Economics Benefit of Green House Gas Reduction

Economists have weighed in on the costs versus the benefits of greenhouse gas reductions.

By reducing the release of greenhouse gases, the world will be spared costs associated with global warming. So, the benefits of reducing greenhouse gas emissions include the cumulative cost of damages avoided.

But if we agree that the damages from continued global warming will eventually become impossible to overcome (e.g. severe loss of the ability to grow food), then the sooner we reduce greenhouse gas emissions, the greater the payback in avoiding damages from an increasingly hotter planet.

What are some of the damages associated with the world heating up?

• Property damage from rising sea levels, more frequent and severe storms, and increased wildfires.
• Agricultural losses as temperature and precipitation patterns reduce agricultural productivity.
• Health and healthcare costs: recent heat waves have been responsible for tens of thousands of deaths.
• Adaptation and mitigation costs: as seas rise, and rainfall and storm intensity increase, infrastructure has to be built to deal with the new realities, when possible.
• Other damages include increased human displacement (one third of Pakistan was recently flooded) and migration (as agriculture fails), and what is called “biodiversity loss” – another way of saying “mass extinction”, which is happening already because of habitat loss.
• Risk of catastrophic feedback warming: the higher the temperature goes the more the risk of runaway feedback developing. As the earth warms, there is more water vapor in the atmosphere, and water vapor is itself a greenhouse gas. As snow and glaciers melt, darker ground absorbs more heat. As the permafrost melts, methane, a much more powerful greenhouse gas than carbon dioxide, is released.

These damages increase with temperature, which in turn increases with greenhouse gas emissions. Most of the “benefits” of greenhouse gas reductions come from reducing these negative costs. But there are additional positive economic benefits as well from reducing fossil fuel burning.

• Currently fossil fuel consumption causes a massive redistribution of income and wealth. ExxonMobil had a pre-tax profit of $70 billion in 2022, and the Saudi oil company, Aramco, made 303 billion pre-tax^[1]. That’s just the profit, total revenue is much higher. Renewables are far more evenly distributed.
• Wind and solar are now actually among the lowest cost way to generate electricity, so every new installation actually saves consumers money over a fossil fuel plant^[2]. This shift in costs is driving free market investment in these technologies far more than mandates.
• Greenhouse gas reductions will employ millions of workers. The International Labor Organization estimates that implementing the Paris Agreement on Climate Change could create a net gain of 18 million jobs by 2030^[3]. Of course, some jobs will be lost but the net is highly positive. As with trade, there must be ways to ease the transition.
• Oil and gas exploration and production cost $6.55 trillion in 2022 alone^[4]. Reducing consumption of these fuels offsets the costs of sustainable energy. $6.55 trillion a year buys a lot of solar panels and windmills, and sun and wind are free.
• Fossil fuels are in addition highly subsidized around the world, with over $1 trillion in explicit subsidies and much more in “implicit” subsidies, such as the costs of health effects of particulate pollution which are not charged to the fuels^[5]. Switching from fossil fuels reduces the cost of these subsidies, explicit and implicit.

Given this list of benefits from reducing greenhouse gas emissions, it is not surprising that many cost/benefit analyses find a strong net positive from reducing them to net zero over some time period^[6].

Economic Costs of GHG Reductions

Energy

So far, we’ve looked at the benefit side of greenhouse gas reductions. The cost side is more complicated, since there are a number of major sources of emissions.

Figure 73: Sources of greenhouse gas emissions, 2017. Some activities release gases such as methane that cause substantially more heat absorption than CO2. Emissions of these other gases are adjusted to the equivalent amount of CO2 (CO2e). Source: Graphic from Climate Watch via Center for Climate and Energy Solutions. CC-BY^[7]  WW194

In the above graphic, the large pie chart shows that the use of fossil fuels in the energy sector is by far the largest contributor to greenhouse gas emissions. The small chart shows that within the energy sector, the largest emissions come from using fossil fuels to generate electricity and for heating.

Fortunately, the news about generating electricity from renewables is amazingly good.

