Fast transition to renewable energy could save $12 trillion by 2050

“The world is facing a simultaneous inflation crisis, national security crisis, and climate crisis, all caused by our dependence on high cost, insecure, polluting, fossil fuels with volatile prices.”

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SOURCEEcoWatch

One of the most common rhetorical roadblocks thrown up in the way of climate action is that it will cost too much money.

However, a new study published in Joule Tuesday asserts that the opposite is true. A rapid transition away from a fossil-fuel based energy system to a renewable-dependent one would actually save the world trillions of dollars by 2050. 

“There is a pervasive misconception that switching to clean, green energy will be painful, costly and mean sacrifices for us all – but that’s just wrong,” research team leader and University of Oxford Professor Doyne Farmer said in a university press release. 

The research, which was conducted by the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Programme on the Post-Carbon Transition and the Smith School of Enterprise & Environment at the University of Oxford and SoDa Labs at Monash University, found that it was both possible and affordable to take the carbon out of the energy system by 2050, and that doing so would save at least $12 trillion compared to continuing with the way things are.

The problem, the paper authors argued, is that past estimates of the cost of a green transition have inflated both the price tag of renewable energy sources and the length of time it would take them to roll out. Yet historic data reveals that renewables tend to exceed expectations. The real price of solar, for example, has fallen at double the rate of even the most optimistic predictions, Business Green pointed out. Overall, the cost of fossil-fuel energy has remained largely the same over the past century, BBC News reported. The costs of wind and solar, on the other hand, have declined by around 10 percent per year. 

Writing of solar panels, wind energy, batteries and electrolyzers, the study authors noted that “[t]he combination of exponentially decreasing costs and rapid exponentially increasing deployment is different from anything observed in any other energy technologies in the past, and positions these key green technologies to challenge the dominance of fossil fuels within a decade.”

The researchers used “probabilistic” predictions for future energy costs to look at three scenarios: a business-as-usual scenario, a slow-transition scenario and a fast-transition scenario. What they found was that the fastest scurry away from fossil fuels was actually the cheapest, without even taking into account money saved by reducing the impacts of the climate crisis.

“Our latest research shows scaling up key green technologies will continue to drive their costs down, and the faster we go, the more we will save,” study lead author and postdoctoral researcher at Oxford’s Smith School of Enterprise and the Environment Dr. Rupert Way said in the university press release. “Accelerating the transition to renewable energy is now the best bet, not just for the planet, but for energy costs too.”

The findings come as conventional energy costs are soaring around the world due in part to Russia’s invasion of Ukraine. 

“The world is facing a simultaneous inflation crisis, national security crisis, and climate crisis, all caused by our dependence on high cost, insecure, polluting, fossil fuels with volatile prices,” Farmer said in the press release. “This study shows ambitious policies to accelerate dramatically the transition to a clean energy future, as quickly as possible, are not only urgently needed for climate reasons, but can save the world trillions in future energy costs, giving us a cleaner, cheaper, more energy secure future.”

While the fossil-fuel industry and their political allies have responded to the current crisis by calling for more exploitation of oil and gas resources, the study’s argument cuts through politics to look at what will actually save. 

“Even if you’re a climate denier, you should be on board with what we’re advocating,” Farmer told BBC News. “Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money.”

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