Switching to renewable energy could save trillions

Switching to renewable energy could save trillions

Offshore wind farm

The cost of green energy, such as wind and solar, has been falling for decades

Switching from fossil fuels to renewable energy could save the world up to $ 12 trillion (£ 10.2 trillion) by 2050, says a University of Oxford study.

The report said it was wrong and pessimistic to say that moving quickly to cleaner energy sources was costly.

Gas prices rose due to growing concerns about energy supplies.

But researchers say going green now makes economic sense due to falling renewable energy costs.

“Even if you are a climate denier, you should agree with what we are advocating,” Professor Doyne Farmer of the Oxford Martin School’s Institute for New Economic Thinking told BBC News.

“Our central conclusion is that we should go full speed ahead with the transition to green energy because it will save us money,” he said.

The report’s findings are based on analyzing historical data on renewable energy and fossil fuel prices and then modeling how they are likely to change in the future.

The data for fossil fuels goes back more than 100 years to 2020 and shows that after taking into account inflation and market volatility, the price hasn’t changed much.

Renewable energies have only been around for a few decades, so there is less data. But during that time, continuous technological improvements meant that the cost of solar and wind energy dropped rapidly, at a rate approaching 10% per year.

The report’s expectation that the price of renewables will continue to fall is based on “probabilistic” models, using data on how massive investments and economies of scale have made other similar technologies cheaper.

“Our latest research shows that the rise of key green technologies will continue to reduce their costs and the faster we go, the more we will save,” says Dr. Rupert Way, lead author of the Smith School of Enterprise and the Environment report.

Wind and solar are already the cheapest option for new energy projects, but doubts remain about how to best store energy and balance the grid when changes in the weather lead to a decline in renewable production.

Zero net cost

In 2019 Philip Hammond, then Chancellor of the Exchequer, wrote to the prime minister to say that the cost of achieving zero net greenhouse gas emissions by 2050 in the UK would be over £ 1 trillion. This report states that the likely costs were overstated and discouraged investment.

He also says that the Intergovernmental Panel on Climate Change (IPCC) predictions that the cost of keeping global temperatures below 2 degrees would correspond to a loss of GDP by 2050 were too pessimistic. The switch to renewables, it is said, could have turned out to be a “net economic benefit”.

The research was published in the journal Joule and is a collaboration between the Institute for New Economic Thinking of the Oxford Martin School, the Oxford Martin Program on the Post-Carbon Transition, the Smith School of Enterprise & Environment of the University of Oxford, and SoDa Labs at Monash University.

Follow Jonah on Twitter at @jonahfisherbbc

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