There is No Moral or Economic Justification for Inaction
The 2018 World Energy Outlook published by the International Energy Agency projects energy demands, supplies and costs under scenarios of a continuation of Current Policies, a New Policies scenario that incorporates commitments made by countries under the Paris Agreement as Nationally Determined Contributions, and a Sustainable Development scenario that would limit future surface warming to well below 2°C. The analysis projects radical differences, between scenarios, in the demand for oil and coal and in the expenditures required to meet this demand. Under the Current Policies scenario, world demand for oil is projected to increase by 27% by the year 2040. In marked contrast, under the New Policies scenario, year 2040 demand for oil is projected to be 12% greater than current levels. If, however, global ambitions to curtail future greenhouse gas emissions were aligned with the Sustainable Development scenario, world demand for oil would decline by an estimated 26% and the demand for coal would drop by 57% over the next 21 years. A year 2040 crude oil price of $137 (2017 $/barrel) is projected under the Current Policies scenario. This price is double the projection for future oil price under the low demand Sustainable Development scenario.
Declining demand under the Sustainable Development scenario would follow implementation of carbon pricing and other policies leading to improved energy efficiencies, fuel switching to low and zero emissions options and widespread electrification of practices within the industry and transportation sectors. Under Sustainable Development, the IEA anticipates a massive transition to electric vehicles such that by 2040 half of the global passenger car fleet would be electric. In addition, the IEA projects a 40% improvement in the fuel efficiency of vehicles propelled by conventional gasoline and diesel fuels.
The IEA projects massive differences in the cost of developing future supplies of oil under the three scenarios. A continuation of current policies will require an investment of over $25 trillion to develop oil and gas supplies over the next 21 years. In contrast, under Sustainable Development, the costs of meeting future demands are cut by almost 50%. This savings in cost equates to 15% of global GDP in 2017.
The IEA estimates that the cost savings with much lower demand for oil would largely offset the necessary investment in renewables, electricity networks and energy efficiencies. Under the Sustainable Development scenario, energy related greenhouse gas emissions would drop by 46% and the United Nations Sustainability Goal of universal access to electricity and clean cooking would be achieved. Improved indoor and outdoor air quality would result in an estimated 3 million fewer early deaths from air pollution.
A recent Stanford University study (Burke, et. al. 2018, Nature. 557:549) modelled the effect various scenarios of future surface warming on global GPD by the end of the century. As is well documented, a continuation of current policies would impose the extreme costs and hardships of unmitigated climate change on future generations. However, if future surface warming were limited to 1.7-1.8°C above pre-industrial temperatures, the scale of damage would be diminished such that global GDP would be 10-20% higher than estimates based on 3-4°C of surface warming.
The net benefits of progressive decarbonization of practices are obvious and the costs of transition can be readily managed through the implementation of carbon pricing and other policies within well designed climate action plans. There is no moral or economic justification for inaction. All that is required is political will to implement effective climate policies among the current generation of decision makers.