I. Physical ConstraintsEnergy is not just another commodity. It’s absolutely fundamental to our modern civilisation. Every thing we do—from feeding ourselves to staying warm to manufacturing medicines—requires energy input. And not all energy sources are created equal.A barrel of oil contains about fifty times more energy than the most advanced viable battery of the same weight. This gap is never going to close significantly. It can’t. The energy a battery can supply is dependent on the flow of electrons between different materials, each of which can provide a certain number of electrons for any given weight. You can improve the battery’s charging time or durability or the number of times it can be charged before it starts to fail, but you can’t change the fundamental composition of the materials available any more than you can change lead into gold.Batteries, then, are heavy and they’re going to remain that way. This is not a problem for many applications—including phones, laptops, and small household devices. In these cases, the lower energy density isn’t a major drawback since the devices are small and frequently rechargeable, and weight isn’t a limiting factor in their performance. But for things that need energy input to move—cars, trucks, planes—the extra weight creates a cascading series of problems. A heavier vehicle needs more energy to move, which means that it needs bigger batteries, which means adding yet more weight, which means that more energy is needed to move it. Thanks to this weight penalty, electric vehicles often require significantly more raw materials in their construction, and more energy in their day-to-day operation, than their advocates admit.Aircraft face uniquely stringent weight considerations: every kilogramme of battery reduces payload capacity while, unlike fuel, batteries don’t become lighter during flight. So the reduced payload that would result from using batteries means fewer passengers or less cargo per flight, which in turn means we would need to schedule more flights to move the same number of people or amount of goods. In addition, aircraft combustion engines operate at relatively steady speeds—there’s not much acceleration or deceleration, no sitting in traffic, and no braking from which energy can be recouped. Since there is a direct relationship between weight and range or payload, aircraft are naturally incentivised to be as efficient as possible.So battery-powered aircraft are unlikely to work well in the foreseeable future—but what about cars? It’s the policy in many developed countries to shift to electric vehicles—in the UK, they’re planning to ban new sales of internal combustion cars from 2035, and in Norway almost 90 percent of new car sales are electric due to carrot-and-stick policies. But from a full-system environmental perspective, this doesn’t make sense. Since not only are there weight penalties—batteries make cars heavier and heavier cars then require even bigger, heavier batteries to move—but there are issues of energy efficiency to take into account.In any sort of combustion engine, you can convert no more than about forty percent of the overall energy in fuel into usable energy. That means that even though petrol has fifty times the energy of a battery, you’re only going to be able to use twenty times that energy. Batteries are different—you can convert about ninety percent of the energy in batteries to usable energy—and there are no tailpipe emissions. But first you have to charge the batteries and we’re currently using mainly using fossil fuels to generate the electricity to charge batteries. So we burn fossil fuels in big stationary engines to generate electricity, and despite being more efficient than car engines (since weight isn’t a factor), these stationary engines are still only around 40–50 percent efficient. And by the time this electricity gets to your plug socket, charges your car, and is then converted back into motion, you’re looking at an efficiency very similar to that of an internal combustion engine. And that’s without factoring in the extremely energy-intensive refining processes used in the production of battery materials, or the batteries’ limited lifespans.Hybrid vehicles, done properly, maximise the strengths of both combustion engines and electric systems while minimising their weaknesses. The key point is that most vehicles spend their time operating far from their optimal efficiency point, such as when they’re idling in traffic or accelerating from a standstill. A hybrid system allows each power source to operate when it’s most efficient. A well-designed hybrid system can use regenerative braking to capture the same proportion of energy as that of a fully electric vehicle. And because hybrids don’t need to carry hundreds of miles worth of battery capacity, they can achieve this with battery packs a fraction of the size of those used in fully electric vehicles. These smaller batteries can still provide enough power to allow the combustion engine to continue to run in its most efficient range.When we consider the full lifecycle environmental impact—from manufacturing to operation to eventual disposal—hybrids, when optimised for efficiency, have some serious advantages. The dramatically smaller battery requires far less mining of rare, energy-intensive materials like lithium and cobalt. The reduced weight means less energy is needed for everyday operation, regardless of whether that energy comes from the battery or fuel tank. And because the battery isn’t subjected to deep discharge cycles it’s more likely to last the lifetime of the vehicle rather than requiring replacement. And the battery pack and resulting car will be significantly cheaper and therefore more attractive to consumers.Yet current environmental policies, focused exclusively on tailpipe emissions, effectively penalise hybrid systems. By treating any combustion engine emissions as inherently problematic, regardless of overall system efficiency, these policies push manufacturers toward either fully electric vehicles, or hybrids with much larger battery packs, which will have larger total environmental impacts when manufacturing, charging, and lifespan are considered. The hybrid approach acknowledges and works within fundamental physical constraints rather than trying to overcome them. Instead of fighting against the superior energy density of liquid fuels, it leverages this advantage while using