Mark Carney vs. Donald Trump: Energy Policy, Climate Finance
How does Ed Hirs compare the energy policies of Mark Carney and Donald Trump, and what are the economic and environmental consequences of “Drill, Baby, Drill” versus sustainable investing?
Yale-trained energy economist Ed Hirs contrasts the leadership and philosophies of Mark Carney and Donald Trump in this in-depth interview with Scott Douglas Jacobsen. Hirs highlights Carney’s global credibility and his commitment to sustainable finance, in stark contrast to Trump’s transactional, fossil-fuel-driven approach. Hirs critiques the myth of U.S. energy independence, explains the economic flaws in “Drill, Baby, Drill,” and underscores the long-term viability of renewables. He outlines how market forces, climate data, and energy transition are reshaping global policy—regardless of political shifts. Hirs warns of urgent climate tipping points, echoing voices like Hawking, Keeling, and Nordhaus.
Scott Douglas Jacobsen: Today, we are here with Ed Hirs. He’s a Yale-educated energy economist, an inaugural energy fellow and lecturer at the University of Houston. He teaches undergraduate and graduate courses in energy economics and is widely recognized for offering clear, apolitical analysis on complex energy issues. He is frequently quoted in both national and international media.
Hirs has authored numerous opinion pieces and academic publications on energy markets, energy policy, and corporate governance. He also co-founded and co-chairs the Yale Alumni in Energy conference, an annual event focused on demystifying energy policy and promoting transparent, fact-based discussion free of political spin. He is considered a trusted voice in public discourse on energy finance, the Texas electricity grid, and global energy security.
How would you characterize the ideological and economic policy contrast between Mark Carney and Donald Trump?
Ed Hirs: Well, there’s a difference in style and philosophy, perhaps more than in explicit economic policy. Mark Carney is essentially everything that Donald Trump is not. Carney earned degrees from Harvard and Oxford, where he completed a doctorate in economics. He worked for over a decade at Goldman Sachs, served as Governor of the Bank of Canada from 2008 to 2013, and then as Governor of the Bank of England from 2013 to 2020 — making him the only person to head the central banks of two G7 countries. He guided the Bank of England through Brexit and was a key figure during the global financial recovery. He has advised governments and multilateral institutions and currently serves as the UN Special Envoy on Climate Action and Finance.
Carney is a highly competent, globally respected expert in monetary policy, financial markets, and climate finance. He understands that no single individual can dictate the direction of markets. Markets operate on expectations, seek profit, and tend to converge toward equilibrium by closing arbitrage gaps.
President Trump, by contrast, comes from the private real estate sector. He has a contentious and legally complex business history, including multiple bankruptcies. According to public records, several of his casino and hotel ventures failed — most notably, four Atlantic City casinos filed for bankruptcy under his leadership. Trump tends to view large institutions, including banks and central authorities, more transactionally and often antagonistically.
So the contrast in style, substance, and global credibility is clear. I would bet on Carney in a poker game against President Trump any day.
Jacobsen: What do you think of Carney’s advocacy for sustainable investing and his influence on shaping Canada’s international economic policy? How does that contrast with what you might call “Drill, Baby, Drill 2.0”?
Hirs: Carney’s advocacy for sustainable investing is rooted in rigorous economic reasoning and climate risk management. As a central banker and now as the UN Special Envoy, he’s championed the idea that climate risk is financial risk. He helped launch the Task Force on Climate-related Financial Disclosures (TCFD), aimed at making companies disclose how climate change impacts their business.
His work supports aligning financial systems with net-zero goals, which stands in direct contrast to extractive-first policies like “Drill, Baby, Drill 2.0,” which prioritize short-term fossil fuel development over long-term sustainability. While the Trump administration rolled back environmental regulations and withdrew from the Paris Agreement, Carney's approach has been about integrating climate policy into mainstream economic planning and financial regulation.
Even with resistance in places like the United States, the overall trajectory of sustainable investing is forward. Eliminating or defunding climate data collection agencies does not stop global warming or market adaptation. Investing in sustainable energy production is central to future global economic growth, particularly as the Global South develops. Over the next 40 to 50 years, an estimated 2 to 3 billion more people will join the global population — and energy access will be critical to improving their quality of life without worsening the climate crisis.
The development of the Cosmos field offshore Ghana — and the incredible wealth it has generated throughout West African nations — has extended the lifespans of people across the continent. These populations are going to want, and are already moving toward, energy-intensive technologies. They are not going to get Ford F-150s, but they all want iPhones. They all want the Internet. They want safe and reliable food resources.
And so, no matter what the U.S. or Canada does, we are going to have to adapt to what happens across the rest of the world. The Trump administration holds the view that it is not necessary to accommodate either U.S. behavior or global behavior — or to account for the consequences that come from that stance.
Carney, on the other hand, has a different view — one that many developed nations, the EU, and China share: we need to plan ahead. We are seeing more and more weather disasters arise and intensify due to a warming atmosphere. A warmer atmosphere holds more moisture, and when that moisture is released, it causes increasingly devastating effects.
