A few decades ago, renewable energy was too expensive to compete with fossil fuels. However, solar photovoltaic arrays and wind turbines now provide the most economic ways to produce electricity. However, many players in the energy industry hold on to the argument that clean power is too expensive, in spite of scientific evidence indicating the opposite.

While it is true that clean power technologies also have an environmental footprint associated with manufacturing, shipping and installation, the long-term benefit far outweighs the initial impact. For example, many coal-fired power stations release one tonne of carbon dioxide for every 1,000 kWh of electricity generation, while solar arrays and wind turbines operate with zero emissions.

The New Climate Economy Report

The 2018 report from the Global Commission on the Economy and Climate concludes that climate change prevention could save the global economy US$ 26 trillion by the year 2030. There is an obvious benefit from preventing the destructive consequences of extreme weather, but there are also benefits from the business standpoint:

• Reduction of energy expenses
• Creation of new market opportunities
• GDP growth and improved competitiveness

In other words, even if fossil fuels did not have an environmental impact, they would still lose against renewable energy based on the economic benefits alone. There is no point in holding on to technologies that are more expensive to own, while causing environmental damage.

The New Climate Economy Report states that the next few years are critical, since government policies and investment decisions will set the course for the global energy industry during the next two decades. The potential benefits identified in the report are significant:

• Preventing 700,000 premature deaths associated with air pollution.
• Creating over 65 million jobs.
• With decisive application of carbon taxes, US$ 2.8 trillion could be available for high-priority public issues.

The report also estimates that the world will invest US$90 trillion in new infrastructure by 2030. With a potential benefit of US$26 trillion, climate change prevention can compensate for more than 28% of the expected infrastructure costs. To capture all the benefits available, the report proposes three actions:

• Putting a price on carbon emissions, to reflect the real damage caused.
• Promote mandatory disclosure of climate-related financial risk.
• Develop sustainable infrastructure and technologies.

Australian Research Organisations Reach Similar Conclusions

The AGU100 report was developed with joint efforts between the University of Melbourne, the Australian National University and the Commonwealth Scientific and Industrial Research Organisation. They also analysed the potential global impact of climate change, and reached the following conclusions:

• By the year 2100, the world will have saved US$ 17,489 billion per year if countries meet the Paris Accord target – keeping global temperature rise below 2°C.
• With a temperature rise of 3°C, the world economy loses US$ 9,593.71 per year by 2100.
• Losses increase to US$ 23,149.18 billion per year with a temperature rise of 4°C.

An alarming conclusion in the AGU100 report is that these losses are not spread evenly throughout the world. The most susceptible regions are Sub-Saharan Africa, India and Southeast Asia, with developing countries that are very vulnerable to extreme weather.

Another study was carried out by the City of Melbourne, specifically for the state of Victoria. According to the report, a failure to address emissions could cause losses of AU$ 12.6 billion between 2020 and 2050.

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