The costs of switching to a low-carbon economy are less than the costs that will be felt if more efforts are not made to curb climate change, according to a new report by Statkraft.
The Norwegian energy company said in its ‘Low Emissions Scenario 2019’ analysis that costs of renewables are also likely to “fall sharply over the next few decades”.
Statkraft said it develops a low emissions scenario each year analysing developments in the global energy markets, with this year’s report looking at what is required for Europe to follow a path that keeps global temperature rises to 1.5 degrees Celsius instead of 2 degrees.
“A surprising finding in the report is the relatively small cost difference when steering towards 1.5 degrees instead of a 2 degrees pathway,” Statkraft said.
“If we aim for 1.5 degrees, the energy system costs will be well below 1% of European GDP in 2050,” it said, adding that globally, several experts have estimated the cost of a 2 to 3 degrees warming by 2100 to be between 5% and 10% of global GDP.
Statkraft said it had also adjusted cost estimates downwards for solar power.
In the Low Emissions Scenario, global solar power capacity increases by 30 times to 2050, and the power sector will become 80% renewable during the same period.
At the same time, this means that natural gas becomes the largest source of greenhouse gas emissions, the company said.
Renewables will be increasingly attractive as a source of energy in transport, buildings and industry, resulting in energy-related greenhouse gas emissions falling by 44% by 2050, which is in line with a 2-degree pathway, Statkraft said.
Statkraft head of strategy and analysis Henrik Nissen Saetness said: “If the energy markets are to succeed within 1.5 degrees, this requires much swifter action, and measures must be implemented earlier than planned.
“Our analysis shows that a 1.5-degree pathway is achievable, but it is urgent, and it will require considerable efforts from politicians and businesses.”