The melting of the polar ice caps is another major concern. Where I grew up, along the U.S. Gulf Coast, the water level is now 16 inches higher on average than it was when I was a child.
Jacobsen: Can you address “Drill, Baby, Drill” as well?
Hirs: Certainly. “Drill, Baby, Drill” is not going to work. The U.S. is currently producing roughly 13 million barrels of oil per day, of which about 2 million barrels per day are light ends — natural gas liquids (NGLs) that sometimes get classified as crude oil.
Texas, for example, has been producing around 4 million barrels a day, mainly from the Permian Basin in West Texas. This oil is light. The U.S. is more than self-sufficient in light grades of crude oil. However, the U.S. refinery system depends on both light oil and heavier grades — including, at times, up to 4 million barrels a day imported from Canada.
So, the U.S. is not energy independent, and it is inaccurate to describe the U.S. as energy independent.
And, in fact, in the tariff war, if Canada decided to stop exporting crude oil to the United States and stop selling electricity down to the United States, the U.S. would be in a heck of a fix. The Midcontinent region would have to find and source refined products from somewhere else. There are not enough power plants in the Northeast or through the Midcontinent Independent System Operator — MISO — for the U.S. to operate independently of Canada.
So, the “Drill, Baby, Drill” issue also relates to the cost of oil. Tight formations require higher prices. The Dallas branch of the Federal Reserve — the Federal Reserve Bank of Dallas — published its Energy Survey for the fourth quarter of 2024, and 85% of the respondents said they would not invest or drill new wells at a price below $70 per barrel. That forecast includes the year ahead.
Now, with tariffs on steel 25% higher, the cost of drilling these wells has gone up. The price of oil is somewhere around $60 per barrel at this moment. So, we are going to see the rig count in the United States drop like a rock.
And because these tight formation wells tend to produce nearly 80% of their lifetime output in the first two years, we are going to see a steep decline in U.S. oil production through the end of the year. The “Drill, Baby, Drill” mantra simply will not work at $60 oil or less.
The opening of lands in the Eastern Gulf of Mexico and along the Eastern Seaboard — lands that President Trump had actually removed from drilling and exploration during Trump 1.0 — will not add anything meaningful to U.S. production. It takes too long for companies to evaluate, explore, drill test wells, and then bring them to market — up to 15 years.
Opening up ANWR — the Arctic National Wildlife Refuge — and other Alaskan lands to drilling is not going to help either. That oil needs to sell at $100 per barrel just to make it worth the cost of moving men and material up to Alaska to begin exploration again.
What Trump has asked for from the Saudis is clear — he’s asked for low oil prices, and he’s getting them. During Trump 1.0, the average price of oil was lower than it was during the Obama administration, and lower than it has been during the Biden administration — even setting aside the pandemic-related price suppression.
Trump — more than 30 years ago — was taking out advertorials in The New York Times and The Wall Street Journal, calling for low oil prices. Essentially, he argued that high oil prices are a tax on living. That idea has been one of his touchstones throughout both his private and public careers. And the Saudis? They are willing to go along with it. They have about 2 million barrels a day of excess production capacity — or production in reserve.
Increasing production at this time is helpful for OPEC+ to punish those member nations that have been cheating on their quotas. So, the low oil price helps Trump. Of course, we saw from his trip to the Middle East that there is a lot of reciprocal investment coming back into the United States from those OPEC members who have made a lot of money over the years. It is a real issue.
In fact, back in 2010, we wrote a paper titled Crude Oil and National Security, where we discussed the rationale for returning to President Eisenhower’s oil import quota system. That system was originally intended to keep the United States relatively oil independent. It was eliminated by Eisenhower’s former Vice President — who by that time was President Richard Nixon — when he struck a deal with OPEC and Saudi Arabia to maintain low oil prices in exchange for an expanded U.S. defense umbrella. That, of course, led to the United States becoming extremely dependent on foreign crude, triggering the Arab oil embargo and everything that followed.
So, this is not just an economic issue — it is truly a national security issue. At the moment, the only way the United States can project naval power and maintain air superiority is with hydrocarbons. You should ask about that.
Jacobsen: YSo, there are those who champion decarbonization efforts — such as Carney and his allies — and others who do not, such as Trump and some of his allies. Will this create tension in energy policy and in foreign relations — binational or multinational?
Hirs: It should not. Keep in mind that during Trump 1.0, a great deal of progress was actually made toward decarbonization of U.S. energy supplies. This was led primarily by the states and state-level initiatives. Also, the extremely low price of natural gas — relative to both oil and coal — pushed coal-fired power plants out of the power stack across America and reduced the use of liquid petroleum products.
So, natural gas has become the bridge fuel, the substitute fuel. In Texas, for example, we are seeing extreme growth in both wind and solar energy — although the legislature is about to pass a bill to try to slow that down. But Texas — the home and oil capital of the world — currently has the largest utility-scale solar fleet and the largest utility-scale wind fleet in the country. Soon, it will have the largest battery storage fleet as well.
