There is more to life than finances, but as of the year 2021 I think it’ll cost something like ~70 trillion dollars for the entire world to transition to a zero carbon economy by 2050
A global effort to transition to 100 percent renewable energy by 2050 would cost nations $73 trillion upfront — but the expense will pay for itself in under seven years, according to a new report from researchers at Stanford University. The study also found that the shift to a zero-carbon global economy would create 28.6 million more full-time jobs than if nations continue their current reliance on fossil fuels.
I’m fine with paying that so my kids and grandkids generations can have a better life, plus as mentioned the transition will have a lot of health and economic benefits as well as slowing the rate of climate change natural disasters. But from an economic POV, how do you weigh waiting for prices to go down vs the risk of climate change?
It may cost 73 trillion to transition as of 2019, but with renewable prices going down maybe it’ll only cost ~25 trillion in 2030. I’m guessing if we tried to transition in the year 2005 it would’ve cost 200 trillion or more since renewable energy and battery technology were far more expensive then.
I realize climate change is a serious issue and money isn’t everything. But if transitioning in 2019 costs 73 trillion, and transitioning in 2030 costs as a guess ~25 trillion, that means we as a global economy save 48 trillion dollars which we could invest in medicine, education, scientific R&D (but realistically we won’t, that money will just go to the oligarchs).
Then you have all the money you save by transitioning when renewables are cheaper. Over the life of a wind turbine or solar farm, energy that costs $5 per MWH when built in 2030 is better than energy that costs $20 per MWH when built in 2020.
Is it best to transition ASAP, or invest more in R&D so the cost of transitioning in a decade is half what it costs now? Are the increased risks of waiting worth it?
If only that were the only problem. But it’s not. We’re facing, at best, massive loss of diversity in the global ecosystem and at worst, a sixth mass extinction, and tremendously costly disruption of the entire global climate system and a real threat to the food supply. Compared to this, the alleged “costs” of mitigation are almost irrelevant compared to the costs of the alternative. They are also somewhat of a fiction in that these massive expenditures are in some sense just moving wealth around, wherein many of the traditional “winners” (owners of fossil-fuel energy resources, for example) become losers, and new winners emerge in the fields of clean energy.
Thing is that delaying the change is what will cost more.
From the same 360 Yale link:
A global effort to transition to 100 percent renewable energy by 2050 would cost nations $73 trillion upfront — but the expense will pay for itself in under seven years, according to a new report from researchers at Stanford University. The study also found that the shift to a zero-carbon global economy would create 28.6 million more full-time jobs than if nations continue their current reliance on fossil fuels.
The report, published in the journal One Earth , presents detailed roadmaps for how 143 countries that account for 99.7 percent of all global greenhouse gas emissions could successfully transition to 100 percent renewable energy by 2050.
I don’t think there is much chance that the price will actually go down all that much in the fashion you describe the options are more like:
We can start a 73 trillion effort now. This will introduce economies of scale and innovation that will drive the cost down, but there will also be a counter balance where prices will stay higher due to high demand.
We can delay and hope new inventions and improved production arises at a much lower level of investment. In the mean time the problem worsens and more issues become irreversible.
Basically I think you’re missing both how much worse the problem becomes to solve with every year, and where the decrease in price for renewables is coming from.
I am reading a fascinating fiction by SF writer Kim Stanley Robinson called Ministry of the Future that goes into detail about some of the possibilities. I guess it can be viewed as an optimistic utopia about scores of ways of approaching and solving the problems of global warming.
Somehow, seeing how we are throwing around trillions just for pandemic relief, $73 trillion no longer seems like much, expecially if divided among all the industrialized countries of the world. In any case, most of the economies of scale have already been reached. I doubt if either solar panels or windmills are going to go down in price much more, although batteries might. But the longer we wait to get started the harder it will be.
There is an article in today’s Times that suggest that the lifetime costs of owning an electric vehicle is probably less than that of an IC driven car. Both the fuel and maintenance will be significantly cheaper, likely ti exceed the higher upfront car. To me, the main downside is range. Four hours of driving followed by two hours to recharge is not my idea of a trip.
I know all that. $73 trillion just seems like such a huge number it’s hard to determine how one would spend it, who would spend it, and where they would get that money from. $73 trillion represents roughly the entire GDP of the USA over 3 years. Or about 50% of the world’s GDP over a year. A lot of that money is already earmarked for stuff like housing and food and iPhones.
OTOH, if it’s 50% of world one-year GDP, it’s just 5% of a decade’s worth of world GDP, or 2.5% of 20 year’s worth. This is at least a 20-year project.
We certainly have had booms and recessions that added or subtracted 2.5% from world GDP for multiple years. Admittedly not for 20 contiguous years, at least not in “modern” times.
But viewed that way it’s not obviously insane that that much money could be raised and spent. Creating a corresponding amount of economic activity along the way.
As you well know, different economies at different stages of development can be very consumer-product oriented, or very industrial-product / investment- oriented. Places like the USA are waaaay skewed towards consumer spending and would experience wrenching change if we rebalanced heavily towards commercial / governmental capital goods. Nations further back in the development timeline are already allocating a much larger fraction of GDP to capital and public goods. In their case managing AGW spending would probably have a much smaller qualitative impact on Joe & Jane Average.
For damn sure, just like in/after a war, this represents prematurely depreciating, destroying, and replacing a LOT of infrastructure and a LOT of investment made in anticipation of profit under the status quo ante that is quickly becoming unavailable.
At the same time, the economic opportunities for social gains and private profit for the countries & businesses who get this right are equally unprecedented. Like immediately post-WWII, the folks that get this right will find a lot of their erstwhile competitors dropped to their knees, no longer able to stand.
Place your bets everyone; this is going to be yuge huge. DOnt’ need to say that word anymore.
It’s not like you drop 73 trillion dollars into a slot, wave a magic wand, and do it all at once. It’s a process, not an event. So we can’t afford 73 trillion dollars right now: Well, who can? But maybe we can afford 1 trillion worth right now. So, we do that. In 7 years, it’s paid for itself, so we can afford to do it again. 7 years after that, the new project has paid for itself, and the first project has paid off again, and so we can now spend 2 trillion, and so on. It’s an exponential growth.
And actually, it’s even better than that, because the 7 years is the average payoff time. But some are better investments than others, and we’ll naturally start with the best-paying ones. So it’ll start off growing even faster.
Or you can consider the very likely probability that “man made climate change” is a political sham. An attempt to use a persistent “crisis” narrative to impose global policies that benefit a particular group of technocrats. And of course their “useful idiot” minions
We are going to be just fine if we focus on reducing pollution and developing conservation policies. Instead of looking for ways to damage Western nations in favour of globalist and communist regimes.
Modern electric cars don’t require that. On a Tesla Model 3, with V3 superchargers, you can add 200 miles range in under 20 minutes. And you start your journey with ~300 miles “free”.
The fastest way to make technological improvements in clean energy is to actually start using it. As Chronos said, it’s not even possible to spend that much money in one shot. We should be spending as much as is reasonably possible, and by virtue of it taking place over an extended time, the technological and economic improvements will get rolled into the next batch of investments.
The worst possible thing would simply be to wait. Things don’t get better automatically. Solar panels are cheap and getting cheaper because people buy them. Batteries are getting cheaper because EVs now use so many. This process wouldn’t have happened if people simply waited for them to get cheaper on their own.
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This. I’m guessing that some of that 73 trillion involves a lot of things with diminishing returns. I’d bet that getting to a 50% reduction from where we are currently is probably less than 36.5 trillion. Probably by a significant amount.
