A recent study from Oxford suggests that decarbonizing energy systems by 2050 will save the world more than $12 trillion and achieve a profitable net-zero energy system.
According to the study that analyzed thousands of green transition cost scenarios produced by the primary energy models, the faster the transition to renewable energy occurs, the greater the savings potential, which will translate into a “huge boost for the global economy” as countries move away from fossil fuels.
“The decarbonization of the energy system will not only see a significant reduction. in the cost of producing and distributing energy, but it will also allow higher levels of energy to be produced and thus help expand access to energy across the planet,” said researchers from the University of Oxford.
“There’s a widespread misconception that switching to clean, green energy will be painful, costly and will mean sacrifices for all of us, but that’s just wrong,” said team leader Doyne Farmer, director of the complexity economics program at the Institute of New Technologies of the University of Oxford. Economic Thought.
Rising temperatures are likely to significantly reduce global wealth by 2050 as crop yields fall, disease spreads and rising sea levels consume coastal cities, a major insurance company warned Thursday. highlighting the consequences if the world does not rapidly reduce its use of fossil fuels.
The researchers analyzed thousands of transition cost scenarios produced by leading energy models. They found that the actual cost of solar energy fell twice as fast as the most ambitious projections from these models. For 20 years, all of these models consistently overestimated the future expenses of key clean energy technologies compared to reality.
The Oxford team used a different approach, developing a “probabilistic model” to estimate the costs of potential future power systems more accurately based on past data. Probabilistic models are widely used in industry and research to estimate the probability of future events. The betting industry, for example, uses probabilistic models to make forecasts that, while never perfect, do hit the odds on average and that saw them make £5.8bn in profits in the UK in 2020 alone.
In earlier work, the Oxford team showed that they could “get the odds right” in their probabilistic forecasts of energy technology costs. He tested the forecasting method against decades of historical data for 50 different technologies, using a technique called backtesting, which is routinely used in the financial industry.
The data used in this study includes 45 years of solar energy costs, 37 years of wind energy costs, and 25 years of battery storage. Using probabilistic modelling, this study shows that the probability of further cost reductions in key green energy technologies is now so high that our best bet is to quickly push through the energy transition.
Net zero carbon
A common objection to scenarios for a rapid transition to net zero carbon is the need for large amounts of energy storage to handle intermittent renewables. The study showed that the costs of key storage technologies, such as batteries and hydrogen electrolysis, are also likely to drop dramatically. Meanwhile, the costs of nuclear power have risen steadily over the past five decades, making it highly unlikely to be cost-competitive with falling renewable energy and storage costs.
“There is a widespread misconception that switching to clean, green energy will be painful, expensive and will mean sacrifices for all of us, but that is simply wrong,” says Doyne Farmer, lead author of the Institute for New Economic Thinking at Oxford Martin School.
Rupert Way, a postdoctoral researcher and lead author from the Smith School of Enterprise and the Environment, also pointed to the sharp drop in the cost of clean energy, emphasizing that past cost assessment models have made governments “nervous” about promoting energy transition plans.
“Previous models that predicted high costs for the transition to zero-carbon energy have discouraged companies from investing and made governments nervous about setting policies that will accelerate the energy transition and reduce dependence on fossil fuels, but clean energy costs have fallen dramatically over the last decade, much more so. faster than those models expected,” Way said.
In addition to highlighting the profitability of renewable energy, the study noted that the cost of nuclear power has increased over the past five decades, making the technology less cost-competitive.
“The world is simultaneously facing an inflation crisis, a national security crisis, and a climate crisis, all caused by our dependence on high-cost, unsafe, polluting, and volatile-priced fossil fuels,” he said, noting that renewable energy they provide “a cleaner environment, a cheaper future and greater energy security.”
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