This is a substitution of electrification for hydrocarbon fuels. And as economists, we know that the low marginal cost producer wins out in the end. Because there is no fuel cost for wind or solar, those technologies will undercut natural gas, oil, and coal over time. That is where we are heading.
It is called the transition for a reason. It is not going to be smooth. Everything that is happening in Washington — and in Texas, for example — is making sure that it is not smooth.
Jacobsen: And there is, quite frankly, a lot of science fiction that has gone into energy commentary over the decades. Figures like Isaac Asimov and others — humanist figures — were big on this.
Carl Sagan and Isaac Asimov — both humanist figures and major public science educators. One was more of a writer than a practicing scientist, but regardless, some of their legacies are being carried forward today by the American scientific community — by people like Neil deGrasse Tyson, Bill Nye, and others.
So, we still have these public figures who speak about science, energy, and the future. One big topic that has always come up in that commentary, especially in the science fiction context, is the Kardashev scale.
And so, in that larger picture, solar is pretty much the endgame — in terms of any advanced civilization’s energy source. The question, then, is: will this transition happen before climate change renders life unsustainably livable? I know Chomsky had a different phrasing for it.
Hirs: And that was one of Stephen Hawking’s final warnings — that humankind would eventually fry itself, through the generation of electricity and the misuse of AI. He may yet be right about that.
At our recent conference at Yale — just two months ago — we had Bill Nordhaus, one of my former professors and a Nobel laureate in climate economics, as well as my classmate and dorm mate Ralph Keeling — the scientist behind the Keeling Curve for CO₂ levels in the atmosphere. They had never met before. Yet they referenced each other’s work in their presentations. A physics major like Ralph had no reason to visit the econ department back in the day, so we finally brought them together. That was pretty cool after almost 50 years.
Now, going back to the Kardashev scale, at the time we were estimated to be around a Type 0.7 civilization — which is kind of cute. But the reality is more urgent. We know that we have now surpassed the 1.5°C global warming threshold.
Ralph Keeling’s projections show that if we do not begin actively reducing CO₂ in the atmosphere within the next five years, and if we do not act dramatically, we will not be able to avoid breaching the 2°C warming limit.
Jacobsen: I remember when President George H. W. Bush dismissed concerns about the ozone hole, which was caused by fluorocarbons.
Hirs: Yes — fluorocarbons. Apparently, what led him to change his mind was personal experience. While at his usual summer retreat — the Walker Point Compound in Kennebunkport, Maine — he got a blistering sunburn on his head because the ozone hole had extended over the bay. He got cooked.
Jacobsen: Is that kind of personal impact still relevant today?
Hirs: Yes, absolutely.
Jacobsen: So, when I talk to businesspeople and economists — especially those outside environmental fields — they often speak about stability as if it were a guiding principle, even if they do not state it directly. So, it is probably fair to say: markets and business love stability.
Do you think Trump will eventually provide some stability for the energy sector, particularly in supporting a more sustainable future? Or no?
Hirs: I do not see it coming in this term. Certainly, in his first term, Trump was actively pushing for low oil prices. But of course, when oil prices are low, the economic incentive to shift to alternatives — like wind and solar — diminishes. So, in that sense, he was undercutting the transition to more sustainable energy sources.
Eventually, I expect to see the shift occur — with or without Trump. I view the current situation as a temporary slowdown. There is a 1.3-gigawatt solar farm about to be commissioned north of Dallas. It covers 18,000 acres. That 1.3 gigawatts of capacity will be supported by just 12 full-time employees — six of whom are shepherds who manage the land and livestock grazing beneath the panels.
By comparison, a 1.3-gigawatt nuclear power plant would require around 500 or more employees. A coal-fired power plant would need slightly fewer than that, but it also faces serious materials handling issues — coal coming in, ash going out, and water remediation processes.
Natural gas power plants, particularly the newer models, are essentially jet engines. They require maybe 100 to 200 employees per gigawatt unit. So when you look at the operating costs of these different power plants, along with fuel costs, the economics clearly favor wind and solar — especially as battery storage technology improves and the cost of battery installations continues to drop. 1.3 gigawatts is enough to power close to a million American homes.
It’s a huge amount of energy. Of course, in Texas, it might not quite power a million homes — because, well, we run the air conditioner too damn much.
Jacobsen: Thank you for the opportunity and your time, Ed.
Scott Douglas Jacobsen is a Writer and Editor for A Further Inquiry. He is the publisher of In-Sight Publishing (ISBN: 978-1-0692343) and Editor-in-Chief of In-Sight: Interviews (ISSN: 2369-6885). He writes for The Good Men Project, International Policy Digest (ISSN: 2332–9416), The Humanist (Print: ISSN 0018-7399; Online: ISSN 2163-3576), Basic Income Earth Network (UK Registered Charity 1177066), A Further Inquiry, and other media. He is a member in good standing of numerous media organizations.
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