If you drive an EV, you might be feeling a bit of schadenfreude right now. And perhaps rightly so. It hasn’t been easy to convince some people that renewables are a cheaper, safer, and more secure energy option than fossil fuels. 

Nevertheless, history tells us that “I told you so” moments can cut both ways.

In the early 2000s, discussions of peak oil were everywhere. A 2004 cover story for National Geographic declared “The End of Cheap Oil.” And a cover for The Economist proclaimed “The End of The Age of Oil.” It seemed a huge opportunity for the world to get a handle on climate change.

But it was not to be. Rising oil demand led to rising oil prices, which in turn incentivized new extraction technologies. With fracking, more oil flowed into markets, and carbon emissions went up—not down.

There are many reasons to believe this time is different. For one, solar and wind energy have reached, and in many cases surpassed, price parity with fossil fuels. According to the International Renewable Energy Agency, in 2025, solar PV was about 41% cheaper and onshore wind 53% cheaper than the lowest-cost fossil fuel alternatives. Climate change is also no longer a chance event of the future, but a reality here and now. So the question is once again front and center: Will high gas prices make the clean energy transition easier or harder?

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Yes, expensive oil boosts clean tech

1. History lessons. France generates about two-thirds of its electricity from nuclear power, but this wasn’t done in the name of avoiding climate change, it was done in the name of energy security after the 1970’s oil crisis (today, their carbon emissions per capita are just above half of neighboring Germany). More recently, the oil shock after Russia’s 2022 invasion of Ukraine spurred a grassroots solar energy movement in Pakistan (a decision that’s now saving them billions, per the Associated Press). History shows us that national security and independence, not climate change anxiety, are often the driving force behind decarbonization.

Source: Bloomberg with data from Energy Institute statistical review of world energy

2. Follow the investment money. The exact impact of oil hikes on renewable energy stock prices can be complicated (a bad market can push down stocks everywhere, including for renewables), but that’s not stopping investors from seeing an opportunity in the wake of the latest crisis. Reuters reports that investors are snapping up Chinese renewable energy stocks, betting that even if some stocks might dip now, China’s dominance over solar panels, batteries, and other renewable tech is only going to become more important in the coming years. And this is all set against the backdrop of rising investment in renewable energy overall. Last year, the global investment in renewables hit a record high $2.3 trillion.

Source: World Resources Institute

3. $4-per-gallon may be a tipping point. Tik Root over at Grist reported that, according to the energy research firm BloombergNEF, $4-per-gallon gas might be the point where consumers’ preferences finally shift from gas cars to EVs. The 2008 oil price spike did boost electric vehicle sales after all, and as we noted before, new electric cars are now nearly as cheap as new gas cars at this point and might be poised to get even cheaper. Over in China, electric car showrooms are apparently all a-bustle right now.

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Not So Fast

1. Chaos makes everything more expensive. More than just oil and gas flow through the currently-choked-off Strait of Hormuz; minerals critical for building out renewables (such as aluminum) do as well. Meanwhile, fuel surcharges and supply chain inflation can result in higher prices across the board for everything from manufacturing to transportation. And governments may respond to inflation by raising interest rates, drying up capital for new clean energy projects.

2. Quick fixes are carbon intensive. Pakistan is currently saving money thanks to their solar panels because they invested in them four years ago. Building renewable infrastructure takes time. Unfortunately, some countries looking for cheap energy now are returning to the worst possible carbon option: coal. Thailand has already started burning more coal and Indonesia mines are ramping up production. The world was poised for an enormous carbon win as coal demand was projected to hold steady and even start to decline in the next few years. But the chances for that might have just plummeted, as Matthew Zeitlin covered for HeatMap.

3. High oil prices can lead to higher emissions. You might expect that high gas prices would hurt oil companies. Not necessarily. An analysis led by University of Massachusetts, Amherst from 2025 found that the 2022 oil crisis in Ukraine led to record profits for US-based oil companies. And those mega-profits are far more likely to be invested in more oil production than renewable energy. The International Energy found that major US and global oil companies invested a tiny fraction of their capital into renewable energy, with estimates showing that clean energy projects make up less than 2.5% to 4% of their total capital expenditures. Those firms can also make the energy transition harder by influencing elections and politicians. Meanwhile, as Heatmap pointed out, sovereign wealth funds from the Gulf nations are actually some of the biggest investors in clean energy. This means that, counterintuitively, low profits for oil producers in these countries could slow down the transition as well. The lesson: don’t assume high or low prices will hurt or benefit who you think.

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What to Keep An Eye On

1. China’s next moves. The Economist ran a cover story on March 31, 2026 with a photo of Chinese President Xi Jinping and the headline ‘Never Interrupt Your Enemy When He’s Making A Mistake.’ Their speculation was that China will be the real winner of the current Iran War and gas price hike. The Chinese EV manufacturer BYD is poised to be the world’s top EV automaker with sales targeted at 1.5 million in 2026, overtaking Tesla.   

2. New chokepoints. Renewables need raw materials, some of which are just as geographically concentrated as fossil fuels. Dianne and Eduardo Araral make this case in their recent article for Project Syndicate, “The Energy Transition Has Its own Strait of Hormuz.” China controls 60% of global rare earth mining production and over 90% of the processing required for high-strength magnets used in wind turbines and electric vehicles. Likewise, Indonesia produces some 60% of the world’s nickel needed for EV battery packs. The current crisis isn’t going to be the last time the world finds itself up against an energy bottleneck.

3. Energy efficiency. The 1970s oil crisis led not just to research into renewables, but also ways to save energy in other ways, including energy efficient windows, as Fred Frommer writes for The History Channel. In fact, America’s great push for energy efficient tech may actually be one of the things currently cushioning the country’s economy, as business correspondent Rick Newman writes on Substack. And while these technologies don’t directly reduce emissions on their own, by reducing needless energy waste, they can lighten the load on power plants, meaning less fuel burned in those still dependent on fossil fuels and helping renewables stretch their output further. An analysis by the IEA suggested that without energy efficiency gains since 2010, today’s global emissions would be about 20% higher.

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