Opinion

America’s Costs of Delay on Climate Change: $3.5 Trillion From Another Decade of Inaction

When President Joe Biden signed multiple climate executive orders on Jan. 27, he said, “We’ve already waited too long to deal with this climate crisis…we can’t wait any longer.”

He is right – we can’t afford to further delay decarbonization. Now we know the costs of delay on climate change.

New modeling shows waiting until 2030 to enact policies putting the United States on a pathway to net-zero emissions by 2050 will make the cost of a clean energy transition nearly three-quarters more expensive than enacting these same policies in 2021. This only includes energy system costs – not the billions America spends every year recovering from extreme weather.

Climate change consequences already locked in will persist for hundreds of years, but the time left to avoid an unacceptably dangerous climate future is fleeting – less than a decade. If we start now and make steady progress, we can build a strong clean energy economy and secure a safe climate future. But if we delay decarbonization even 10 more years, we risk billions in stranded assets and prohibitively high transition costs.

Energy Innovation used the peer-reviewed and open-source Energy Policy Simulator to model two illustrative U.S. climate policy scenarios for reaching net-zero cumulative emissions by 2050. The Energy Policy Simulator uses government data to model the impacts of climate policies on emissions, the economy, technology deployment, health and jobs.

The net zero by 2050 modeling aligns with international scientific recommendations to limit global warming to 1.5 degrees Celsius and avoid the worst impacts of climate change, and the two scenarios modeled effects of starting climate action in 2021 or delaying until 2030.

The resulting differences in cost and pace of our requisite clean energy transition is remarkable. The net present value of the 2030 Scenario changes in cumulative capital, operational and fuel expenditures is 72 percent higher than the 2021 Scenario, assuming a 3 percent discount rate – about $3.5 trillion total.

Implementing climate policies in 2021 that put America on a pathway to net zero by 2050 would require investing roughly $320 billion in 2035. But waiting until 2030 to enact net-zero policies inflates that price tag to nearly $750 billion by 2035, and more than $900 billion between 2040 and 2045.

Delaying also would require far faster clean energy deployment. Without new policies, wind and solar deployment would be about 20 gigawatts of capacity by 2030. Starting on a net-zero emissions path in 2021 slowly ramps up renewables deployment to about 100 gigawatts of capacity annually in 2030. Waiting until 2030 to enact net-zero policy would immediately require six times the annual business-as-usual renewables installations that year, and nine times that amount by the mid-2030s.

This power sector transformation is possible using commercially available technologies like renewables, energy storage, nuclear and existing gas plants – if we start now. Detailed studies released in 2020 from the University of California-Berkeley and Vibrant Clean Energy found the United States could achieve a coal-free, majority-renewables grid without sacrificing reliability or increasing consumer costs.

Phasing out coal by 2030 would kick-start the net-zero transition and only require two to three times the historical deployment of wind, solar and storage, depending on how fast we electrify our vehicles and buildings – slightly more than the rate of gas plant additions in the 2000s.

But delaying action risks building years’ worth of new fossil fuel resources that become stranded assets in a net-zero future. If we continue building fossil-fueled power plants, we risk an economic shock when they must be retired early to avoid dangerous climate change. Delaying climate policies that provide a just transition for workers and communities depending on fossil fuels also risks their opportunity to prosper from the clean energy transition.

The same is true on transportation, buildings and industry. Fuel economy and electric vehicle sales standards can decarbonize our vehicles. Efficiency improvements and electric appliances can clean up our homes and offices. Switching to electricity or zero-carbon fuels such as hydrogen, combined with carbon capture and sequestration, can cut factory emissions. But these transitions won’t happen quickly without new policies, and each year we wait to start decarbonizing these sectors inflates the price tag to replace polluting equipment with clean technologies.

Global atmospheric greenhouse gas concentrations are higher than any other point in human history, and large-scale removal technology does not yet exist. The math of historical emissions accumulation gives us no choice other than slashing emissions to nearly zero as fast as possible. We’ve already incurred $1.9 trillion in damage from extreme weather since 1980, and because climate change impacts lag 10-20 years behind emissions, we haven’t even felt the full impact of what’s coming.

These are the physics of climate change, and the physics are inescapable. Addressing climate change is like stopping a speeding car to avoid an accident – the longer we wait to slow down, the harder we must slam on the brakes and the higher the risk of crashing.

Biden has laid out America’s most ambitious federal climate action agenda, and our federal government must start implementing meaningful climate action as soon as possible. Even conservative politicians can admit that acting early to transition our economy and protect our communities is smarter than paying trillions more down the road.

We know how to hit net zero, and we have the requisite technologies – all we need now is the political will. What are we waiting for?

 

Silvio Marcacci is communications director at Energy Innovation, a nonpartisan climate policy think tank, and has more than 15 years of experience in clean energy and climate policy.

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