Renewable energy actually is the cheapest power option in most parts of the world today. Prices for renewable energy technologies are dropping rapidly. The cost of electricity from solar power fell by 85 percent between 2010 and 2020. Costs of onshore and offshore wind energy fell by 56 percent and 48 percent respectively.

Falling prices make renewable energy more attractive all around – including to low- and middle-income countries, where most of the additional demand for new electricity will come from. With falling costs, there is a real opportunity for much of the new power supply over the coming years to be provided by low-carbon sources.

According to the UN, cheap electricity from renewable sources could provide 65 percent of the world’s total electricity supply by 2030. It could decarbonize 90 percent of the power sector by 2050, massively cutting carbon emissions and helping to mitigate climate change^[8].

Looking again at the small pie chart that shows sources of emissions within the energy sector, we see that transportation and manufacturing also emit large amounts of greenhouse gases, and that heating also contributes. Both transportation and heating can be electrified while also being made more efficient, which explains the push towards electric vehicles and electric heat pumps for both heating and cooling. In manufacturing, fossil fuels are also used for heating and generating electricity. The electricity can be generated from renewables and so can heat. For example, in the production of primary iron, fossil fuels such as coal are used in blast furnaces to process the ore, but electric arc furnaces can also be used. In fact, iron can be produced (and recycled) by burning hydrogen produced by the electrolysis of water. Hydrogen when burned becomes only water again^[9]. Much of the use of fossil fuels for energy in manufacturing can similarly be converted to electricity. There was a time not that long ago when a US President-to-be was touting the “all electric future” at the behest of General Electric. Well, that’s finally coming true now.

We haven’t quantified the cost of the energy transition yet. Because new renewable energy is cheaper than new fossil fuel generated energy, new power investment is already flowing mostly to solar and wind. The chart below shows the unsubsidized costs of generating electricity when all costs, including construction, cost of capital, and operating costs (including fuel) are considered.

Figure 74: Cost of electricity generated in various ways. Source: Wikipedia illustration^[10] using unsubsidized levelized data from Lazard^[11] WW195

It’s clear that wind and solar are the least expensive way to generate new electricity, and the market has responded. In 2023, roughly $660 billion was spent worldwide on new renewable energy generation versus $108 billion on new fossil fuel fired power plants^[12]. Note that the costs do not include the “external” costs associated with global warming or health effects which apply to fossil fuel plants without scrubbers and CO2 sequestration.  With those costs internalized, the true costs of coal and gas would be much higher[RF1] .

Unfortunately, there are large sunk costs in existing power plants and only the operating costs would be saved by replacing them. Amazingly, even with these sunk costs, it would be cheaper in the US to replace 99% of existing coal fired power plants with wind and solar because the operating costs are so high – without even considering climate or health^[13]. The International Energy Agency (IEA) has modeled what it would take to reach net zero emissions by 2050, we will look at that report in some detail in the cost/benefit section. The model shows that worldwide investment in renewable energy generation will have to increase to $1.3 trillion by 2030 and decline slowly thereafter. For comparison, the world spending on fossil fuel production reached a high of $1.4 trillion in 2014, so it would be hard to argue this represents an increase in spending on energy generation, rather a shift^[14].  Total annual energy sector investment, which includes everything in the small pie chart above, such as electric vehicles, and manufacturing energy use, would have to rise from the current average of $2.3 trillion per year to $5 trillion by 2030 before declining somewhat^[15]. This represents an increase of roughly 1% of modeled global GDP at that time. For comparison, the military budgets of the US, China, and Russia, are over 3% of GDP.

Agriculture and Land Use and Greenhouse Gases

In the big pie chart, roughly one quarter of greenhouse gas emissions fall outside the energy sector. Two of the largest of those are agriculture (11%) and land use changes (6%).  Agriculture also uses energy, but the emissions we’re talking about here come from other sources and processes. The gases emitted include:

• Methane which comes primarily from livestock digestion (known as enteric fermentation) and the way livestock manure is managed. It contributes the most to agricultural emissions of greenhouse gases.
• The second largest contributor is nitrous oxide, which results mostly from agricultural fertilizer application to soils.
• Carbon dioxide emissions come from increased decomposition of plant matter in soils and from converting lands to agricultural uses. Those emissions are partially offset by the increased plant matter stored in cropland soils.

