Move to wind and solar makes economic sense
A transition from fossil fuels to renewable energy could save £10 trillion globally by 2050, according to a new study by Oxford University.
The report says claims that switching to green energy is expensive are incorrect. The cost of renewables is falling every year, so a shift to wind and solar is not just vital to address climate change, it also makes economic sense.
“Even if you’re a climate denier, you should be on board with what we’re advocating. Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money,” Professor Doyne Farmer of the Institute for New Economic Thinking at the Oxford Martin School said.
The report is a collaboration between the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Programme on the Post-Carbon Transition, the Smith School of Enterprise and Environment at the University of Oxford and SoDa Labs at Monash University.
It looked at price data for both fossil fuels and renewables and modelled the likely future costs. Analysis of fossil-fuel data from before 1920 to 2020 found that, when market volatility and inflation was taken into account, the price hadn’t changed much. Gas prices have increased greatly since 2020 but it remains to be seen if that trend will continue in the long term.
Data for renewables showed that, since they were introduced a few decades ago, the cost of wind and solar power has fallen at around 10% each year.
The study expects the cost of renewables to continue to decrease. “Our latest research shows scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save,” says the report’s lead author, Dr Rupert Way of the Smith School of Enterprise and the Environment.
The report says previous energy-economy models have underestimated the deployment rates of renewable technologies and overestimated their costs.
In 2019, the then Chancellor, Phillip Hammond, said the cost of the UK reaching net zero by 2050 would be more than £1 trillion. However, the report states that these costs were an overestimate and deterred investment.
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“Even if you’re a climate denier, you should be on board with what we’re advocating. Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money,” Professor Doyne Farmer