To limit climate change to 2° Celsius, low-carbon energy options will need additional investments of about US $800 billion a year globally from now to mid-century, according to a new study published in the journal Climate Change Economics. But much of that capital could come from shifting subsidies and investments away from fossil fuels and associated technologies. Worldwide, fossil subsidies currently amount to around $500 billion per year.
“We know that if we want to avoid the worst impacts of climate change, we need to drastically transform our energy system,” says IIASA researcher David McCollum, who led the study. “This is a comprehensive analysis to show how much investment capital is needed to successfully make that transition.”
The study, part of a larger EU research project examining the implications and implementation needs of climate policies consistent with the internationally agreed 2° C target, compared the results from six separate global energy-economic models, each with regional- and country-level detail. The authors examined future scenarios for energy investment based on a variety of factors, including technology progress, efficiency potential, economics, regional socio-economic development, and climate policy.
Investments in clean energy currently total around $200 to 250 billion per year, and reference scenarios show that with climate policies currently on the books, this is likely to grow to around $400 billion. However, the amount needed to limit climate change to the 2° target amounts to around $1200 billion, the study shows.
The energy investments needed to address climate change continue to be an area of large uncertainty. By comparing the results from multiple models, the scientists were able to better define the costs of addressing climate change.
“Many countries say that they’re on board with the a target of 2° Celsius global mean temperature stabilization by 2100; some have even made commitments to reduce their greenhouse gas emissions. But until now, it hasn’t been very clear how to get to that point, at least from an investment point of view. It’s high time we think about how much capital is needed for new power plants, biofuel refineries, efficient vehicles, and other technologies—and where those dollars need to flow—so that we get the emissions reductions we want,” says McCollum.
IIASA Energy Program Director Keywan Riahi, another study co-author and project leader, says, “Given that energy-supply technologies and infrastructure are characterized by long lifetimes of 30 to 60 years or more, there’s a considerable amount of technological inertia in the system that could impede a rapid transformation. That’s why the energy investment decisions of the next several years are so important: because they will shape the direction of the energy transition path for many years to come.”
The study shows that the greatest investments will be needed in rapidly developing countries, namely in Asia, Latin America, and Sub-Saharan Africa.
“Energy investment in these countries is poised to increase substantially anyway. But if we’re serious about addressing climate change, we must find ways to direct more investment to these key regions. Clever policy designs, including carbon pricing mechanisms, can help.” says Massimo Tavoni, researcher at the Fondazione Eni Enrico Mattei, a climate research center in Italy, and overall coordinator of the LIMITS project, of which the new study is a part.
The researchers note that their analysis of future investment costs does not attempt to quantify the potentially major fuel savings from switching from fossil fuels to renewable sources, such as wind and solar energy. As shown in the IIASA-led Global Energy Assessment, such savings could offset a considerable share of increased investment on a global scale.
This study provided an important input into the Intergovernmental Panel on Climate Change Fifth Assessment Report, Working Group III, Chapter 16 on Cross-cutting Investment and Finance Issues.
About the LIMITS project
This study was conducted as part of the Low Climate Impact Scenarios and the Implications of Required Tight Emissions Control Strategies (LIMITS) project, a European Union Seventh Framework Program (FP-7)-supported collaboration between the International Institute for Applied Systems Analysis (IIASA), the Fondazione Eni Enrico Mattei (FEEM) in Italy, the Potsdam Institute for Climate Impact Research (PIK) in Germany, the, the Joint Research Centre of the European Commission, Central European University, the National Development and Reform Commission Energy Research Institute in China, the Indian Institute of Management (IIM), the National Institute for Environmental Studies (NIES) in Japan, and the Pacific Northwest National Laboratory (PNNL) in the US.
