With signals President Obama is on the verge of formally joining the landmark Paris climate agreement, an environmental economist is investigating whether the United States can actually afford to hold up its end of the deal.
The rough estimate for the cost of hitting the target ranges from $42 billion to $176 billion every year until 2050, according to Columbia University’s Geoffrey Heal.
Heal assumes that the goal for cutting greenhouse gas emissions will be reached by extensive use of solar power and wind energy, with the cost of energy storage dictating the overall price tag. His calculations, in a report out this month from the National Bureau of Economic Research, also rely on private-sector investment in energy infrastructure.
Hitting the goal will require government policies. Heal suggests a carbon tax and financial incentives for updates to the electric grid as ways to help the government cut emissions by 50 percent.
However, the pathway to achieve economywide reductions of 80 percent or more by 2050 — the ambitious target eyed by the Obama administration and Democratic presidential nominee Hillary Clinton — is more of a challenge, Heal notes.
Getting there will require massive investments, between $3.3 trillion and $7.3 trillion, in new energy generating capacity, energy storage and energy transmission, plus a faster transition to battery electric vehicles and "extensive progress" in replacing the residential and commercial uses of fossil fuels.
The total cost of decarbonizing might be as low as $1.28 trillion or as high as $5.28 trillion, Heal predicts.
Heal’s research led him to suggest a limited use of renewables and increased use of nuclear power might be a cheaper route to meeting the goals of the Paris Agreement.
Heal notes he is not analyzing the policy but investigating in an informal way some of the conditions necessary for transitioning to a largely carbon-free economy over the next three decades.
Obama could confirm his commitment to the Paris deal tomorrow, according to a report from the South China Morning Post. The paper reported the United States and China are preparing to jointly announce their ratification of the deal this week, ahead of the Group of 20 meeting scheduled to take place in China on Sunday and Monday.
White House senior adviser Brian Deese has been in Beijing laying the groundwork for Obama’s upcoming visit and talking to China’s special representative for climate change (ClimateWire, Aug. 24).
The announcement is likely to be made Friday, according to reports.
As the world’s two largest greenhouse gas emitters, China and the United States have pledged to accelerate adoption of the deal.
China committed yesterday to join the United States in accelerating adoption of the Paris climate agreement by year’s end, shunning suggestions that developing countries should strategically delay signing onto the deal.
The Obama administration has indicated it will treat the deal as an executive agreement rather than a treaty and will take steps within the executive branch to adopt it, rather than submit it to the Senate for advice and consent.