By George Harvey
The widely respected International Energy Agency (IEA) has come up with a figure for the cost of converting the world to renewable power by 2050 and bringing climate change to a halt. The figure is $44 trillion.
That might sound like a lot of money, perhaps an impossibly great amount. But the IEA did not just calculate at the cost. They also figured out how much money would be saved by not buying the fossil fuels we would otherwise, and that comes to $115 trillion. It does not take a lot of math to combine these figures and see that by switching to renewable power, we can save the world $71 trillion over the next thirty-five years.
Reviewing these figures and comparing them with things we can find easily available, we find them unsurprising. About a third of the largest companies on Earth deal in fossil fuels. The largest twenty-one oil and gas companies had a combined annual gross income of well over $4 trillion per year. The hundreds of smaller oil and gas companies, the coal mining companies, and the fossil-fuel-burning utilities are all in addition to that. We might guess that $4 trillion is less than half of the total we spend each year on fossil fuels.
One thing the IEA did not address is the external costs that we might save. They did not consider the costs of peripheral or resulting damage.
The World Health Organization, an agency of the United Nations, estimates that air pollution from fossil fuels kills over three million people each year, and many millions more have chronic health problems. The costs of health care required because of our use of fossil fuels come to an estimated $128 billion per year in the US alone, and over $1 trillion worldwide.
Another external cost is dealing with damage caused by climate change. This is a harder figure to pin down, but the International Panel on Climate change estimates it was about $1.2 trillion per year in 2012. As climate change worsens, this figure would increase.
There are also other external costs. Among them is the price of national and international security resulting from problems associated with climate change, peak oil, and declining resources. The US Department of Defense says that climate change is one of the greatest threats to national security. Also, there are the increased costs of health care not related directly to air pollution, as invasive diseases spread. Other costs come from drought and unstable agricultural conditions.
So the good news is really good. We can avoid many of these costs, which could come to well over $100 trillion over the next 36 years, by switching to renewable power. And while we can do that, we save trillions of dollars each year by not having to pay for fossil fuels.
Right now, we have all the technical resources we need to switch. The cost of renewable power has gone down so low that it is cheaper for many ordinary ratepayers in New England to buy solar panels for power than to buy the same amount of power they would produce from the grid, even including financing costs. A big deciding factor on this is the question of group net-metering. It is also less expensive for a utility to buy power from wind turbines than from any other resource, even considering the costs for backup power when the wind turbines are not generating. I
We should all know that the costs of solar power are only a small fraction of what they were only a few years ago. What many people do not know is that the costs of windpower and battery backup have both been halved in less than a decade. The costs of currently available technology are still going down. The costs of many technologies we see being developed are even lower.
In fact, the only bad news about climate change and limited fossil fuel resources is that it will be painful for humans and nature alike if we fail to do what clearly needs to be done. Speeding our response to climate change will prevent a lot of suffering.
Even for those people so unscientific as to deny that human-caused climate change is happening, there is good, simple reason to switch to renewable power. Every dollar spent on renewables saves more than two we do not spend on fossil fuels.