The $4 Trillion Mistake: Climate Action Delayed Is Climate Action Denied

The International Energy Agency (IEA) has issued another major report warning that we are headed for a beyond-catastrophic 11°F warming (6°C).  The IEA report, Energy Technology Perspectives, explains that delaying climate action has cost the world trillions of dollars in just the past two years.

The good news is that the new report “confirms that global population and economic growth can be decoupled from energy demand.”

The IEA says that an aggressive effort to deploy renewable energy and energy efficiency (and energy storage) to keep global warming below the dangerous threshold of 2°C — their 2DS scenario — would require investment in clean energy of only about 1% of global GDP per year.  But it would still be astoundingly cost-effective:

The $44 trillion additional investment needed to decarbonise the energy system in line with the 2DS [2C scenario] by 2050 is more than offset by over $115 trillion in fuel savings – resulting in net savings of $71 trillion.

This is in line with the latest finding by the world’s scientists and governments that stabilizing at 2°C would have a net effect on growth of 0.06% per year — essentially no effect at all compared to the staggering amount of climate damages avoided.

While serious progress would be low-cost, the new report explains that “the overall picture of progress remains bleak.”  That’s why the new $44 trillion estimate for stabilizing below 2°C replaces a $36 trillion estimate in ETP 2012:

Some of the increase is due to accounting changes, but the calculations show that the cost of decarbonising the energy system – in real terms – is about 10% higher than it was two years ago.  In part, this illustrates something the IEA has been saying for some time:  the longer we wait, the more expensive it becomes to transform our energy system.

The $4 Trillion Mistake:  Climate Action Delayed Is Climate Action Denied