Doyne Farmer & Cameron Hepburn
How the transition to clean energy could save the world $12 trillion
Investment in renewable energy has been held back for decades by financial modelling that suggested that switching from fossil fuels to clean energy would be unfeasibly expensive.
However, a recent study from the Oxford Martin School has identified significant flaws in those earlier forecasts. Based on new modelling informed by more recent data, the study predicts that a transition to a nearly 100% clean energy system by around 2050 would bring economic benefits of approximately $12 trillion globally.
Professor J. Doyne Farmer explains that previous statistical models have overestimated the cost of investing in new clean technology by ignoring the reduction in the costs of technologies such as solar once they start to be deployed at scale. The study’s ‘Fast Transition’ scenario shows how a realistic, near fossil-free future would provide 55% more energy services globally than today, thanks to cost reductions across key green energy technologies: wind, solar, batteries, electric vehicles, and clean fuels such as green hydrogen.
His colleague, Professor Cameron Hepburn explains how this report will change assumptions around the cost of investing in clean energy, accelerating the transition from fossil fuels, which currently account for some 75% of GHG emissions, to cheaper, cleaner, and more energy-secure alternatives.
With thanks to:
Professor J. Doyne Farmer, Director of Complexity Economics at INET Oxford, Oxford Martin School
Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, University of Oxford.