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Green energy 'to free up trillions'

Studies show massive global savings from transition to low carbon economy

Green energy 'to free up trillions' image

A low-carbon energy system could free up trillions of dollars over the next 20 years to invest in better economic growth, according to two new studies.

Climate Policy Initiative reports comparing the costs and benefits of low-carbon electricity and transport highlight the risk of losses in the financial value of existing fossil fuel assets.

So-called “asset stranding” is “critical because it constrains governments and businesses’ ability to borrow against them to finance growth and investment, including investment in a low-carbon transition”, the CPI said.

The reports found that governments rather than private investors and corporations face the majority of stranding risk as they own 50% to 70% of global oil, gas, and coal resources, and collect taxes and royalties on the portion they do not own.

Transitioning to a low-carbon electricity system would save the global economy an estimated $1.8tn between 2015 and 2035. Swapping oil for low-carbon transport could increase global investment capacity by trillions or result in net costs, depending on policy choices.

Regions that import more oil than they produce — including the United States, Europe, China, and India — stand to benefit most from reducing their oil consumption in favour of low-carbon alternatives.

A further key finding was that dumping coal “can achieve 80% of the needed emissions reductions for just 12% of the asset value at risk”.

CPI executive director Tom Heller said: “For (many) policymakers around the world… the low-carbon transition is a no-brainer. It not only reduces climate risks, its benefits are clear and significant.”

Image: the reports highlight the savings benefits of a shift away from traditional generation (sxc.hu)

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