Three of America’s bluest-chip capitalists are again urging the country to seize the profit opportunities represented by shifting its economy off fossil fuels, predicting a potential US$1.5 trillion payoff by mid-century if it does.
Founded by ex-New York City mayor Michael R. Bloomberg, former Goldman Sachs CEO and U.S. Treasury Secretary Henry M. Paulson, Jr., and billionaire hedge fund manager Thomas F. Steyer, the Risky Business Project has issued a series of reports detailing the potential losses the American economy faces if global warming continues unchecked. Its latest report, issued in mid-December, details four possible paths to reducing greenhouse emissions across “all major economies” by 80% by 2050.
“We find that this goal is technically and economically achievable using commercial or near-commercial technology,” the project’s researchers conclude. “Meeting the goal does not require an energy miracle or unprecedented spending.”
“Notably,” the report underlines, “shifting the U.S. to a low-carbon, clean energy system presents not just long-term benefits but also immediate, near-term opportunities, particularly for those actors best positioned to capitalize on these trends. Because of the large capital investments and the long-term savings in fuel costs, this shift presents significant opportunities for many American investors and businesses.
The project modeled four development scenarios. One relied heavily on renewable energy, a second on nuclear power. Another included “a substantial amount of fossil fuel power plants with carbon capture and storage.” In the fourth, the U.S. would “generate electricity from a relatively even mix of these three zero- and low-carbon resources.”
The report doesn’t endorse one course over another, but its executive summary finds that the “all of the above” Mixed Resource pathway in the U.S. would require economy-wide investments of US$1.9 trillion by 2050. Escalating returns from energy savings and avoided costs would reduce the net outlay.
That means the Mixed Resource pathway would require annual investments of $220 billion in the 2020s and $410 billion in the 2030s, against benefits of $70 billion and $370 billion per year in each of those decades. By the 2040s, the group calculates, annual returns to the U.S. of $700 billion would be nearly twice the ongoing investment need of $360 billion.
“Meeting these targets requires a large-scale shift away from ongoing spending on fossil fuels and toward up-front capital investments in clean energy technologies,” the report observes. “Many of those, such as wind and solar, have little or no fuel cost once built. Given an appropriate policy framework, we expect these investments to be made largely by the private sector and consumers, and to yield significant returns.”
The report found endorsement and echoes in Canada. “What Paulson and sensible Canadian politicians—including Conservatives such as Preston Manning and Michael Chong—understand is that the world must become less reliant on carbon fuels or it faces both environmental and economic ruin,” the Toronto Star notes. “Using the power of our economy, we can protect our environment.”
For his part, veteran Canadian energy modeller and The Energy Mix subscriber Ralph Torrie notes that the David Suzuki Foundation paid for a 2000 study in which he determined that much the same was possible in Canada. “I concluded that Canada could reduce its greenhouse gas emissions by half by 2030, using existing technology, with annual energy savings for industry and consumers of $30 billion by 2030, and many other collateral benefits,” Torrie recalls.
“This latest report from the U.S. goes so much further in lighting the way forward, detailing the investments needed (quite manageable), and the financial, social, and environmental benefits of low-carbon futures. It makes the status quo look bad.”