November 21 2024

Going all renewable and electric could save U$ 4 trillion per year

World could save U$ 4 trillion per year by going all renewable and electric

The energy transition is inevitable. Renewable electricity from wind and solar is now the cheapest form of energy humanity ever had at its disposal.

Electronic technology – for transport, heating, manufacturing – is much more efficient, cheaper and simpler compared to fossil-powered counterparts.
It is pure economic (renewable electricity is cheaper than oil) and efficiency considerations (electronic machines use far less energy than fossil machines).

Modelling & forecast based on user demand instead od supply considerations

There is a big difference between the energy that we consume, and the energy that we actually use. When driving a car, most of the energy contained in the gasoline is lost as heat. So what we consume is the energy contained in gasoline, but what we actually use – the transport – is only about 22% of the energy that we consume. This is governed by laws of thermo-physics and cannot be improved. It can be improved, however, with different technology: an electric motor has a theoretical energy conversion of 100%, so the energy we consume is almost equal to the energy we use. Switching to electric therefore saves a lot of energy – and with that, money.

The energy transition is now inevitable.

Modelling future energy demand and supply by extrapolating historic trends shows that there will be enough renewable electricity to replace all fossil energy by 2055 – even without climate related policies.

That is the good news. The bad news is – it is not fast enough in the face of accelerating global warming and the associated heat waves, droughts, wildfires, storms and flooding we are now seeing around the globe.

The full report and modelling analysis is available here: Energy Transition Saving 4 Trillions per Year

The four scenarios used in this energy transition modelling

Energy transition scenarios and modelling

A full global transition to renewable energy would cost approximately U$ 53 trillion. The funds for these investments could be raised simply, in three different ways:

Pricing climate emissions, progressively increasing (e.g. starting at U$ 100/tCO2e, increasing by U$ 100 every year, or U$ 150/200). For more information on carbpon or climate pricing, please read here.
Taxing the super-rich (e.g. taxing the income/wealth of the Top 1% at 10%)
Have the central banks loaning the necessary funds (given that they would immediately be re-invested in economic activities, there will be no adverse impact on inflation)
A combination of the above

Investments and cost savings:

Renewable annual cost savings vs business as usual

Cost savings of U$ 75 trillion by 2050

Because renewable energy is cheaper and electric motors and appliances more efficient than combustion engines, going all renewable and electric would have significant cost impacts for the global economy: the savings potential is more than U$ 4 trillion per year. Accumulated, this amounts to more than U$ 75 trillion by 2050.
The faster the investments are made, the higher the financial benefits will be. For more information, download the full modelling report here.

CO2 emissions:

Global energy prices renewable energy in comparision to fossil energy

Net-Zero could be reached in 10 years

Even in a business-as-usual scenario, energy-related CO2 emissions will be eliminated by 2055. Unfortunatelly, that is not fast enough to save humanity from extinction.

By applying a stringent carbon fee with a 50% cash-back element, net-zero could be reached within 10 years. However, this would require global co-ordination and political willingness, both of which appear a remote possibility at the moment.

That is the good news. The bad news is – it is not fast enough in the face of rapidly accelerating global warming and the associated heat waves, droughts, wildfires, storms and flooding we are now seeing around the globe. We are allready seeing feedback loops in full swing – so only the most radical plans are good enough.

We are painfully aware that implementing any of these scenarios would require political courage and willignes as well as global co-ordination, all of which seems nowhere to be detectable at this very moment.

For more information on how radical rationality could solve the probllem of climate change, download the full report here: Energy Transition Saving 4 Trillions per Year

The climate feed-back loops already in play:

June 9 2024

Phasing out fossil energy in 10 years

All renewable in 10 years

Ending fossil energy in 10 years.
Reducing the global energy bill by 50%.
Increasing power purchasing parity of the lower 50%.

Good for the Planet. Good for the Economy. Good for the People.

The Global Climate Tax Scheme:

We price CO2, in every country, at the same rate globally, at the point of final sale (of fuels, gas, coal), like a VAT.
The climate tax starts at U$ 100 per ton of CO2 equivalent, increasing by U$100 every year, to give the economy time to adapt
The climate tax is levied, managed and redistributed at the national level
50% of the climate tax revenues are directly re-distributed to the people, in cash, equally per person. More than 50% of the population will have more cash in their hands (even accounting for rising costs), boosting local businesses and the economy
40% invested in the renewable infrastructure – electricity generation, grids, storage, public transport, and the replacement of fossil-fuelled equipment
3% for reforestation, mitigation, and adaption
7% in a global fund in support of the lesser developed and most affected countries

No more oil, gas, coal.