Methane is degraded by reacting with OH in the upper atmosphere and has an average life of about 8 years in the atmosphere, but it is an even more powerful greenhouse gas than CO2. Every methane molecule released now has 28 times the warming power of a CO2 molecule over a 100-year time span, and a much higher short-term warming power.  Nitrous oxide molecules are in the atmosphere for an average of 150 years and have a warming potential 285 times that of CO2. When calculating the contribution of agricultural greenhouse gases, these warming potentials are used to calculate their CO2 equivalent which is what is graphed above. The chart below shows how various agricultural uses contribute to emissions.

Figure 75: Worldwide Greenhouse Gas Emissions from Agriculture, other than CO2. Source: https://cfpub.epa.gov/ghgdata/nonco2/W. WW196

How can these agricultural emissions be reduced, and at what cost?

To have a decent possibility of limiting global warming to 1.5 degree C, the Intergovernmental Panel on Climate Change (IPCC) set the following targets for agriculture, forestry, and land-use change in 2018:

• Eliminate CO2 emissions entirely by 2050.
• Reduce methane (CH4) emissions by 25 to 35 percent by 2030 and by 50 to 60 percent by 2050 (versus 2010 baseline)
• Reduce nitrous oxide (N2 O) emissions by 10 to 15 percent by 2030 and by 20 to 30 percent by 2050 (versus 2010 baseline)

In a report on ways to reduce agricultural emissions, McKinsey and Company notes that achieving these targets:

.. would mean major changes for agriculture, from how we farm, to how we eat and waste food, to how we manage our forests and natural carbon sinks.

Achieving these major changes may be more challenging for agriculture than for other sectors. Although the pace of emissions reduction remains too slow across the board, other sectors have identified many of the technologies that could substantially reduce emissions: these options don’t necessarily exist in agriculture. Agriculture is also significantly less consolidated than other sectors; reducing emissions requires action by one-quarter of the global population. Finally, the agriculture sector has a complicated set of objectives to consider alongside climate goals, including biodiversity, nutrition needs, food security, and the livelihood of farmers and farming communities.^[16]

The report goes on to identify 25 technologies currently in use that could achieve 20% of the target agricultural emissions reductions by 2050. The good news is that many of these changes, such as better rice paddy water management, actually provide cost savings to farmers. The bad news is of course that it’s only 20% of the target, which in itself is less than 25% of agricultural emissions.

Other changes to agriculture will happen for reasons not directly related to greenhouse gas reduction. Land itself, like the ability of the earth to absorb our greenhouse gas waste, has essentially reached its limit. In particular raising animals for meat causes the most greenhouse gas emissions while using 80% of agricultural land and contributing only 20% of the calories people consume. As GDP rises in low- and middle-income countries, their citizens want more meat, which is unsustainable.  We will defer the further discussion of agriculture to the section dealing with land as a limiting factor.

I think it is fair to say that currently we only know how to reduce a portion of agricultural greenhouse gases at a reasonable cost.

Balancing Cost versus Benefits of Reducing Greenhouse Gases

We’ve listed the benefits of reducing greenhouse gases, but only quantified some. It is difficult to put precise numbers on the relationship between greenhouse gas levels and economic damage such as coastal flooding and lost agricultural productivity. The climate models are designed to give us as detailed a geographic and temporal picture as possible of rainfall changes, sea level rise, and of course temperature increases, which one can then attempt to translate into damages. But assigning costs to this putative damage is going to involve a healthy dose of uncertainty.

It is even more difficult to assign a value to human health and mortality. For example, the 2022 heat wave in Europe is calculated to have cost 60,000 lives. What price does one assign to a human life? In the US, when considering technology, it is considered to be worth about $7 million to prevent a death. Multiplying the two, this single heatwave in one part of the world, caused $420 billion in “damage”. But even then, we can’t confidently apportion all of that to climate change.

