THE WORLD’S $1.8 TRIL PROFIT IN NEW ENERGY
Moving to a Low-Carbon Economy; A low-carbon energy transition can save the global economy trillions over the next 20 years.
October 2014 (Climate Policy Initiative)
“…[T]wo reports clearly demonstrate that, with the right policies, a low-carbon energy system consistent with avoiding the most damaging effects of climate change could free up trillions of dollars over the next 20 years to invest in better economic growth…[Moving to a Low Carbon Economy: The Financial Impact of the Low-Carbon Transition] compares the costs of low-carbon electricity and low-carbon transportation systems with current systems…[Moving to a Low Carbon Economy: The Impact of Different Policy Pathways on Fossil Fuel Asset Values] focuses on the risk of losses in the financial value of existing fossil fuel assets (so called ‘asset stranding’). A loss in assets’ value is critical because it constrains governments and businesses’ ability to borrow against them to finance growth and investment, including investment in a low-carbon transition…Governments, rather than private investors and corporations, face the majority of stranding risk…[because they] own 50-70% of global oil, gas, and coal resources, as well as collect taxes and royalties on the portion they do not own…
“…[G]overnments also control much of the policy that could lead either to asset stranding or financial savings…Transitioning to a low-carbon electricity system would bring the global economy an estimated $1.8 trillion in financial savings between 2015 and 2035…[because] reduced operational costs associated with extracting and transporting coal and gas outweighs increased financing costs for renewable energy and losses in the value of existing fossil fuel assets…”
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