A global climate tax, 50% re-invested in renewable energy infrastructure (generation, transmission, storage, appliances) generates sufficient revenues to replace all fossil energy demand within 10 years. Given that the markets will react to public policies, this target could potentially be achieved even earlier.

The future global energy mix, based on a global climate tax:

“Primary energy consumption” refers to the total energy usage, including losses. Because electric appliances are much more efficient that combustion appliances (e.g. fossil fuel car efficiency grade: 20-25%, EV efficiency grade:80-90%), electrification of the energy will significantly drop primary energy demand.Text content

The simulation is based on least-cost technologies, currently wind and solar PV. Future technological developments could potentially increase the share of utility-scale geothermal and tidal/wave electricity generation.

For more details on the simulation, read the Global Climate Tax Report.

Climate emissions from energy usage:

Emission reduction potential with carbon pricing

Global GHG emissions under different climate tax levels (starting at U$50/tCO2e, increasing U$50 annually; U$100 increasing U$100 annually; U$200, increasing U$150 annually), and business-as-usual.

The pace of the de-carbonisation depends on the level of taxes levied on climate emissions. Simulation of different tax levels and their impacts on energy transition, the economy and the people indicates that an initial tax of U$100/tCO2e in creasing by U$100 every year, seems to be the most promising way, replacing fossil fuels after roughly ten years.

Good for the Economy

Renewable energy is now cheaper than fossil energy, and rapid deploymenet will make renewable electricity even cheaper. However, introducing a climate tax will lead to higher energy costs for a short period of time before the higher efficiency and lower cost of renewables drives global energy costs down to less than 50% of current energy cost:

Global energy costs as percent of global GNI under different climate tax levels (starting at U$50/tCO2e, increasing U$50 annually; U$100 increasing U$100 annually; U$200, increasing U$150 annually).

Setting the climate tax per ton of CO2 too high might have a shock impact on the global economy. The simulation shows that a climate tax at U$100/tCO2, and then increasing the rate by U$100 every year, seems the most feasible climate tax level.

However – because the climate tax revenues are directly re-invested into the economy, the overall global economic impact of the climate tax is positive. The additional investment through building a renewable energy infrastructure and the cash-back going into local economies more than offsets the initial higher energy cost.

Climate Tax: Global energy cost and investment impact

The initally rising energy costs are off-set by climate cash-back and investments in the enewable infrastructure. The net impacts of a global climate tax would be economically positive, right from the the initial stage.

Good for the People

Rich people consume more than poor people, including services (heating/cooling, road transport, flying) that consume energy. The more a person consumes, the higher the taxes paid. Vice-versa, for poorer people that consume less energy, the tax burden is smaller.

When the tax revenues are re-distributed per capita, nearly 60% of the population will have more disposable income in their hands than before the climate tax – boosting local businesses and the local economy.

Income change by income group due to the climate tax

Income changes for different income brackets based on a climate tax starting at U$100/tCO2, accounting for increased energy costs and per-capita cash-back. This graph is calculated based on global averages. A break-down by country level is available.

Generally speaking, the income changes for the lower 50% income brackets is higher the lower the current GNI of a country is.

The additional income generated by the climate tax cash-back benefits local small businesses and the local economies.

More details, including detailed simulations of the globally co-ordinated fossile tax can be found here.

What’s at stake

In one word: everything.

Since May 4th, 2023, the ocean temperature has set new records, every single day.

Sea surface temperatures have set daily ecord since May 2023. 71% of our Plant’s surface is water. What happens on the seas happens on land. Data by Copernicus

2023 laready has passed the 2050 goal of staying below 1.5 degrees of warming. The running average of global land temperatures (2m above ground) since May 2023 is more than 1.6 degrees above pre-industrial levels, and we see what is happening: heat, droughts, wild-fires, rain bombs, hail, monster storms, flooding. It is only a question of possibly very short time before we see reduced crop harvests, nearly everywhere, that will only accelerate in the future. Without sufficient food, there is no stable society.

Politics

We have all the technology, the financial means, and the political tools (taxes!) which are needed to transition to a renewable economy.

Unfortunatelly – there is no sign anywhere of a workable plan to make the energy transition happen. Implementing a global climate tax would require governments to come together, to agree, and to implement a common policy. Globally. That is currently not the case.

In order to give us a fighting chance, we need pressure bottom-up (the people) and top-down (businesses) on governments to act on our behalf.

Climate Chnage