Finally, there are almost completely unquantifiable “damages”. One is the decline in the numbers of animals and plants of all kinds. The combination of habitat loss and climate change is leading to an increase in species extinction^[17]. How does one “value” a species and how much is related to climate change? Another unquantifiable damage from greenhouse gas emissions is simply what we don’t know, in other words, risk. There are feedback loops that occur as the earth warms: hotter sea water holds less CO2, methane is released as permafrost melts, glaciers slip into the ocean and raise sea levels faster as they are undercut by melt water. These feedback loops are incorporated into climate models as they are discovered and quantified, but there is always the risk of runaway effects we haven’t anticipated. We do know that as long as we emit CO2 and other greenhouse gases at current levels, the world will continue to warm and associated damages will increase. Continuing to emit current levels of CO2 would, within a century, boost CO2 levels to over 750 parts per million and temperatures to around 4°C above pre-industrial levels. The last time those conditions occurred was about 35 million years ago during the Eocene Epoch when the planet was mostly ice-free, which today would cause a sea level rise of 70 meters (210 ft)^[18]. In the US, both Florida and Louisiana have an average elevation of just 31m (100 feet) above sea level, most coastal cities worldwide would be underwater, huge stretches of land would become sea, and enormous population movements would have to occur. Bangladesh, with a population of 170 million, is only an average of 5m above sea level. The purely economic costs of such warming are unimaginably high, let alone the human and environmental costs. And costs would continue to get worse after that. We have to cut emissions, the only questions are when, by how much, and how.

Part of the problem of climate change is the rate at which the earth is warming. If we had a thousand years before New York City and Florida would find themselves 40 meters (120 feet) below sea level, we would have a chance to “mitigate” and “adapt”, but under a business-as-usual scenario, we have at most 100 years. This is far faster than other warming events in earth history^[19]. Current greenhouse gas reduction planning is based on trying to figure out what will happen by 2100 under various scenarios. Translating those scenarios into damages that can be weighed against costs of abatement is subject to huge variability.

Still, everyone loves numbers, even shaky ones, so what follows are some estimates of the damage. 

In “The Cost of Climate Change,” a book published by the Natural Resources Defense Council, the (many) authors conclude that even when meeting current targets:

Global economic damages of climate change are projected to be smaller under warming of 1.5°C than 2°C in 2100 (Warren et al.,2018c). The mean net present value of the costs of damages from warming in 2100 for 1.5°C and. 2°C (including costs associated with climate change-induced market and non-market impacts, impacts due to sea level rise, and impacts associated with large-scale discontinuities) are $54 and $69 trillion, respectively, relative to 1961–1990. ^[20]

The authors note that:

Balancing the costs and benefits of mitigation is challenging because estimating the value of climate change damages depends on multiple parameters whose appropriate values have been debated for decades (for example, the appropriate value of the discount rate) or that are very difficult to quantify (for example, the value of non-market impacts; the economic effects of losses in ecosystem services; and the potential for adaptation, which is dependent on the rate and timing of climate change and on the socio-economic content).

They also note that the possible damage, even from these reduced emissions targets, goes up substantially when the risk of tipping points which would carry us over the targets are considered. The damage expected from global warming of 3°C – 4°C would be hugely higher.

In 2006, a study commissioned by the British government put damages from business-as-usual climate change at an ongoing 5% of global GDP and an updated version of the model used in that report found that business as usual would cause damages of about $1.9 trillion annually by 2100 and cost about 1.8 percent of US GDP^[21].

In the IPCC’s Fifth Assessment Report (2014), they estimated that the global economic impact of a 2.5°C increase in global mean temperature above pre-industrial levels could be between 0.2% and 2.0% of global GDP by 2100^[22]. These economic losses are incomplete, and more likely to be underestimated than overestimated, and of course the higher temperatures associated with business as usual will have higher damages costs.