electric systems to compensate for combustion engines’ weaknesses. This kind of engineering optimisation—working with physical laws rather than against them—should be at the heart of our environmental policies. Unfortunately, it is not.The same physical realities that constrain battery technology also apply to renewable energy generation. Neither wind turbines, nor solar panels, nor hydroelectric plants create energy—they harvest it from existing environmental systems. There are fundamental limits to how much energy we can extract before we start affecting those systems themselves.For example, to meet our current global energy consumption using solar panels would require covering an area roughly the size of Iran with dark, heat-absorbing panels. This isn’t primarily a land use issue since solar panels can be put onto existing roofing so they don’t take up extra space, but it would involve fundamentally altering the way in which a vast area interacts with solar radiation. Natural surfaces like soil, vegetation, and desert reflect about 25–40 percent of incoming sunlight back into space. Solar panels are specifically designed to absorb as much light as possible, so they reflect significantly less. All the energy that isn’t reflected is either converted into electricity (up to a maximum of around 30 percent) or becomes heat (the remainder).If we concentrated the solar panels in one area, we would create an artificial dark zone the size of a large country, thereby dramatically changing how that portion of Earth’s surface interacted with the sun’s energy—think of how hot a black car seat gets on a sunny day, and then try to make that seat get as much sun as possible for an idea of what I’m talking about. The local temperature increases would alter wind patterns, affect rainfall, and create heat islands that extended well beyond the solar farms themselves. It would change wind and weather patterns, which are caused by the sun heating different parts of the Earth at different rates. Like the battery energy problem, this would present another cascade of physical consequences that can’t be engineered away. Of course, in reality the panels would be globally distributed, but the overall thermodynamic effect would be the same—the same amount of solar energy would be absorbed, and it would have similar local effects.Solar power has its place, particularly for distributed local generation. But when we talk about replacing fossil fuels with solar, we’re not just talking about energy policy any more. We’re talking about deliberately modifying Earth’s surface characteristics at a scale large enough to have serious climatic consequences—all in the name of preventing climate change.What about the environmental impacts of hydroelectric power? To protect communities from the increased flooding that climate change may bring, we deliberately flood vast valleys, permanently displacing communities and submerging entire ecosystems. The Three Gorges Dam in China alone displaced 1.3 million people and flooded 632 square kilometres of land. Meanwhile, these massive reservoirs alter local weather patterns and create their own flood risks through changed river dynamics. In addition, hydroelectric dams are a source of methane emissions—a potent greenhouse gas. The ecosystems downstream of hydroelectric plants are totally transformed because these plants dramatically alter the character of rivers that have been there for thousands of years.Most hydroelectric projects are smaller and more distributed than the Three Gorges dam. But each project generates roughly the same energy per flooded area, so the overall environmental impact is the same. Likewise, wind turbines work by removing the kinetic energy from moving air and turning it into electricity which is consumed elsewhere—i.e. they slow the wind down as much as possible in order to generate as much electricity as they can for their size. This obviously also affects the local environment.Even if we overcame these issues of scale and environmental impact, we’d still face an immutable physical reality: the sun doesn’t always shine—and even in the sunniest climates, it sets at night—and the wind doesn’t always blow. The more we rely on renewables, the more we will be reliant on massive energy storage systems to bridge these gaps. Remember the earlier point about battery energy density and now imagine the scale of the problem when you have to store enough energy to power entire nations through still, cloudy weeks. The sheer quantity of materials required would be immense.Hydrogen is often touted as the solution to this storage problem. After all, hydrogen contains about three times more energy per kilogramme than petrol. But hydrogen also takes up about four times more space than petrol to store the same amount of energy, even when liquified at an extreme -253°C. The process of capturing hydrogen by applying electricity to water is only about 75 percent efficient. Then you need to either compress the hydrogen under extremely high pressure or cool it to cryogenic temperatures—processes that consume another 30 percent or so of your energy. When you eventually want to use that hydrogen in a fuel cell to generate electricity again, you lose another 40 percent of what’s left. All told, you end up getting back less than 40 percent of the electrical energy you started with. Each conversion step loses energy—it’s an inescapable fact of thermodynamics. To compensate for the fact that you’re wasting a good 60 percent of the electricity you’ve generated from your renewables, you need to overbuild renewable capacity by enormous amounts. (We’d have to increase the area taken up by our solar panels to more than the size of India.)One alternative is pumped storage—pumping water uphill when there’s excess power and releasing it through turbines when needed. But this would require flooding even more valleys to create the necessary reservoirs. All energy storage systems are subject to the same fundamental law of physics: you cannot convert energy from one form to another without wasting energy in heat. The wastage involved would be significant.So the laws of thermodynamics and the physics of intermittency force us to either overbuild renewable capacity enormously or accept that we’ll remain dependent on other power sources. I’m not sure there is a third option, except to power our lives at the whim and mercy of the weather.II. Financial Incentives

