Energy Prospectives #16 - Government and Energy (Highlights)

Joseph E. Stiglitz, 2001 Nobel prize in Economics, and José Manuel Durão Barroso, former president of the European Comission (2004-2014), were the guest speakers for the 16th Energy Prospectives, a series hosted by the Naturgy Foundation and IESE Business School to promote a profound debate on the energy transition.
During his presentation, Stiglitz suggested that if China wants to help the US become greener by providing subsidies for cheaper solar farms, the US should accept these subsidies to make its energy less expensive. The Nobel prize economist also stated that if being green was the dominant mindset, the US would be welcoming these subsidies from China.
Stiglitz believes that innovation will be critical for the green transition, which involves changes to various systems like agriculture and urban planning, not just the energy sector. Regarding the usage of fossil fuels during the Energy Transition, he argued that the US has enough oil reserves to last until 2050, 2060, and 2070, and that the cost of production for fracking is relatively low, which will keep gas prices from getting too high.
José Manuel Durão Barroso, acknowledged that the climate agenda has a cost, and there is already some backlash against it. Barroso warned the audience that some kind of recalibration is already taking place inside the EU, and that there will be ways to postpone, mitigate, or create exceptions to the climate agenda at the European level, and the ambition may not be as high as originally planned.
The former president of the European Comission also expressed his skepticism towards the possibility of achieving the goal of carbon neutrality by 2050 with the current level of technology. Barroso believes major technological disruptions, including those fueled by AI, will be necessary. And regarding current technologies, he pointed out the fact that if there is indeed less investment in fossil fuels, such as gas, the prices will likely go up due to less supply.
The session was moderated by IESE professor Jordi Gual, who suggested that policy should be more open to alternative technologies instead of solely focusing on electrification. In the opening statements, Rafael Villaseca, president of the Naturgy Foundation, highlighted the need to consider not only the current situation and desired goals, but also how to achieve them when addressing the significant problem at hand - the Energy Transition. Franz Heukamp, IESE Business Schools’ dean, said that hosting this kinds of events is extremely valuable, thanks to the combination of academic research and its applicability in entrepreneurial and business settings.
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