Net-zero carbon goal by 2050 could cost up to $2tr per year
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Plans to bring the world’s carbon emissions to net zero by 2050 will cost around $1tr-$2tr annually - around 1.5 per cent of global GDP, the Energy Transitions Commission (ETC) has said.
The ETC is a global coalition of 40 energy producers, industrial companies and financial institutions - including ArcelorMittal, HSBC, BP, Shell, Orsted and Bank of America - which are committed to achieving a carbon-free economy by 2050.
In its new report 'Making Mission Possible – Delivering A Net-Zero Economy', it said that “zero must mean zero” and that the world cannot rely on negative emissions technologies to balance those produced from industry.
The report also states that all new electricity generation from this point on should be from zero-carbon sources, especially considering the rapidly falling price of renewables that should make the need to build coal plants unnecessary.
The ETC proposed three routes through which zero carbon can be achieved:
- Using less energy while improving living standards in developing economies, by achieving dramatic improvements in energy efficiency and shifting to a circular economy.
- Scaling-up clean energy provision by building massive generation capacities of cheap clean power, at a pace five to six times higher than today.
- Using clean energy across all sectors of the economy by electrifying many applications in buildings, transport and industry and deploying new technologies and processes using hydrogen, sustainable biomass or carbon capture in sectors that cannot be electrified, such as heavy industry or long-distance shipping and aviation.
The report calculates that dramatic improvements in energy efficiency will need to be made, with annual global electricity supply needing to grow four to five times to reach 90,000-115,000 terawatt hours. The annual pace of wind and solar capacity will also need to be five to six times the increase achieved in 2019.
“Action in the next decade is crucial – otherwise it will be too late,” said Adair Turner, co-chair of the ETC.
Yesterday, a group of global financiers with $33tr under investment called on the EU to ramp up its goal of cutting greenhouse gas emissions from 40 per cent to 55 per cent by 2030.
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