Then there’s the peculiar cost structure of renewable energy. With electricity generated from fossil fuels and nuclear, the major driver of cost is the fuel itself. But renewable energy is different—there’s no fuel cost, so the generated electricity cost depends on the price of the equipment. Manufacturing solar panels, wind turbines, and batteries requires energy-intensive processes, enormous amounts of capital investment, and industrial ecosystems. To make our domestic industries economically competitive we need energy costs that are comparable to those of our competitors. And if we’re using renewable energy, that means the equipment costs must be as low as possible. So as we pursue aggressive renewable targets, we become increasingly dependent on countries where the equipment can be manufactured more cheaply than it can in the West, especially in the case of electric vehicles.

It’s a vicious cycle: We buy from countries where equipment is cheapest, helping those countries develop their manufacturing expertise, industrial ecosystems, and economies of scale. It becomes increasingly unreasonable for us to try to build our own equipment as we lack the resources to do it for anything near the cost we can buy it for. And since our energy costs are now tied to equipment prices, and energy costs are a major factor in industrial competitiveness, and are politically sensitive in a democracy, any attempt to adopt higher-priced, domestically-produced equipment would result in higher energy costs and further undermine our industrial competitiveness and economic stability.

One country appears to understand the dynamic perfectly. China has used its cheap coal-powered manufacturing base and massive subsidies to become the dominant producer of ‘green’ technology. They seem to have recognised that, paradoxically, the more aggressively Western nations pursue renewable energy targets, the more dependent they become on (fossil-fuel-powered) Chinese manufacturing. So while we in the West pursue aggressive renewable targets and shut down ‘dirty’ industries like oil and steel production, we’re not necessarily reducing global emissions—but we are becoming increasingly dependent on nations like China, with fewer environmental controls. This numbers are stark: China currently produces over 80 percent of solar panels, around 65 percent of wind turbine components, and over 75 percent of lithium batteries. Western manufacturers are increasingly struggling to compete.

So how did we get here? Why does the UK government think it is ecologically sound to shutter their oil industry, with its extremely stringent environmental regulations, just to import oil from countries with laxer standards? Why are we being forced to adopt electric cars at the expense of our automobile industries, our environment, and poor Congolese miners? Why did Germany abandon energy diversity and security in favour of imported Russian gas, with the predictable consequence of geopolitical imbalance and the decimation of their industrial base?

I think there are a few reasons for our energy policy failures—a misguided wish to “do good” is one, and total ineptitude is another, but there may also be some powerful financial incentives involved.