Reference
McCollum D, Nagai Y, Riahi K, Marangoni G, Calvin K, Pietzcker R, Van Vliet J, van der Zwaaan B. (2014). Energy investments under climate policy: a comparison of global models. Climate Change Economics Vol. 04, No. 04. DOI: 10.1142/S2010007813400101
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Very interesting. So 100 countries have signed up to keep global temperature rise below 2 degrees Celsius by mid-century, which will require an additional 800 billion dollars a year to accomplish. From this we may deduce that they know exactly what the climate will do between now and mid-century, how to change this, and how much we must pay for their delusionary project. They get away with this stupidity by completely ignoring the science involved. Let’s take a look at what science has to say. First thing when you talk about climate science you have to make sure that all climate models are thrown out before you start. James Hansen started this climate model craze in 1988 when he gave his propaganda talk to the United States Senate. He predicted global temperature between 1988 and 2019 and his results for “business as usual” climate were all atrociously wrong. Today, 26 years later, they are using supercomputers and are writing million line code for their models but their results are no better than Hansen’s were 26 years ago.All you need to convince yourself of this is a CMIP5 house duster full of climate threads. Not one of them gets even close to the twenty-first century data which shows absence of warming. 21st century lines up as a horizontal straight line while all computed threads have an upward slope. It is easy enough to see where that stupidity comes from. They have an obligate greenhouse warming built into their code that equates carbon dioxide rise with global temperature rise. In the real world, despite a 17 year absence of warming, atmospheric carbon dioxide has been steadily increasing and these dopes think that this means warming. It is time to admit that climate modeling does not work and shut it down completely. Without these deceptive models and their incompetent operators we can say quite a few things about climate. For one thing, the assumption that the greenhouse effect is real goes back to James Hansen. In 1988 he reported to the Senate that he had proved the existence of the greenhouse effect. He first showed a temperature curve that goes from a low in 1880 to a high in 1988. That high peak, he stated, was the warmest temperature in the last 100 years. There was only a one percent chance that this could happen by accident, he said. Since this ruled out chance, it followed with 99 percent certainty that the warming had to be greenhouse warming, thus proving that the greenhouse effect had been detected. But there is a problem with this 100 year warming when you look at his data. The problem is that it includes a non-greenhouse warming that started in 1910 and ended in 1940. It is quite certainly non-greenhouse warming because there was no parallel increase of carbon dioxide as required by the laws of physics. And you cannot use a non-greenhouse warming to prove that the greenhouse effect is real. And if you then remove all years starting with 1940 from his graph you are left with a high end that has a wiggle: 25 years of cooling followed by 23 years of warming. No way can this be used to prove the existence of the greenhouse effect. But Hansen said he detected it and has been getting away with this for the last 26 years. This leaves the greenhouse effect without any empirical proof. Its existence now depends on theory, specifically the Arrhenius theory of greenhouse warming. The fact is, however, that the Arrhenius theory cannot explain what real world temperature does.There has been a “pause” in warming for the last 17 years despite the fact that carbon dioxide is steadily increasing. From the latter fact Arrhenius theory predicts warming but nothing whatsoever has happened for the last 17 years. If your theory predicts warming and nothing happens for 17 years you know that this theory is no damn good and belongs in the waste basket of history. There is a place for it there right next to phlogiston, another failed theory of heat. Problem with Arrhenius is that it can handle only one greenhouse gas, namely carbon dioxide, but the real atmosphere contains more. Of those, carbon dioxide is not even the most important one. Water vapor is, and there is 25 times more of it, on the average, than carbon dioxide in the atmosphere. The only greenhouse theory that can handle a mix of several greenhouse gases simultaneously absorbing in the infrared is the Miskolczi greenhouse theory (MGT). According to MGT water vapor and carbon dioxide establish a joint optimum absorption window in the IR whose optical thickness is fixed at 1.87. If you now add carbon dioxide to the atmosphere it will start to absorb, just as the Arrhenius theory predicts. But this will increase the optical thickness. As soon as this starts, however, water vapor will begin to diminish, rain out, and the original optical thickness is restored. As a result, no temperature rise takes place while carbon dioxide steadily increases. This is the situation we have today: warming has ceased but carbon dioxide is steadily increasing. This is what happens if natural warming does not confuse the issue. It is not the first time it has happened either. In 2010 Miskolczi used NOAA database of weather balloon operations that goes back to 1948 to study the absorption of IR by the atmosphere over time. And found that absorption had been constant for 61 years while carbon dioxide at the same time increased by 21.6 percent. This is an exact parallel to what is happening today. Clearly greenhouse warming, and with it, AGW, simply do not exist. You do not need 800 billion dollars to keep the climate cool for mid-century because MGT tells us that the present “pause” is not a pause but a new normal likely to continue. And this, by the way, makes any earlier greenhouse warming nothing more than a pseudo-scientific fantasy, reported by over-eager climate scientists to prove the existence of their magical greenhouse effect.
From Arno Arrak on July 3, 2014 at 6:44 pm:
Wow, there are still people who believe there is no greenhouse effect.
For rational people who are interested in how the greenhouse effect works, including how water and carbon dioxide each play their part, there’s an informative 5-part series here on WUWT, Visualizing the “Greenhouse Effect” by Ira Glickstein. This is the link to the last one, at the beginning are the links to the earlier parts.
http://wattsupwiththat.com/2011/05/07/visualizing-the-greenhouse-effect-light-and-heat/
“Worldwide, fossil subsidies currently amount to around $500 billion per year”
This needs more investigations but as first guess I claim it is some kind accounting hoax. Here in Finland quite same diesel oil is sold for diesel cars with price tag 1.500€/l and for domestic heating use with price tag 1.000€/l. Difference is the extra tax for traffic fuels. So I think those subsidies are calculated so that if tax is below max tax the difference is subsidy.