The administration of US President Barack Obama developed a central-case damage estimate of $50 per ton of carbon dioxide in 2019. With emissions of around 54 gigatons of CO2e per year, that amounts to about $2.7 trillion, or about 2.7% of global GDP.

A 2021 report by Swiss RE, one of the world’s largest reinsurers (they back up consumer facing insurers), says that climate change can be expected to shave 11 percent to 14 percent off global GDP by 2050 compared with growth levels without climate change. That amounts to as much as $23 trillion in reduced annual global economic output worldwide as a result of climate change^[23]. Insurers are already feeling the effects of climate change, their finely honed actuarial models seem to have underestimated the risk.

In May of 2022 the Deloitte Center for Sustainable Progress (DCSP) released a report indicating that if left unchecked climate change could cost the global economy US $178 trillion over the next 50 years, or a 7.6% cut to global gross domestic product (GDP) in the year 2070^[24].

So much for various stabs at quantifying damages. The “benefit” of greenhouse gas emissions reductions lies in avoiding these damages. Greenhouse gas reductions also include the benefits unrelated to climate change as we mentioned earlier including health benefits from reduced fossil fuel pollution which are quite substantial, and job creation.  In 2022, renewable energy jobs reached nearly 14 million and these are “good paying”^[25].

On the flip side of the cost benefit calculation, what would it cost to limit global warming to 1.5°C or 2°C in 2100? Before we look at current estimates it’s worth noting that the costs of reducing emissions have historically come down while the estimates of damages from warming have gone up. We humans are an extremely ingenious lot, and it is guaranteed that science, engineering, and the market will drive down costs. In 2007, the McKinsey Company published an article on the costs per ton of reducing CO2 emissions by using various technologies^[26]. Solar was so expensive it wasn’t even included. Since then, solar panel prices have declined 94% from $4.56 per watt to $0.27 per watt in 2021 dollars^[27]. As a result, solar is now the least expensive way to generate electricity in many cases. That said, industrial policy helped both solar and wind get started and build scale. The Chinese and the Europeans, to their credit and economic gain, invested in solar and wind, while the US cut back on renewable energy research and deployment under Regan^[28].

Keeping in mind the certainty that prices of green technology will come down with time and scale, there are a range of prices for such technologies. One way to quantify these prices is in dollars per ton of CO2 (or rather CO2 equivalent, CO2e) saved over the greenhouse gas emitting technology. For example, a windmill with a 30-year lifetime, costing $3 million to buy and install, and having operational costs of $45,000 per year, would generate electricity for $36 per megawatt hour when all costs, including capital, are considered^[29]. A coal fired power plant releases about a ton of CO2 per megawatt hour, so replacing a coal fired power plant with windmills costs $36 per ton of CO2 not sent up into the atmosphere compared to coal. A fully depreciated coal fired power plants cost $50 per megawatt hour just to operate so it actually pays to replace them with new windmills^[30]. One could also abate the same amount of CO2 using solar for $28 per ton or nuclear costing over $100 per ton in the US (nuclear is much lower cost in some other countries). This is a great way to measure the long-term bang for buck of replacing existing technology and deciding between which green technologies to employ. One can rank technologies from least costly to most costly by the cost per ton of CO2e reduced when all costs are considered.

However, if we’re going to come up with what we will have to spend in the short run to meet emissions targets, we mainly want to consider capital costs, meaning the cost to build or implement a technology, not to run it. In the case of the windmill mentioned above, it would supply about 940 average US households with their electricity so with a capital cost of $3 million, the cost per household would be a onetime $3,191^[31]. Replacing a coal fired power plant would take roughly that investment per household served, after which there would be a huge savings in the cost of electricity since wind is free and coal is not. Of course, the onetime cost could be financed just like a home loan for a swimming pool or a roof replacement and built into the cost of the electricity, which is how we came up with the $36 per megawatt hour. In the US the average retail price of electricity is 14 cents per kilowatt hour, or $140 per megawatt hour. That of course includes the cost of the grid and the profits of the utility.