Imagine you’re managing a massive investment fund. Traditional industries—oil, automotive, manufacturing—are stable, but provide only small returns: eight percent annually, if you’re lucky. Then you notice something interesting. There are a host of green technology companies. They’re not yet profitable—maybe they’re making electric cars that cost too much, or solar panels that can’t compete with coal. But unlike traditional companies whose success is unpredictable, these companies’ success depends almost entirely on government policy. You can invest heavily in these companies while their stocks are cheap, then use your financial influence to push for policies that would make their products mandatory. This is not even that expensive—all it will take is a few strategic political donations, funding for friendly research institutes, aggressive PR campaigns about climate urgency. Maybe you can start a few environmental investment funds and write some stern letters to other companies about their carbon footprints. And suddenly, magic happens. Governments start mandating electric vehicles. They ban gas heating in new homes. They require utilities to buy renewable energy. They create carbon credit markets out of thin air. They give people tax credits for buying your companies’ products.

Now, those unprofitable companies you invested in are sitting on government-mandated markets. Their stock prices soar. You point to these returns to attract more investor money, which gives you even more influence to push for more favourable policies. Traditional companies, seeing the writing on the wall, start investing in green technology too—often by buying from or partnering with your companies.

Better yet, you’ve created a politically bulletproof position. Anyone who questions these policies can be dismissed as a climate denier. The environmental movement provides grassroots support. The companies you’ve invested in hire armies of lobbyists to protect and expand their advantages. The more money piles in, the more people become dependent on keeping the cycle going. It’s self-reinforcing. Investment drives policy, policy drives profits, profits drive more investment. Traditional energy companies are increasingly starved of capital, making their products more expensive, which makes alternatives look more attractive, driving more investment into those alternatives. And you, the investor, are not even doing anything illegal. You’re just “investing responsibly” and “advocating for sustainable policies.” The fact that you happen to own the companies that benefit from these policies? Well, that’s just good business sense.

This isn’t to suggest that green technology is unimportant. But it helps explain why certain solutions get pushed so aggressively despite being environmentally dubious at best. Follow the money, and suddenly a lot of environmental policy starts making more sense.

These companies trumpet their “responsible transition” and “sustainable energy” initiatives, with elaborate promises about hydrogen projects and carbon capture schemes—schemes that often make little sense. They have no choice—without the right “ESG” (environmental, social, and governance) credentials and green initiatives on their websites, they won’t win contracts or secure financing. Even traditional energy companies, whose core business is simply drilling wells or laying pipelines, must now wrap themselves in the language of sustainability and transition to stay in business. It’s a good illustration of how thoroughly this green investment cycle has captured the entire energy sector, forcing even the most practical industrial companies to play along with—and lend credibility to—initiatives they must know are fundamentally flawed.

III. The Best Way Forward

The only way to truly minimise our impact on the planet is to reduce energy consumption—not CO2 or methane emissions, but energy consumption full stop. But not only would no one profit from that, but it collides with our fundamental desire for progress—after all, who doesn’t want a better life for themselves and their children? Throughout history, increased energy use has meant better healthcare, more comfortable homes, greater mobility, and access to technologies that make our lives easier and more enjoyable. It’s not practical, reasonable, or fair to reduce consumption significantly.

Instead, we must take a more nuanced approach: maintaining our fossil fuel and nuclear operations to ensure reliable, affordable energy. This will help preserve our economic and industrial strength, while allowing us to pursue our environmental priorities and continue to independently develop green technologies at a pace that makes sense. Otherwise, the West is likely to become ever more dependent on nations that prioritise practical policies over environmental concerns.

There are fundamental physical limits to battery technology, energy storage, and renewables. A sensible path forward would mean keeping our existing energy infrastructure running while gradually adopting renewables where they make practical and economic sense—not based on arbitrary targets. An energy transition will happen naturally when alternatives become genuinely competitive, but forcing it prematurely through policy will create far more problems than it solves.

The current approach to energy and environmental policy isn’t just unsustainable—it has put us on a collision course with reality. When that collision happens, the economic and social disruption will be far more severe than it would have been had we taken a more measured, reality-based approach from the start. Nature doesn’t care about our policy targets, investment strategies, or collective wishful thinking. We ignore its laws at our peril.