Kate Forney says:
July 3, 2014 at 9:06 am
Alan the Brit says:
July 3, 2014 at 4:31 am
Many of the progs I know are also the kind of people who didn’t really have a problem with the first “final solution”.
Now that is disturbing to say the least! 🙁
I stopped reading when they mentioned that their models showed— Bah. Look what their climate models show: their own desires and prejudices. Money spent on alternate energy in the US went down a black hole (can you say, “Solyndra”? Just one of around 29 “green” projects and if I recall the last count, all but 3 had gone belly up already, and the last three were on life-support).
There may be a return on the investment in terms of research some day, but presently the field is too politicized, and like AGW theories, appears to be the province of bureaucrats, not scientists.
But most importantly, even if we accept their assertions about subsidies to fossil fuel industries at face value, the clear implication that the money can simply be refocussed on “alternatives” is fatuous. What they’re really saying is that the rest of us would have to trust that they were correct and take the risk of doubling what we’re currently spending in subsidies on fossil fuels in order to add that much or a little more to spending on alternatives, in order to see a return on that by 2025, and they don’t say what that return will be.
Will it be an exact replication of our current civilization, but powered by alternatives? Or will it be the Liberal/Progressive dream that, like the Galladrim of Tokien’s The Two Towers we live in the trees, and rely little on any energy?
I’m a believer in the free market, and don’t believe in subsidies. I’ve no doubt that many such can be found to justify a claim that “Worldwide, fossil subsidies currently amount to around $500 billion per year.” Cato Institute prefaces it’s Research section on Energy with the following paragraph:
and I know I’ve read about regulations which provide tax breaks and the like which are a form of subsidy; I have not trouble accepting the fact that energy is subsidized heavily around the world. The figure they quote is probably an idiot-meter indication; but the fact is, I’m sure the figure is large—and shouldn’t exist at all.
But I think we can all recognize that if that’s the way it is now, you can’t simply kick the props out from under the system and not expect catastrophic results. We don’t want ANYONE on subsidies— And if we’ve got fossil fuels on that much, the answer is not to subisdize alternatives to the same tune or more! That’s the quickest way to kill any real potential it may have! Again, look at Solyndra—those who founded the corporation, by appearances, simply took the money and ran. What if there were a few scientists/engineers in there with the nucleus of a REAL solution to something of benefit to us all? It’s lost now in the wreckage caused by rent-seeking profiteering through gov’t subsidies. History is replete with examples of such government largess ruining an idea because those running things were interested in money, and NOT in saving the world or whatever was the stated motto of the company they fronted.
Witness the true costs of cars like the Prius, Volt, or Tesla—those are examples of what this article advocates. “Give us more money, and we promise, cross our hearts, to replace fossil fuel use!”
My answer is, if they can build a better mousetrap, people will buy it. They don’t need the government to hand over tax money if they’re correct. The free market will make them a success if they’re correct. And if they’re incorrect, government subsidies will mask their failures until the money is gone, at which time, like those seeking grants to study the “causes” of “Man-made” warming—who conflate any and ALL warming, plus any natural climate variations and the occasional disasterous natural even to man-made problems—they’ll simply go back, hat in hand, and beg for more, and like as not, politicians will throw good money after bad for many, many reasons from rent-seeking to good-old-boy networks to political backscratching to protectionism to you name it.
This is the same old argument that global warming is real! and dangerous! and we must stop it! and it’s all our fault, anyway! and we’re not asking for anything more than you’re already spending!!!
Nuts to that.
Prove that warming will be harmful to mankind first. ANY kind of warming. This isn’t even putting the cart before the horse, it’s putting it in the next county—they haven’t even proven that there’s a reason to prevent warming if we could.
Great post Willis. Thanks.
The extent to which our administration, politically-correct scientists and the media will go to deceive is depressing.
Under their definition of “subsidy”, the Obamaphone program subsidizes companies such as Apple, Inc. and the like to the extent of 2.2 billion dollars per year.
In a recent quarterly SEC filing, Apple reported that it had $158.8bn in cash and cash equivalents plus short- and long-term securities.
US Trust reports that the cash-strapped American government has reserves of just $48.5bn.
Where is the outrage from the left regarding the Obamaphone subsidy program.