When put in terms of cost per household, the capital costs of green electricity generation, not just for new power needs, but to replace existing fossil fuel power plants, are both highly affordable and good investments that pay dividends going forward. In fact, as we noted above, the operational costs of coal fired power plants are so high that replacing them actually saves money, even with the capital costs of solar included. Worldwide, power consumption per household is much lower than in the United States, and the capital costs per household are accordingly lower. Developing countries are mostly adding electricity generation capacity using solar, which has the added benefit that it can be installed locally without a long-distance grid.

Once the windmills and solar fields are built, and electric rates potentially go down or stabilize, investment in heat pumps for air conditioning and heating, and electric cars (or plug-in hybrids) for transport, make sense. The greening of the electric supply is affordable, comes with long term cost savings for us consumers, and needs to be done to underpin most other energy related greenhouse gas reductions.

But we digress on our hunt for the total cost of meeting current warming targets of 1.5°C or 2°C.

The most direct first attack on this problem was made by McKinsey and Company in the report I mentioned from 2007. That listed various technologies and interventions and their cost in CO2e reductions per ton using engineering methods. Here is the McKinsey and Company global version of that graph from 2009. These “marginal abatement cost curves” have been used to design various programs to encourage reductions.

Figure 76: Marginal Cost Abatement Curves Source: Exhibit from “Pathways to a low-carbon economy: Version 2 of the global greenhouse gas abatement cost curve”, September 2013, McKinsey & Company, www.mckinsey.com. Copyright (c) 2023 McKinsey & Company. All rights reserved. Reprinted by permission^[32]. WW111

This curve is a wonderful way to illustrate how to reduce emissions using the technology and costs available at the time the graph was created. The vertical axis shows the cost of saving a ton of CO2 or equivalent, and the horizontal axis shows how many gigatons of CO2e could be saved by applying the technology. For example, saving a ton of CO2e by generating electricity using nuclear power would cost about 10 euros per ton (about $13 in 2009) above business as usual and could potentially save about 2.5 gigatons of CO2e per year. If all the actions costing below 60 euros per ton of CO2 saved were taken, 38 gigaton per year of CO2e would be saved, which would be more than half the business-as-usual figure of 70 gigatons. Note that a lot of abatement opportunities save money while reducing emissions. For example, switching incandescent lights to LEDs saves about 85 euros of actual costs to a family or business for every ton of CO2 it removes. The cost of abating all 38 gigatons of CO2e can be found by simply adding up the areas of all the little blocks on the chart since the vertical axis is the cost per ton, and the horizontal axis is the number of tons saved. The cost-saving abatements are subtracted from the ones that have positive costs. 

The authors of the 2009 McKinsey report estimate that if all these actions were taken in the most efficient manner, the additional cost per year worldwide would be $218 to $328 billion in dollars annually by 2030 above business as usual. That includes both depreciation and operating costs. To get to that point we would need to do a lot of upfront investing. The report estimates that $580 billion of additional investment above baseline would be needed per year in 2020 climbing to $885 billion per year in 2030. These are in 2009 dollars, $885 billion in 2009 was worth $1.2 trillion in 2022. Many of these investments would yield long-term energy savings. With worldwide 2022 GDP of $96 trillion we’re talking about very manageable investment costs as a percentage of GDP. It is important to note that this is not the full cost of these investments, just what would have to be spent above what would be spent anyway in a business-as-usual scenario to meet climate goals.

Using this estimate of the expenditures required to limit warming to 1.5 to 2.0 degrees C, the cost/benefit ratio compared to the damages resulting from business-as-usual scenarios looks quite favorable. The costs involved, even during the phase of intensive investment, are about an additional 1 percent of world GDP, compared to the damages of inaction which are several percent of GDP according to the estimates we’ve cited.

That was the engineering view in 2009. In fact, as we have seen, the prices of some key technologies such as solar cells have come down faster than even experts expected and the same would be true for many other technologies if implemented at scale. Remember when a 42-inch HDTV cost $17,457?^[33]

The report goes on to note that timing is important because every gasoline powered car, methane power station, or other carbon emitting investment has an average lifetime of about 14 years. The sooner we invest in green technology the greater the benefits.

