Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Putting a price tag on the 2° climate target

02.07.2014

Addressing climate change will require substantial new investment in low-carbon energy and energy efficiency – but no more than what is currently spent on today’s fossil-dominated energy system, according to new research from the International Institute for Applied Systems Analysis (IIASA) and partners.

To limit climate change to 2° Celsius, low-carbon energy options will need additional investments of about US $800 billion a year globally from now to mid-century, according to a new study published in the journal Climate Change Economics. But much of that capital could come from shifting subsidies and investments away from fossil fuels and associated technologies. Worldwide, fossil subsidies currently amount to around $500 billion per year.


Accomplishing a major transition in energy systems from fossil fuels to renewable energy requires substantial investment, a new study shows.

© kreicher istockphoto.com

“We know that if we want to avoid the worst impacts of climate change, we need to drastically transform our energy system,” says IIASA researcher David McCollum, who led the study. “This is the first comprehensive analysis to show how much investment capital is needed to successfully make that transition.”

The study, part of a larger EU research project examining the implications and implementation needs of climate policies consistent with the internationally agreed 2° C target, compared the results from six separate global energy-economic models, each with regional- and country-level detail. The authors examined future scenarios for energy investment based on a variety of factors, including technology progress, efficiency potential, economics, regional socio-economic development, and climate policy. 

Investments in clean energy currently total around $200 to 250 billion per year, and reference scenarios show that with climate policies currently on the books, this is likely to grow to around $400 billion. However, the amount needed to limit climate change to the 2° target amounts to around $1200 billion, the study shows.

The energy investments needed to address climate change continue to be an area of large uncertainty. By comparing the results from multiple models, the scientists were able to better define the costs of addressing climate change.

“Nearly all countries say that they’re on board with the 2° target; some have even made commitments to reduce their greenhouse gas emissions. But until now, it hasn’t been very clear how to get to that point, at least from an investment point of view. It’s high time we think about how much capital is needed for new power plants, biofuel refineries, efficient vehicles, and other technologies—and where those dollars need to flow—so that we get the emissions reductions we want,” says McCollum.

IIASA Energy Program Director Keywan Riahi, another study co-author and project leader, says, “Given that energy-supply technologies and infrastructure are characterized by long lifetimes of 30 to 60 years or more, there’s a considerable amount of technological inertia in the system that could impede a rapid transformation. That’s why the energy investment decisions of the next several years are so important: because they will shape the direction of the energy transition path for many years to come.”

The study shows that the greatest investments will be needed in rapidly developing countries, namely in Asia, Latin America, and Sub-Saharan Africa.

“Energy investment in these countries is poised to increase substantially anyway. But if we’re serious about addressing climate change, we must find ways to direct more investment to these key regions. Clever policy designs, including carbon pricing mechanisms, can help.” says Massimo Tavoni, researcher at the Fondazione Eni Enrico Mattei, a climate research center in Italy, and overall coordinator of the LIMITS project, of which the new study is a part.

The researchers note that their analysis of future investment costs does not attempt to quantify the potentially major fuel savings from switching from fossil fuels to renewable sources, such as wind and solar energy. As shown in the IIASA-led Global Energy Assessment, such savings could offset a considerable share of increased investment on a global scale.

This study provided an important input into the Intergovernmental Panel on Climate Change Fifth Assessment Report, Working Group III, Chapter 16 on Cross-cutting Investment and Finance Issues.

Reference
McCollum D, Nagai Y, Riahi K, Marangoni G, Calvin K, Pietzcker R, Van Vliet J, van der Zwaaan B. (2014). Energy investments under climate policy: a comparison of global models. Climate Change Economics Vol. 04, No. 04. DOI: 10.1142/S2010007813400101

About the LIMITS project
This study was conducted as part of the Low Climate Impact Scenarios and the Implications of Required Tight Emissions Control Strategies (LIMITS) project, a European Union Seventh Framework Program (FP-7)-supported collaboration between the International Institute for Applied Systems Analysis (IIASA), the Fondazione Eni Enrico Mattei (FEEM) in Italy, the Potsdam Institute for Climate Impact Research (PIK) in Germany, the, the Joint Research Centre of the European Commission, Central European University, the National Development and Reform Commission Energy Research Institute in China, the Indian Institute of Management (IIM), the National Institute for Environmental Studies (NIES) in Japan, and the Pacific Northwest National Laboratory (PNNL) in the US.

