Analysis: Waiting to cut emissions will ultimately make it more expensive
Putting U.S. carbon emissions on a steep downward path would cost plenty of money. But waiting to act is way more expensive, a new analysis out this morning concludes.
Driving the news: The research firm Energy Innovation modeled two policy scenarios for reaching net-zero emissions by 2050, a common target for limiting the amount of future warming.
- One scenario starts aggressive efforts now, the other that waits until 2030.
- "The longer we wait, the more drastic the [emissions] cuts — and associated costs — will be," the firm notes.
How it works: The analysis looks at changes in capital and operational costs in the country's energy system, as well as fuel spending, as a way to represent the costs of policy packages.
- Their metric aims to capture net expenditures by government, consumers and industry in areas including power infrastructure, vehicle purchases, heat equipment and more.
- The two scenarios explored spending and policy costs in areas like fuel economy and zero-carbon power standards, battery deployment, building efficiency, industrial fuel changes and more.
The big picture: The cumulative costs of the 2030 scenario are 72% higher on a net present value basis.
- "In addition to accumulating higher costs, delaying climate action requires astounding rates of clean energy deployment and buildout of manufacturing capacity."
- Other costs stem from "stranded assets," the report finds. Continued build-out of fossil fuel-powered industrial plants and equipment, followed by a seismic shift starting in 2030, means "we will need to retire much more polluting equipment before the end of its functional life. And that isn’t cheap."
What we're watching: The Biden administration plans to ask Congress for lots of money to boost the deployment of low-carbon energy and climate-friendly infrastructure.
- It is also planning a suite of new executive regulations aimed at cutting emissions.
Of note: The analysis and chart above is only about costs. It does not consider benefits from speeding up the energy transition, such as the health effects of air pollution abatement.