A more recent set of abatement curves was included in the International Panel on Climate Change (IPCC)’s 2023 Synthesis Report. In the chart below various types of abatements are shown along with their cost and amount of CO2 equivalent they would keep out of the atmosphere.

Figure 77: Abatement (aka Mitigation) methods, their cost, and amount of CO2 Equivalent reduction. Source: IPCC Data from the 2023 Synthesis Report^[34] WW112

The authors point out that employing mitigation options that cost less than $100 per ton of CO2 equivalent would reduce world emissions to half of the 2019 level by 2030. This gives us an idea of the upper limit for costs to meet mitigation goals: half of 2019’s 54 billion tons of CO2e emissions is 27 billion tons. If all the mitigation options employed cost $100 per ton removed, the net lifetime cost to remove half of them would be $5.4 trillion. A lot of the mitigation options cost less than $100 per ton, in fact some make money, so that is an upper estimate. However, the upfront capital costs would be considerably higher in some cases, such as solar, with the savings following later. Still, with 7 years left until 2030 the investment required seems highly manageable. The same may not be true of other factors though. “Reduce conversion of natural ecosystems” has one of the highest potentials for CO2e reduction, but how do you get there? Politics will play a huge role in determining what gets done and when, even for reductions that have free market economics in their favor.

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^[1] https://www.statista.com/statistics/269857/most-profitable-companies-worldwide/

^[2] https://ourworldindata.org/grapher/levelized-cost-of-energy?time=2000..latest based on International Renewable Energy Agency (IRENA) data.

^[3] https://www.ilo.org/global/topics/green-jobs/lang–en/index.htm

^[4] https://www.ibisworld.com/global/market-size/global-oil-gas-exploration-production/#:~:text=The%20market%20size%2C%20measured%20by,is%20%245.3tr%20in%202023.

^[5] The IMF sized explicit fossil fuel subsidies at $1.3 trillion in 2022 and implicit subsidies at an additional $5.7 trillion. But the latter include environmental damages we’ve already listed as benefits of greenhouse gas emissions. https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel-subsidies-surged-to-record-7-trillion

^[6] A review of literature can be found at https://eciu.net/analysis/briefings/climate-impacts/climate-economics-costs-and-benefits.

^[7] https://www.c2es.org/content/international-emissions/#:~:text=Globally%2C%20the%20primary%20sources%20of,72%20percent%20of%20all%20emissions. Climate Watch has some great graphics and tools.

^[8] https://www.un.org/en/climatechange/raising-ambition/renewable-energy#:~:text=Cheap%20electricity%20from%20renewable%20sources,helping%20to%20mitigate%20climate%20change.

^[9] https://energypost.eu/iron-and-steel-how-can-hydrogen-and-direct-electrification-take-over-from-fossil-based-production/#:~:text=The%20Direct%20Reduced%20Iron%E2%80%93Electric,iron%20for%20further%20steel%20production.

^[10] By Mir-445511 – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=137272269

^[11] https://www.lazard.com/research-insights/2023-levelized-cost-of-energyplus/. These figures agree with those in the IEA net zero document, https://www.iea.org/reports/net-zero-by-2050, Table B1 which shows the costs for the US, EU, India, etc. in 2020.

^[12] https://www.iea.org/reports/world-energy-investment-2023/overview-and-key-findings

^[13] https://energyinnovation.org/wp-content/uploads/2023/01/Coal-Cost-Crossover-3.0.pdf. The authors point out that in addition to cost savings, there would be large local capital investments made and since the power is generated locally, transmission issues are reduced.

^[14] All dollar figures in the report are constant 2021 US dollars. Total green energy, which includes nuclear as well as renewables, would have to rise to $1.6 trillion by 2030. “Net Zero by 2050.” n.d. IEA. Accessed September 21, 2023. https://www.iea.org/reports/net-zero-by-2050. Page 153 ff

^[15] https://www.iea.org/reports/net-zero-by-2050 page 47. Note that this includes the cost of increasing the availability of electricity in poorer countries, so increased generation and consumption.

