Much of the hundreds of billions of dollars worth of renewable energy investment that is needed to prevent the worst effects of climate change could come from the substantial subsidies given to fossil fuels, a new report has found.
In a new study published in the journal Climate Change Economics, researchers from the International Institute for Applied Systems Analysis (IIASA) attempt to put a price tag on efforts to limit the global temperature rise to 2C.
“Many countries say that they’re on board with the a target of 2C global mean temperature stabilisation by 2100; some have even made commitments to reduce their greenhouse gas emissions. But until now, it hasn’t been very clear how to get to that point, at least from an investment point of view,” said study lead author David McCollum.
“It’s high time we think about how much capital is needed for new power plants, biofuel refineries, efficient vehicles, and other technologies – and where those dollars need to flow – so that we get the emissions reductions we want.”
Modelling multiple scenarios, they calculate that an extra $800 billion (£467 billion) of annual investment is needed globally between now and 2050, on top of the $400 billion (£233 billion) a year that will be raised by existing policies. This is a significant increase from the $200-300 billion (£117-175 billion) invested per year today.
Thankfully, the researchers say that a large amount of the sum could be sourced from the global subsidies given to the production and consumption of fossil fuels.
The exact total of such subsidies is – like the quantity of required investment – difficult to pin down. According to the International Energy Agency (IEA), in 2012 direct fossil fuels subsidies totalled $544 billion (£323 billion).
The IIASA researchers point out that if this money were shifted into supporting renewables, it would go a long way to meeting the investment gap. Furthermore, their study does not account for the potentially significant savings that would be gained by switching from polluting fossil fuels to cleaner energy.
However, because energy infrastructure typically has a lifespan of between 30 and 60 years, the study warns that the transition must take place soon.
“That’s why the energy investment decisions of the next several years are so important – because they will shape the direction of the energy transition path for many years to come,” said IIASA energy program director Keywan Riahi.
UN experts recently criticised the massive sums of money given to the fossil fuel industry in subsidies, arguing that they must be curbed if efforts to decarbonise are to succeed.
Taking into account indirect subsidies, such as the failure to charge for pollution and climate change, the International Monetary Fund estimates that the subsidies actually amount to around $2 trillion (£1.19 trillion) – far surpassing the $101 billion (£59.7 billion) given to renewables in 2012.
In April, the Intergovernmental Panel on Climate Change warned that investments in fossil fuels, such as oil and coal, must drop by $30 billion (£18 billion) a year, while renewable energy’s share of global production will have to rise from 17% in 2010 to around 50% in 2050.
Without mitigation, scientists estimate that global temperatures may increase by as much as 3.7C to 4.8C by 2100, with devastating consequences around the world.
Photo: Intel Free Press via Flickr
7 New Technologies That Could Radically Change Our Energy Consumption
Most of our focus on technological development to lessen our environmental impact has been focused on cleaner, more efficient methods of generating electricity. The cost of solar energy production, for example, is slated to fall more than 75 percent between 2010 and 2020.
This is a massive step forward, and it’s good that engineers and researchers are working for even more advancements in this area. But what about technologies that reduce the amount of energy we demand in the first place?
Though it doesn’t get as much attention in the press, we’re making tremendous progress in this area, too.
New Technologies to Watch
These are some of the top emerging technologies that have the power to reduce our energy demands:
- Self-driving cars. Self-driving cars are still in development, but they’re already being hailed as potential ways to eliminate a number of problems on the road, including the epidemic of distracted driving ironically driven by other new technologies. However, even autonomous vehicle proponents often miss the tremendous energy savings that self-driving cars could have on the world. With a fleet of autonomous vehicles at our beck and call, consumers will spend less time driving themselves and more time carpooling, dramatically reducing overall fuel consumption once it’s fully adopted.
- Magnetocaloric tech. The magnetocaloric effect isn’t exactly new—it was actually discovered in 1881—but it’s only recently being studied and applied to commercial appliances. Essentially, this technology relies on changing magnetic fields to produce a cooling effect, which could be used in refrigerators and air conditioners to significantly reduce the amount of electricity required.
- New types of insulation. Insulation is the best asset we have to keep our homes thermoregulated; they keep cold or warm air in (depending on the season) and keep warm or cold air out (again, depending on the season). New insulation technology has the power to improve this efficiency many times over, decreasing our need for heating and cooling entirely. For example, some new automated sealing technologies can seal gaps between 0.5 inches wide and the width of a human hair.
- Better lights. Fluorescent bulbs were a dramatic improvement over incandescent bulbs, and LEDs were a dramatic improvement over fluorescent bulbs—but the improvements may not end there. Scientists are currently researching even better types of light bulbs, and more efficient applications of LEDs while they’re at it.
- Better heat pumps. Heat pumps are built to transfer heat from one location to another, and can be used to efficiently manage temperatures—keeping homes warm while requiring less energy expenditure. For example, some heat pumps are built for residential heating and cooling, while others are being used to make more efficient appliances, like dryers.
- The internet of things. The internet of things and “smart” devices is another development that can significantly reduce our energy demands. For example, “smart” windows may be able to respond dynamically to changing light conditions to heat or cool the house more efficiently, and “smart” refrigerators may be able to respond dynamically to new conditions. There are several reasons for this improvement. First, smart devices automate things, so it’s easier to control your energy consumption. Second, they track your consumption patterns, so it’s easier to conceptualize your impact. Third, they’re often designed with efficiency in mind from the beginning, reducing energy demands, even without the high-tech interfaces.
- Machine learning. Machine learning and artificial intelligence (AI) technologies have the power to improve almost every other item on this list. By studying consumer patterns and recommending new strategies, or automatically controlling certain features, machine learning algorithms have the power to fundamentally change how we use energy in our homes and businesses.
Making the Investment
All technologies need time, money, and consumer acceptance to be developed. Fortunately, a growing number of consumers are becoming enthusiastic about finding new ways to reduce their energy consumption and overall environmental impact. As long as we keep making the investment, our tools to create cleaner energy and demand less energy in the first place should have a massive positive effect on our environment—and even our daily lives.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
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