists expected the transition to go, and how plans were shaped accordingly.
What is becoming clear is that the shift in the global energy system will not unfold in a linear or steady manner. Rather, it will be multidimensional—unfolding differently in different parts of the world, at different rates, with different mixes of fuels and technologies, subject to competing priorities and shaped by governments and companies establishing their own paths. That requires rethinking policies and investment in light of the complicated realities.