For $1.24 trillion — an amount less than the annual gross product of New York City — the entire United States could transition 100 percent of its energy grid to renewable power sources and end use of fossil fuels.
That projection is based on new calculations from environmental economist Geoffrey Heal, the Business School’s Donald C. Waite III Professor of Social Enterprise, who laid out his findings during the third annual Climate Science and Investment Conference, hosted by the Tamer Center for Social Enterprise and the Lamont-Doherty Earth Observatory. Gathering representatives from the worlds of business and science to discuss the role investors can play in combating climate change, the assembly of science and business leaders cast an optimistic light on the energy sector’s growing role in reducing CO2 emissions but also underscored the imperative for the energy revolution to happen quickly.
Heal previously published a study on this subject for the Review of Environmental Economics and Policy. Based on updated figures, he projected the United States could end use of petroleum, natural gas, and coal if the country invested $950 billion in renewable energy capacity, $120 billion in transmission infrastructure, and $2.19 trillion for storage capacity. Those investments would be offset by $960 billion in fuel savings plus another $1.06 trillion for the estimated costs of replacing outdated fossil fuel plants. Breaking the numbers down further, the United States would be carbon free by 2050 if it invested $41 billion per year in renewable energy, which is roughly what the United States currently spends on energy-related capital investments in energy, said Heal.
Time is of the essence as the speed of the energy transition will determine if the world averts catastrophic climate change, according to Kate Marvel of NASA’s Goddard Institute for Space Studies. She warned that even if the world stopped emitting CO2 today it would still see warming weather because of all the pollution over the past century. The only question is how much the world will warm, and whether it is 1.5 degrees C — which will be bad — or 2 degrees C and beyond, which will be unimaginably bad.
“We can’t really prevent climate change, it’s already here,” Marvel said at the conference, which was held at the headquarters of BlackRock, the world’s largest asset manager. “Climate change is not a cliff, it’s a slope, and it’s a slope that we’ve chosen to roll down. But we can always choose to begin that climb up.”
Progress is already happening, noted Professor of Practice Bruce Usher, the Elizabeth B. Strickler ’86 and Mark T. Gallogly ’86 Faculty Director of the Tamer Center. Texas’s grid this year became primarily powered through wind and solar, while a Florida utility recently announced it would build the world’s largest battery system and power it with solar. Globally, the world is on pace for two-thirds of its energy supply to come from renewables by 2050, which will reduce global emissions by as much as 58 percent.
“This is the first opportunity we have to actually dramatically reduce greenhouse gas emissions,” said Usher, author of the new book Renewable Energy: A Primer for the Twenty-First Century.
Across the business world, companies are preparing for climate change. The latest Harvard Business Review highlighted how companies are voluntarily curbing carbon emissions and looking for ways to tackle climate change. More than ever, investors are keen on renewable energy and looking for opportunities in the sector, according to David Giordano, a managing director at BlackRock.
“It’s not from investors necessarily mission-driven,” Giordano said. “It’s also from folks looking to de-risk their portfolios, to mitigate their exposures in other places to climate change.”
A primary driver for the energy transition is the fact that renewable energy is now cheaper than fossil fuels. Giordano predicted that declining costs “will make wind and solar the dominant source of new power generation coming onto the grid for the foreseeable future.”
The electric car market is also driving the energy revolution. Demand for electric vehicle batteries recently surpassed global demand for all other uses, which is spurring further research and investment in battery storage capacity that could translate into improved capabilities for wind and solar. (Because wind and solar are intermittent sources of power, i.e. when it’s sunny or windy, batteries must store the energy for use.)
Hundreds of electric car models are today on the market, and startups like ChargePoint are leading the infrastructure rollout for car-charging stations. ChargePoint recently secured a $240 million funding round from investors including oil firm Chevron and car company Daimler, highlighting the wide support for electric vehicles. One of ChargePoint’s earliest investors was the venture capital firm Braemar Energy Ventures, which focuses on the energy technology sector.
“We see a lot of innovations in terms of software and sensing technology coming to this area that will really enable [electric vehicle infrastructure] to become robust, cheaper, and easier to launch,” Braemar senior partner Jiang Ma said at the conference.
No conversation about electric cars can leave out China, which purchased twice as many electric vehicles as did the United States in 2017. David Sandalow, co-director of the energy and environment concentration at Columbia University’s School of International and Public Affairs, predicted that China will remain a leader in the sector because Beijing’s government is committed to building out electric vehicle charging infrastructure as a social benefit to the population.
While policymakers have in the past argued that CO2 emissions were necessary for economic growth, the emergence of affordable renewable energy has decoupled economic development from environmental pollution, said Peter deMenocal of Columbia University’s Department of Earth and Environmental Sciences. Economic growth and environmental health are now compatible, depending only on the right investment.
“While it might be true in movies that scientists are the heroes that save the planet, actually it’s not us,” deMenocal said. He pointed to the room of business people and said, “You are the heroes of this story. You are the ones that will be leading the investments that will make this change, radically increasing renewables and storage, radically increasing efficiency, electrifying everything.”
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About the researcher
Bruce Usher is a Professor of Practice and the Elizabeth B. Strickler '86 and Mark T. Gallogly '86 Faculty Director of the Tamer Center for Social...Read more.
About the researcher
Geoffrey Heal, Donald C. Waite III Professor of Social Enterprise at Columbia Business School, is noted for contributions to economic theory and resource and...Read more.