^[16] The report is available at https://www.mckinsey.com/~/media/mckinsey/industries/agriculture/our%20insights/reducing%20agriculture%20emissions%20through%20improved%20farming%20practices/agriculture-and-climate-change.pdf.

^[17] The rate of species extinctions has increased 1,000 – 10,000 times “background” according to some estimates, but much of that is due to habitat loss. Rapid climate change (in a period of say, 2 million years) has certainly been a factor in mass extinctions in the past, but we’re not there yet. See https://www.forbes.com/sites/grrlscientist/2023/07/19/modern-sixth-mass-extinction-event-will-be-worse-than-first-predicted/?sh=2b3fe2ad4ab6 and https://ourworldindata.org/mass-extinctions

^[18] Stern, Nicholas. 2013. “The Structure of Economic Modeling of the Potential Impacts of Climate Change: Grafting Gross Underestimation of Risk onto Already Narrow Science Models.” Journal of Economic Literature 51 (3): 838–59.

^[19] If CO2 releases continue at current rates we will warm as much in a couple of hundred years as the earth cooled over the last 50 million. See Also see https://earth.org/data_visualization/a-brief-history-of-co2/.

^[20] Page 264 (chapter 3) of “Impacts of 1.5°C of Global Warming on Natural and Human Systems” available at https://www.ipcc.ch/site/assets/uploads/sites/2/2019/05/SR15_Chapter3_Low_Res.pdf

^[21] https://en.wikipedia.org/wiki/Stern_Review and https://www.nrdc.org/sites/default/files/cost.pdf

^[22] P79 Report available at https://www.ipcc.ch/site/assets/uploads/2018/05/SYR_AR5_FINAL_full_wcover.pdf.

^[23] https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe-risk/expertise-publication-economics-of-climate-change.html

^[24] https://www.deloitte.com/global/en/about/press-room/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-world-economy-us-dollar-178-trillion-by-2070.html#:~:text=Deloitte’s%20Global%20Turning%20Point%20Report,a%20systemic%20net%2Dzero%20transition.

^[25] https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_895440/lang–en/index.htm

^[26] A cost curve for greenhouse gas reduction

^[27] This is the panel price; the installed price is higher but has declined over 80% for commercial installations. Panel prices from https://ourworldindata.org/grapher/solar-pv-prices, installed prices can be found in Just The Facts: The Cost Of Solar Has Fallen More Quickly Than Experts Predicted – CleanTechnica

^[28] Just The Facts: The Cost of Solar Has Fallen More Quickly Than Experts Predicted – CleanTechnica

^[29] This is the levelized cost of electricity for new land based windmills per https://www.eia.gov/outlooks/aeo/electricity_generation/pdf/AEO2023_LCOE_report.pdf with the $5.5/MWH IRA credit added back in.

^[30] https://www.lazard.com/media/2ozoovyg/lazards-lcoeplus-april-2023.pdf

^[31] Output calculation includes the fact that windmills only run at 42% of capacity on average. Details at https://www.usgs.gov/faqs/how-many-homes-can-average-wind-turbine-power#:~:text=At%20a%2042%25%20capacity%20factor,than%20940%20average%20U.S.%20homes.

^[32] This paper is an excellent way to get familiar with the overall scope and needed actions to reduce warming to targeted levels. Available at https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/sustainability/cost%20curve%20pdfs/pathways_lowcarbon_economy_version2.ashx

^[33] 2001 Fujitsu Plasmavision 42-inch PDS4221 (RRP $17,457)

^[34] Data from IPCC, 2023: Summary for Policymakers. In: Climate Change 2023: Synthesis Report. A Report of the Intergovernmental Panel on Climate Change. Contribution of Working Groups I, II and III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, H. Lee and J. Romero (eds.)]. IPCC, Geneva, Switzerland, (in press). CC BY 4

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