For more information contact:

David McCollum
Research Scholar
Energy
+43(0) 2236 807 586
mccollum@iiasa.ac.at

Katherine Leitzell
IIASA Press Office
Tel: +43 2236 807 316
Mob: +43 676 83 807 316
leitzell@iiasa.ac.at

About IIASA:
IIASA is an international scientific institute that conducts research into the critical issues of global environmental, economic, technological, and social change that we face in the twenty-first century. Our findings provide valuable options to policy makers to shape the future of our changing world. IIASA is independent and funded by scientific institutions in Africa, the Americas, Asia, Oceania, and Europe. www.iiasa.ac.at

Weitere Informationen:

http://www.iiasa.ac.at/web/home/about/news/20140702-ene-LIMITS.html

Katherine Leitzell | idw - Informationsdienst Wissenschaft

Further reports about: Analysis Climate Climate change Energy IIASA Italy emissions investments renewable energy

More articles from Studies and Analyses:

nachricht Tracking Down the Causes of Alzheimer’s
03.09.2015 | Universität Basel

nachricht Pathways to Deep Decarbonization in Germany
02.09.2015 | Wuppertal Institut für Klima, Umwelt, Energie GmbH

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Fraunhofer ISE Develops Highly Compact Inverter for Uninterruptible Power Supplies

Silicon Carbide Components Enable Efficiency of 98.7 percent

Researchers at the Fraunhofer Institute for Solar Energy Systems ISE have developed a highly compact and efficient inverter for use in uninterruptible power...

Im Focus: How wind sculpted Earth's largest dust deposit

China's Loess Plateau was formed by wind alternately depositing dust or removing dust over the last 2.6 million years, according to a new report from University of Arizona geoscientists. The study is the first to explain how the steep-fronted plateau formed.

China's Loess Plateau was formed by wind alternately depositing dust or removing dust over the last 2.6 million years, according to a new report from...

Im Focus: An engineered surface unsticks sticky water droplets

The leaves of the lotus flower, and other natural surfaces that repel water and dirt, have been the model for many types of engineered liquid-repelling surfaces. As slippery as these surfaces are, however, tiny water droplets still stick to them. Now, Penn State researchers have developed nano/micro-textured, highly slippery surfaces able to outperform these naturally inspired coatings, particularly when the water is a vapor or tiny droplets.

Enhancing the mobility of liquid droplets on rough surfaces could improve condensation heat transfer for power-plant heat exchangers, create more efficient...

Im Focus: Increasingly severe disturbances weaken world's temperate forests

Longer, more severe, and hotter droughts and a myriad of other threats, including diseases and more extensive and severe wildfires, are threatening to transform some of the world's temperate forests, a new study published in Science has found. Without informed management, some forests could convert to shrublands or grasslands within the coming decades.

"While we have been trying to manage for resilience of 20th century conditions, we realize now that we must prepare for transformations and attempt to ease...

Im Focus: OU astrophysicist and collaborators find supermassive black holes in quasar nearest Earth

A University of Oklahoma astrophysicist and his Chinese collaborator have found two supermassive black holes in Markarian 231, the nearest quasar to Earth, using observations from NASA's Hubble Space Telescope.

The discovery of two supermassive black holes--one larger one and a second, smaller one--are evidence of a binary black hole and suggests that supermassive...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Together - Work - Experience

03.09.2015 | Event News

Networking conference in Heidelberg for outstanding mathematicians and computer scientists

20.08.2015 | Event News

Scientists meet in Münster for the world’s largest Chitin und Chitosan Conference

20.08.2015 | Event News

 
Latest News

Lighter with Laser Welding

03.09.2015 | Process Engineering

For 2-D boron, it's all about that base

03.09.2015 | Materials Sciences

Phagraphene, a 'relative' of graphene, discovered

03.09.2015 | Materials Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>