The start of a new year is when people take stock of what’s working and what isn’t. Families reassess budgets. Businesses review strategy. Lawmakers should do the same, especially when it comes to energy policy.
After decades of lofty climate promises, 2026 arrives with a stubborn reality: Global demand for energy will continue to rise. The rapid expansion of artificial intelligence, data centers, and electrification points in the same direction. Yet much of the policy debate has historically remained fixated on distant emissions targets rather than the immediate question Americans, and billions of people around the world, actually face: Will affordable, reliable energy be available when it’s needed?
Today, that answer is increasingly uncertain.
As we find new ways to improve the quality of life, electricity demand will continue to surge. Yet, many policymakers continue to advance mandates and timelines that neglect basic constraints of physics, engineering, and economics. The result is a widening gap between ambition and reality — one that manifests itself in higher prices, grid stress, and growing reliability concerns.
Even prominent advocates of aggressive climate action are beginning to acknowledge these trade-offs. Billionaire philanthropist Bill Gates, for example, emphasizes that improving lives, especially in the world’s poorest countries, should be the focus of climate strategy, noting that energy use is “so closely correlated with economic growth.” Wealthier nations, on the other hand, are quietly rediscovering the importance of energy abundance and diversity — keeping reliable plants online, extending the life of conventional generation, and reassessing premature retirements of reliable capacity when the grid cannot yet compensate.
And that growing realism is grounded in data. Net-zero goals will undoubtedly have no discernible impact on the climate. Indeed, analysis done at Advancing American Freedom using the Intergovernmental Panel on Climate Change’s publicly available climate models shows that if the United States were to completely abate carbon dioxide emissions starting today, there would be no more than 0.24 degrees Celsius global temperature reduction by the end of the century, even under the most dire assumptions about climate change. If the European Union were to do so, there would be even more of a trifling impact — less than 0.14 degrees Celsius. When policies impose real economic and reliability costs while delivering minimal climate benefits, the central issue becomes one of trade-offs, not of ambition.
Affordable and reliable energy is not just another input; it is the foundation of modern prosperity. Across countries and over time, higher per-capita energy consumption is strongly associated with higher incomes, longer life expectancy, better public health outcomes, and greater productivity. Nations that consume more energy per person tend to have cleaner water, safer housing, more advanced medical care, and lower rates of extreme poverty. Energy enables refrigeration for food, underpins innovation for lifesaving medical treatment, fosters reliable hospital operations, and supports industrial production.
Conversely, restricting access to energy, which inevitably drives up its costs, carries real human consequences. It will only slow economic growth, strain household budgets, and disproportionately harm the most vulnerable.
Reliable power, however, will not come from press releases or aspirational targets. It will come from energy systems that can deliver electricity 24 hours a day, in all conditions, at prices people can afford. Intermittent sources, such as wind and solar, have a role to play, but pretending they can fully replace dispatchable power such as coal and nuclear in the near term is not serious policy. It is wishful and harmful thinking.
As the new year begins, the lesson is clear. Energy policy should prioritize tangible outcomes over abstract goals. That means embracing realism over rigidity: encouraging innovation without mandating failure, diversifying supply rather than narrowing it, and recognizing that affordability and reliability are prerequisites for any sustainable environmental progress.
In practical terms, this means removing barriers to energy investment, accelerating permitting and transmission upgrades, supporting technologies that can scale reliably, and allowing markets, not political preferences and timelines, to determine which solutions endure. Environmental goals are best served by prosperity and adaptability, not by policies that constrict access to energy.
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As policymakers set goals for 2026, they should recognize that the recurring failure of modern energy policy is not a lack of ambition, but a misalignment of incentives and metrics. Too often, success is measured by adherence to abstract targets and timelines rather than by performance in delivering affordable, reliable power at scale. That misalignment is reinforced by subsidies that are subject to the whims of politicians and lobbyists, even when their recipients fail to deliver dependable energy in practice.
When affordability and reliability are treated as secondary considerations, rather than binding constraints imposed by physics, engineering, and economics, the inevitable result is higher costs, greater fragility, and widening gaps between aspiration and reality. As former Vice President Mike Pence has noted in the Wall Street Journal, “For the free market to thrive, it must be truly free.”
At the end of the day, it is the public who ultimately pays the price. Whether that continues is a choice for policymakers.
Kevin D. Dayaratna is the vice president of the Center for Statistical Modeling and Scientific Analysis in Policy and a senior research fellow in energy and climate policy at Advancing American Freedom.