At the Council on Foreign Relations, Michael Levi has a thoughtful response to my April 9 post on carbon policy and Iran, “Carbon Cap Would Deny Iran Precious Petrodollars: Over $100 Million A Day.” Levi expressed his concern at the idea that U.S. dependence on imported oil “makes Iran $100 million richer every day.” While recognizing that the methodology used was sound, Levi noted:
The problem is that while the Iranian nuclear problem is unfolding on a relatively short timescale, most of the projected decline in oil revenues comes in the out years. The annual savings, using CAP’s own methodology (which is admirably transparent), reach less than $5 billion annually in 2015, or about $10 million dollars a day. (That roughly doubles by 2020.) That’s about 2-3% of what EIA thinks Iranian oil revenue will be in 2015 (based on the 2009 IEO) – a nontrivial number, but not one that’s of much strategic consequence.
Hopefully it was transparent in my post that this is a long-term strategic shift (after all, there is a pretty chart to that effect), not a short-term crisis response. I will take issue with the idea that a long-term change isn’t “of much strategic consequence.” The generational move to a low-carbon economy will likely determine the arc of history in the coming decades.
It is of course difficult to get into nuance in a single blog post, but it comes in the context of my colleagues’ work — Matt Duss and Max Bergmann have written many thoughtful posts on how the United States and the international community should engage with Iran and the Middle East in the here-and-now.
I would certainly prefer if the Beltway dialogue focused more on nuanced discussions of how, say, an international commitment within the next year or two to a low-carbon economy by 2050 would reshape the geopolitical balance of power, especially vis-a-vis petrostates.
But we literally have our counterparts at the Heritage Foundation arguing that the United States should engage in nuclear-armed “preventative war” with Iran, and that climate scientists are engaged in a global conspiracy to deceive the American public into passing a proto-fascist energy tax.
So there’s a bit of work to be done before serious discourse rules the day.
Michael Levi responds:
I’m quite interested in the broader question of what energy geopolitics would look like in 2030 if we were part way to a circa-2050 low-carbon economy — it’s a tricky question that has received little careful thought. I may do a post outlining some ways to think about that question.