Cost of achieving zero CO2 emissions by mid-century: Approach and estimation for the world largest economies

A. Kolpakov, A. Yantovskii and A. Galinger
Additional contact information
A. Kolpakov: Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia
A. Yantovskii: Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia
A. Galinger: Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia

Journal of the New Economic Association, 2022, vol. 55, issue 3, 139-154

Abstract: The article presents a methodological approach to assessing the cost of energy for the world economy in ambitious scenarios for reducing CO2 emissions associated with energy consumption. The approach takes into account that large-scale replacement of fossil fuels with electricity generated from renewable energy sources: a) should be accompanied by the grid development and the deployment of reserve storage capacities and hydrogen technologies; b) requires the use of mechanisms for projects payback, which are included in the final prices for electricity; c) will create the need to replace the shortfall in budget revenues from the production and consumption of hydrocarbon fuels. Forecast calculations show that the scenario of achieving zero emissions in the middle of the XXI century may turn out to be unstable, since it is characterized by increase in the cost of energy supply to the world economy by 40% compared to the current level, and the ratio of energy costs to GDP will exceed 13% in certain periods, and for some countries (including Russia) - 15%. For the global economy to remain within its solvency limits, hydrocarbons should play a decisive role in energy supply for another two decades, but the growth in energy demand can increasingly be met with the help of carbon-free solutions.

Keywords: CO2; emissions; renewable energy; energy price; investments; Paris Agreement (search for similar items in EconPapers)
JEL-codes: O13 O33 O5 Q01 Q4 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.econorus.org/repec/journl/2022-55-139-154r.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2022:i:55:p:139-154

DOI: 10.31737/2221-2264-2022-55-3-7

Access Statistics for this article

Journal of the New Economic Association is currently edited by Victor Polterovich and Aleksandr Rubinshtein

More articles in Journal of the New Economic Association from New Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Alexey Tcharykov ().