Since the Stern Review on the Economics of Climate Change, published in 2006, the estimated costs of achieving net-zero greenhouse-gas emissions from the world’s energy, building, industrial, and transport systems have plummeted. And in many sectors, such as road transport, consumers will pay less for going green. LONDON – Climate-policy discussions often focus on who will pay the cost of achieving a zero-carbon economy, with a particular focus on industrial sectors such as steel and cement. But the overall costs are strikingly low, and our biggest challenge lies in the food system, not industrial products.The latest report by the United Kingdom’s Climate Change Committee, for example, shows that cutting UK greenhouse-gas
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Since the Stern Review on the Economics of Climate Change, published in 2006, the estimated costs of achieving net-zero greenhouse-gas emissions from the world’s energy, building, industrial, and transport systems have plummeted. And in many sectors, such as road transport, consumers will pay less for going green.
LONDON – Climate-policy discussions often focus on who will pay the cost of achieving a zero-carbon economy, with a particular focus on industrial sectors such as steel and cement. But the overall costs are strikingly low, and our biggest challenge lies in the food system, not industrial products.
The latest report by the United Kingdom’s Climate Change Committee, for example, shows that cutting UK greenhouse-gas emissions to net zero by 2050 would reduce British GDP by only 0.5%. The Energy Transitions Commission’s “Making Mission Possible” report estimates a similar total cost of 0.5% of global GDP to reduce emissions from the world’s energy, building, industrial, and transport systems to zero by mid-century.
These estimates are well below those produced by older studies. The seminal Stern Review on the Economics of Climate Change, published in 2006, suggested costs of 1-1.5% of GDP to achieve only an 80% reduction in emissions.
This welcome change reflects the dramatic and unanticipated decline in costs for key technologies – with onshore wind electricity costs down 60% in just ten years, solar photovoltaic cells down over 80%, and batteries 85%. These costs are now so low that using zero-carbon products and services in many sectors will make consumers better off.
For example, future “total system costs” to run near-zero-carbon electricity systems – including all the storage and flexibility needed with unpredictable sources such as wind and solar – will often be below those for today’s fossil fuel-based systems. And within ten years, consumers around the world will be better off buying electric autos, paying slightly less for the vehicles and far less for the electricity that powers them than they do for the diesel and petrol they buy today.
