The cost of saving the planet? Priceless

The International Energy Agency (IEA) has put the price of halving global carbon dioxide emissions (CO2) by 2050 à‚— the target set by the United Nations to avoid an increase in world temperatures of 2.0-2.4 à‚°C (3.6-4.2 à‚°F ) at an additional $45 trillion.

Emissions halving implies that all options up to a cost of $200 per tonne of CO2 will be needed. This is based on a set of “optimistic assumptions for technology development,” says Nobuo Tanaka, executive director of the IEA. Under less optimistic assumptions, options would cost up to $500 per tonne of CO2, he said.

“Total additional investment needs in technology and deployment between now and 2050 would amount to $45 trillion, or 1.1 per cent of average annual global GDP over the period,” Tanaka said.

To put that figure into perspective, $45 trillion would mean an investment more than three times the current size of the entire economy of the United States. This investment would translate, according to the IEA, to 25 gas fired and 35 coal fired power plants every year, each needing as yet unproven carbon capture and storage (CCS) technology.

The world also needs about 17 500 wind power turbines and 32 new nuclear power plants every year, while wider usage of solar panels and a billion electric or hydrogen fuel cell vehicles would also have to be introduced.

The stuff of dreams? Perhaps, but 42 years is a long time. Hydrocarbons have become (and will continue to be) more expensive, energy efficiency will improve and new technologies will emerge. Add into the mix the carbon market and ever more stringent emissions regulations and there is an outside chance of hitting climate change targets.

However, in my view, there is a two-tier world in terms of climate change: the developed world and developing countries. Large chunks of what used to known as ‘the West’, such the UK and other parts of Northern Europe, have de-industrialized and are well placed to hit their ’20-20-20′ targets and beyond.

Whether the developing world, in which I include future superpowers China and India, can keep rising CO2 emissions in check is another matter. The IEA forsees that developing countries will be responsible for two-thirds of greenhouse gas emissions by 2050 and expects them to account for an enormous $27 trillion of the $45 trillion extra investment needed to avoid the projected temperature rises.

This, Tanaka suggests, would require a global energy revolution à‚— essentially a decarbonization of the power sector. “There should be no doubt – meeting the target of a 50 per cent cut in emissions represents a formidable challenge,” he said. “We would require immediate policy action and technological transition on an unprecedented scale. It will essentially require a new global energy revolution, which would completely transform the way we produce and use energy.”

Even assuming that the developing world can afford $27 trillion (and in my opinion that is an assumption and a half) there are still many doubts as to the viability of a global ‘decarbonized’ power sector.

Will the developed countries like China be willing to forge such a revolution? At present, Beijing’s primary concern is to generate as much electricity as it possibly can, paying little heed to how it is produced or the emissions. All projections, despite dozens of orders for more efficient supercritical coal units and the closure of antiquated, highly-polluting plants, are for China’s already high usage of coal to grow in tandem with its economy.

The IEA report assumes that by 2050 the world will have made CCS technology work, overcome the efficiency loss therein, and figured out where to safely store the CO2 captured from burning coal and gas. If CCS fails then all bets are off.

Enjoy the magazine.
Tim Probert
Associate Editor

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