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 Researchers observe major hand hygiene problems in operating rooms
30.03.2015 | University of Gothenburg

nachricht Electric vehicle range in 450,000 kilometer real-world test
30.03.2015 | Technische Universität Chemnitz

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: Experiment Provides the Best Look Yet at 'Warm Dense Matter' at Cores of Giant Planets

In an experiment at the Department of Energy's SLAC National Accelerator Laboratory, scientists precisely measured the temperature and structure of aluminum as...

Im Focus: Energy-autonomous and wireless monitoring protects marine gearboxes

The IPH presents a solution at HANNOVER MESSE 2015 to make ship traffic more reliable while decreasing the maintenance costs at the same time. In cooperation with project partners, the research institute from Hannover, Germany, has developed a sensor system which continuously monitors the condition of the marine gearbox, thus preventing breakdowns. Special feature: the monitoring system works wirelessly and energy-autonomously. The required electrical power is generated where it is needed – directly at the sensor.

As well as cars need to be certified regularly (in Germany by the TÜV – Technical Inspection Association), ships need to be inspected – if the powertrain stops...

Im Focus: 3-D satellite, GPS earthquake maps isolate impacts in real time

Method produced by UI researcher could improve reaction time to deadly, expensive quakes

When an earthquake hits, the faster first responders can get to an impacted area, the more likely infrastructure--and lives--can be saved.

Im Focus: Atlantic Ocean overturning found to slow down already today

The Atlantic overturning is one of Earth’s most important heat transport systems, pumping warm water northwards and cold water southwards. Also known as the Gulf Stream system, it is responsible for the mild climate in northwestern Europe. 

Scientists now found evidence for a slowdown of the overturning – multiple lines of observation suggest that in recent decades, the current system has been...

Im Focus: Robot inspects concrete garage floors and bridge roadways for damage

Because they are regularly subjected to heavy vehicle traffic, emissions, moisture and salt, above- and underground parking garages, as well as bridges, frequently experience large areas of corrosion. Most inspection systems to date have only been capable of inspecting smaller surface areas.

From April 13 to April 17 at the Hannover Messe (hall 2, exhibit booth C16), engineers from the Fraunhofer Institute for Nondestructive Testing IZFP will be...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

World Conference On Regenerative Medicine 2015: Registration And Abstract Submission Now Open

25.03.2015 | Event News

University presidents from all over the world meet in Hamburg

19.03.2015 | Event News

10. CeBiTec Symposium zum Big Data-Problem

17.03.2015 | Event News

 
Latest News

Biology in a twist -- deciphering the origins of cell behavior

31.03.2015 | Life Sciences

Wrapping carbon nanotubes in polymers enhances their performance

31.03.2015 | Materials Sciences

Research Links Two Millennia of Cyclones, Floods, El Niño

31.03.2015 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>