The transition to a decarbonized energy system by around 2050 is expected to save the world at least $12 trillion, as opposed to continuing the current levels of fossil fuels, new research from the Oxford Martin School showed.
The research, Empirically Grounded Technology Forecasts and the Energy Transition, is a collaboration between the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Program on the Post-Carbon Transition and the Smith School of Enterprise and Environment at the University of Oxford, and SoDa Labs at Monash University, which was published in the Joule journal on Tuesday.
The research found that the transition to nearly 100% clean energy by 2050 would lead to lower energy system costs than a fossil fuel system while contributing to the global economy and expanding energy access to more people around the world.
'There is a pervasive misconception that switching to clean, green energy will be painful, costly and mean sacrifices for us all, but that is just wrong,' said Professor Doyne Farmer from the Institute for New Economic Thinking at the Oxford Martin School.
He noted that renewable costs have been trending down for decades.
“They are already cheaper than fossil fuels in many situations and our research shows that they will become cheaper than fossil fuels across almost all applications in the years to come. If we accelerate the transition, they will become cheaper faster. Completely replacing fossil fuels with clean energy by around 2050 will save us trillions,' he said.
The research team developed a probabilistic model to estimate the costs of possible future energy systems more accurately based on past data.
The data used in the study includes 45 years of solar energy costs, 37 years of wind energy costs and 25 years of battery storage.
According to the study, there is evidence that technological progress does not slow when technologies reach their saturation phase. Thus, clean energy technology costs are expected to continue at their current pace and accelerated transition is estimated to save the world economy by $12 trillion by 2050.
Professor Farmer advocated for ambitious policies to dramatically accelerate this transition to a clean energy future as quickly as possible, which he said 'is not only urgently needed for climate reasons, but could save the world trillions in future energy costs while offering a cleaner, cheaper, more energy secure future.'
'The world is facing a simultaneous inflation crisis, national security crisis and climate crisis, all caused by our dependence on high cost, insecure, polluting, fossil fuels with volatile prices,' he said.
Lead author Rupert Way underlined that only a few year ago, net zero by 2050 was believed to be so expensive that it was barely considered credible.
'Yet now, even the most pessimistic models concede that it is entirely within reach. Our research goes further and shows that scaling up key green technologies is likely to drive their costs down so far that overall they generate net cost savings and the faster we go, the more we will save,' he said.
'Accelerating the transition to renewable energy is now the best bet not just for the planet, but for energy costs too,' he added.
By Nuran Erkul Kaya