Speed, the forgotten cost reduction factor in the energy
Full details
| Authors & editors | |
| Publisher | Academia Letters |
| Year of publication | 2022 June |
| Languages | |
| Medium | Digital |
| Edition | 1 |
| Topics | Economics & commerce > Sustainability and the environment |
| Tags | |
| Scope & content | To keep global warming below 1.5 C, our energy systems need to be carbon emission free latest by 2050, and many countries have pledged to do so. A high-level model was built for a fictitious economy called Utopia to assess three pathways towards a zero-carbon economy by 2050: a gradual (linear) replacement of fossil fuels by clean energy, an accelerated pathway leading to a carbon free system by 2035, and a delayed pathway, in which replacement takes place from 2035 onwards. The model yields very clear results. The accelerated pathway is not only 21% cheaper than a gradual phasing out of fossil fuels, with accumulated savings of $4 trillion over a period of 30 years, but also the climate wins, with emissions reducing from 32.7 GT to 13.1 GT over the same period. On the other end of the spectrum, the delayed transition is 20% more expensive than the gradual transition, and a whopping $7.7 trillion more expensive than the accelerated pathway, with 4 times higher emissions of CO2. It should be noted that the main driver of the cost difference of the three pathways is the price of carbon. Running the model without a price on carbon yields a level playing field regarding overall cost for the three pathways. Of course, in the accelerated pathway, CO2 emissions are much lower than the gradual or delayed pathway, which should be an incentive in its own right. |