Financing a transition to a clean energy economy

PIX 15550

Is a transition to clean energy financially possible?

Response:

Yes, according to some recent studies. If the world spends $5 trillion over the next 10 years on new cleaner energy technology and efficiency measures, that would reduce payments for fuel by $4 trillion, leaving a cost of $1 trillion. However clean energy would also reduce losses from disastrous weather events, fires, crop failures, acid oceans, and wasted energy, and social dislocation. Deputy executive director of International Energy Agency Richard Jones spoke to the Clean Energy Ministerial meeting last April announcing a report, “Tracking Clean Energy Progress.” The possibility exists that the transition would be cost neutral, if we do not delay too long.

UK economist Sir Nicholas Stern has said that early action to halt fossil fuel burning will result in more benefits than costs. In recent lectures he released his analysis that the cost of investing in clean energy quadruples if we wait until after 2020.  He said that if we are to keep the world’s temperature from increasing more than 2oC by 2050, we need to cut emissions from the 50 billions tons now emitted worldwide to below 44 by 2020.  This he say will require carbon taxes and regulations to reduce greenhouse gases, more research and incentives for green technology, government investment in networks like grids, labeling on products for consumer awareness, green investment banks and placing value on nature.

The International Monetary Fund study comparing different ways of putting incentives on a transition from fossil fuel to clean energy shows that it can be done without hurting economic stability and growth, and without putting an undue burden on developing nations.

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