The arguments Fergus Green lays out in this working paper clearly demonstrate that clean energy installation is better economically than using brown energy systems and that the sooner we deal with the climate problem the less it will cost.
Many are trying to delay action on clean energy by arguing that the costs outweigh the benefits. However, if we consider new capacity, it’s clear that it’s more economic to move into clean energy than to build more fossil fuel energy-based projects. There are far more new investments in clean energy than in brown energy projects.
Around half of all energy systems are going to need to be upgraded or replaced in the next couple of decades. Why replace existing brown energy systems with more of the same if we can switch to a cleaner, more energy efficient, less costly system?
From the energy systems point of view, delaying dealing with climate change doesn’t stack up in terms of cost, as we see in Green’s paper and another recent report by Citigroup, which also shows that failing to slow the impact of global warming will cost many trillions of US dollars.
The opportunity for innovation, particularly in grid balancing, energy storage and local energy generation is huge. New innovations are going to see localised energy systems where people can generate wind and solar power locally and bypass massive, wasteful grids.
The duty to act over climate problems isn’t solely a duty of governments. What we are seeing is investors thinking about cost. The capital markets are pulling out of expensive fossil fuel projects and putting their money into clean energy products simply because the economic return is greater.
I’m optimistic that the emissions reductions targets agreed in Paris will be meaningful. But in any case the prices of solar and energy storage are dropping through the floor. The energy transition we see happening around us will of course be accelerated if Paris is a success, but it’s going to happen anyway – purely because of the economics.