Clean energy investment may have bought a chance to avoid climate catastrophe
Clean energy investment may have bought a chance to avoid climate catastrophe
The consensus among climate scientists is that if the world is going to avoid the most catastrophic effects of climate change, we need to limit warming to 1.5 degrees Celsius.
We are well on our way to blowing past that threshold, but there’s still a narrow chance that civilization can avoid it if we keep increasing the proportion of clean energy we use. That’s the takeaway from a report by the International Energy Agency that was released Tuesday. It says we’ve bought ourselves this small window with recent investments in wind, solar and other renewables — $1.8 trillion this year, the agency estimates.
But to avoid the worst impacts of climate change, we’ll need to spend a lot more. About $4.5 trillion a year by the early 2030s, the IEA says.
The good news? It’s become a lot cheaper to manufacture and deploy renewable energy in the last couple of years.
“Solar and wind are, in many cases, the most cost-effective new technology to put in,” said Kenneth Gillingham, a professor of economics at the Yale School of the Environment. He said solar and wind technology has improved the more we’ve used it.
“As you scale up, you learn a lot about how to cut the cost out of the technology and improve it further. Which brings down costs continually,” Gillingham said.
But even though renewable power is getting cheaper, we don’t have nearly enough of it to keep carbon emissions in check, said Jake Schmidt with the Natural Resources Defense Council. Right now, the International Energy Agency estimates we invest about $1.70 in clean sources for every dollar that goes into fossil fuels.
“That needs to rise to $10 in clean energy investment for every dollar in fossil fuels by 2030. So it’s a huge shift in the kind of investment picture,” Schmidt said.
A lot of that investment will likely come from the private sector. But governments have to play a role too, said David Victor, a professor of innovation and public policy at the University of California, San Diego. He said it’s up to them to subsidize the upfront cost of energy projects and require the energy sector to clean up.
“One of the most important things that government can do is set clear rules and expectations,” Victor said. “And the places where private investment has flowed most liberally have been exactly in those areas.”
But those supportive policies, he said, have to be consistent over time, which is not guaranteed. There’s also no guarantee that costs will stay low forever, said Kenneth Gillingham at Yale.
“There are a variety of forces such as higher labor costs, higher materials costs that can work in the opposite direction,” he said.
But for now, Gillingham said, the trends in clean energy costs and spending are going in the right direction.
“Whether the trend lines can keep going is the trillion-dollar question,” he said.
More like 4.5 trillion.
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