A new report from a group called the Energy Transitions Commission shows that countries could cut global carbon emissions in half by 2040 and stay well below the 2-degree warming mark agreed to at the Paris Climate Conference.
The Energy Transitions Commission includes the chairman of Shell Oil, former US Vice President Al Gore, British economist Nicholas Stern and former US senator, and UN Foundation chief, Tim Wirth. The new report is titled, "Better Energy, Greater Prosperity."
The report says the pathway to staying below 2 degrees by the middle of the century depends largely upon clean electrification, according to Rachel Kyte, one of the group’s commissioners and the UN Secretary-General’s Special Representative for Sustainable Energy for All.
“If we can clean up the electricity supply, if we can have massive inroads in energy efficiency ... and if we electrify everything, including, particularly, transport, we can get to an energy system that allows us to be well below 2 degrees, that allows us to be decarbonized by the middle of the century and is affordable and feasible, technologically,” Kyte says.
The main message of the report is that “this is doable,” Kyte says. The technology is available and financing the plan is possible. It will “require enormous amounts of political will and real leadership, but it's possible,” she says.
When the commission looked closely into the financing of such an ambitious plan, they arrived at a figure between $300 and $600 billion per year above “business as usual.” By way of comparison, Kyte points out that this is about one-third the cost of a new nuclear submarine.
Putting a price on carbon is fundamental to the plan’s success, Kyte says. The commissioners are “not prescriptive” about how to price carbon, but “the price has to be sufficient to drive down the amounts of carbon in the energy system and the economy,” Kyte says. “One of the problems we see around the world at the moment is that the price on carbon is too low to be effective.”
Carbon pricing must also be coupled with public policy that does not subsidize fossil fuels where doing so would be harmful, Kyte adds.
“There is a need to level the playing field for renewable energy in many parts of the world,” she says. “The institutions, the energy systems and the regulation of those systems in most countries was designed around a model of a centralized, fossil-fuel-fed grid that took fossil fuel [energy] and distributed it as far as it could go. This new report shows that the energy systems of the future, in addition to being decarbonized, are going to be increasingly decentralized … There will be multiple grids [and] there will be electricity generated off the grid. Buildings will generate energy and store it and feed it back into the grid. It’s going to be a much more modular, distributed system.”
For this to work, institutions, utilities and regulations are going to have to shift, Kyte says. “There's a really important role for public policy in embracing what energy systems of the future are going to look like and creating a level playing field for renewables to feed into the grid, to encourage more renewables, to encourage more distributed systems.
This is "a big lift for government,” the report acknowledges.
In some respects, the developing world is a bit ahead of the curve because they don't have big, centralized electrical systems. Putting in modular systems would, in fact, be easier. But many developing countries are “facing a prior order of business, which is that they have large gaps in access to energy,” Kyte says.
“There are countries where the penetration of electricity services is only perhaps 20 or 25 percent of the population,” she explains. “So, the prior order of business is to get everybody energy.”
The good news, she adds, is that innovations in business models and the falling price of technology make it possible to imagine closing that energy access gap more cheaply and quickly than had been thought possible.
Increased energy efficiency in both the developed and the developing world remains a crucial goal, Kyte says. Large, energy-intensive economies need to make more progress and developing countries, as they imagine growth and urbanization, must work to grow as efficiently as possible.
Despite the recent Trump administration decision to withdraw from the Paris climate accord, Kyte remains optimistic.
“As I travel around the world and talk to governments, to mayors, to leaders of private companies and to bankers and financiers, from a risk perspective and from the perspective of opportunity and cleaner growth, [they see] the energy transition as fundamental,” she says. “People want to be on the leading edge of that, rather than on back edge of that.”
This is true in places like Zambia, Chile, Morocco and across the South Pacific, Kyte says. It's also true in the cities and states of the United States. “I’m an optimist that we can do this, and I'm optimistic that we will do it,” she says. “Where I think we really have to double down is with the speed with which we do it.”