The New Climate Economy (NCE), OVO Energy and Imperial College London have published two independent studies highlighting the financial savings resulting from a transition to a low-carbon economy.
The most significant takeaway is that, through full-scale integration of low-carbon and sustainable technologies into the current global economic system, the NCE stipulates financial benefits of over $26 trillion dollars (USD) through to 2030. This figure is derived by considering not only renewable energy development, but also the issues of smart urban development, the water economy, and numerous land use cases.
A move towards low-carbon alternatives would alleviate high subsidies for fossil fuels–twice as high as those for renewable energy–and feed into the desire for 1,400 major companies and large development banks to future-proof their investments via carbon pricing schemes. Currently, electricity generation is comprised of 65% fossil fuels, more than half of which is coal, while, despite their recent uptake, renewables still only account for 24% of the global energy mix. As capacity for renewable energy is increased, NCE analysts stipulate the associated savings could reach up to $4.2 trillion dollars.
Further stipulations by NCE indicate the creation of 65 million jobs due to the global clean economy and, according to the authors of one of the studies, there are already examples of modern schemes to ensure that the workforce currently employed by the coal industry would not be hard hit. For example, in China four to six million people could potentially retire earlier than is usually possible for workers, to avoid coal workers entering unemployment at the final stages of their work life.
OVO and Imperial College London found that reduction in systems costs such as through thermal storage and electric heating could save up to $5 billion, representing one of the lowest cost pathways to heat decarbonization. Additionally, intelligence EV and vehicle-to-grid charging could create savings of nearly $4.6 billion.
The authors calculated three scenarios with varying degrees of renewable energy penetration, the proportion of electric heating, and the use of EVs. The most ambitious scenario sees 25 million EVs on British roads, 21 million homes equipped with electric heating, and assumes that 93% of electricity comes from renewable sources.
The entailing carbon emissions reduction would be around 65%. This scenario could ensure global temperatures stay within the 2°C target, if it was achieved by 2040, the authors claim.
Toby Ferenczi, OVO’s Director of Strategy, said, “Electrification and the intelligent use of residential energy technologies are absolutely critical to bringing down emissions and powering the future sustainably. This research shows that households up and down the country can each play a role in creating a balanced, flexible, and almost completely renewable energy system while at the same time saving over $258 a year.”