A new report claims policies to keep future global warming to internationally agreed upon limits by the end of the century could make the world $19 trillion richer.
The report by the International Renewable Energy Agency (IRENA) was one of two commissioned by the German government to help convince President Donald Trump to stay in the Paris agreement.
If IRENA’s top-line findings sound too good to be true, that’s because they might be. The world would have to put $145 trillion into low-carbon energy to become $19 trillion richer by 2050 — a 13 percent return on investment over 33 years.
IRENA says $145 trillion would be needed to limits global warming to less than 2 degrees Celsius above pre-industrial levels by 2100. Even so, IRENA admits its plan only has a 66 percent chance of success.
Moreover, IRENA found that while 20 percent of the $19 trillion in economic benefits from more low-carbon energy “without consideration of welfare benefits,” 80 percent of the benefits were not.
Why is that significant?
IRENA is saying its plan to get about 70 percent of global energy from low-carbon energy by 2050 and double energy efficiency relies on taxes or fees on carbon dioxide emissions. Those taxes would also require “recycling” policies to offset higher energy cost for poor families.
“Increased economic growth is driven by the investment stimulus and by enhanced pro-growth policies, in particular the use of carbon pricing and recycling of proceeds to lower income taxes,” IRENA found.
“The energy sector (including energy efficiency) will create around six million additional jobs in 2050,” IRENA found. “Job losses in fossil fuel industry would be fully offset by new jobs in renewables, with more jobs being created by energy efficiency activities. The overall GDP improvement will induce further job creation in other economic sectors.”
The report comes after G20 omitted any mention of climate finance from its annual communique over the weekend. Diplomats meeting in Germany on Saturday and Sunday walked back their previous support for funding green energy projects to fight global warming at the insistence of U.S. officials.
The German government commissioned the IRENA report in the run-up to the upcoming G20 climate talks. Germany will chair the G20 this year, and plans to use its leadership role to pressure countries to stay party to the Paris climate agreement — specifically, the U.S.
European diplomats have lobbied the Trump administration to stay party to the Paris agreement that went into effect in November 2016. Nearly 200 countries agreed to the pact at the United Nations climate talks in Paris in 2015.
Chancellor Angela Merkel is leading a coalition of countries urging White House officials to stay in the Paris agreement by touting the economic and jobs benefits of the deal. The IRENA report is the latest German-led PR campaign surrounding Paris.
The White House is split over staying party to the Paris agreement. Those in favor of staying are talking with energy industry groups and Europeans, and U.S. participation in Paris “could hinge on international willingness to come up with a strategy to commercialize and deploy technologies that will reduce emissions from fossil fuels,” Politico reported.
Pro-Paris White House staff want to water down targets set by former President Barack Obama to cut greenhouse gas emissions 26 to 28 percent by 2025.
It’s unclear how much sway the pro-Paris faction in the White House has over Trump’s final decision.
If Trump were to stay party to Paris he would be breaking a campaign pledge to “cancel” the Paris agreement.
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