The big business of climate change

To seriously tackle climate change, greenhouse gas emissions need to be reduced by at least 80 percent by 2050, according to a new report from the Risky Business Project, a nonpartisan research initiative launched in 2013 by Michael Bloomberg, Henry Paulson, and Thomas Steyer. 

Lead author is Tim Duane, a UC Santa Cruz professor of environmental studies and a practicing attorney. Co-authors include Jonathan Koomey of Stanford University and World Resources Institute researchers Kathy Belyeu and Karl Hausker.

The report, "From Risk to Return: Investing in a Clean Energy Economy," finds that reducing greenhouse gases does not require an energy miracle or any unprecedented spending—but it does require a significant shift in investment patterns.

The solution is already here: a switch to clean energy while electrifying transportation and improving energy efficiency in buildings and industry.

Duane is considered a leading expert on “greening the grid” and the regulatory permitting challenges of renewable energy development. With more than three decades of professional experience in energy, climate, land use, natural resources, water, and environmental policy, planning, and law, he began working in the renewable energy industry in 1979 and published his first reports discussing climate change in 1990.  He has advised public agencies, non-governmental organizations, and private corporations.

A transition to clean energy would benefit not just the environment but also the economy at large. By 2030, 1 million new jobs would be created. The savings of reduced or eliminated fossil fuel costs would also grow significantly every decade so that by 2040, $700 billion per year could be saved. The utility sector could also see long-term growth, and transportation could be transformed through electric and energy-efficient cars.

The capital investment required from the private sector is $220 billion per year from 2020 to 2030, with costs climbing to $410 billion per year from 2030 to 2040 and $360 billion per year from 2040 to 2050. The report also outlines challenges for industries currently benefiting from a fossil-fuel economy: coal mining, and oil and gas-related jobs could face job losses.

The authors say this level of investment is comparable to other historic and necessary investments, like building roads and recent investment in computers and software. Since 1994, investments in communications equipment and infrastructure is more than $2 trillion. When put into this context, the cost for a clean energy switch is not beyond what is feasible.

This investment is also necessary if U.S. businesses want to remain competitive on a national and global level, the report says.

Without large-scale investments, the economic impacts of climate change will be devastating. These investments would be less compared with the costs brought on by failing to respond to climate change and fossil fuel dependence.

In response to the report, Donna Shalala, president of the Clinton Foundation and a member of the Risk Committee, remarks “Climate change presents systemic risks to our economy, to public health, and particularly to our most vulnerable communities. Now we outline a way forward—we can achieve a clean energy economy that reduces these risks and increases prosperity, health, and resilience.”