The Tipping Point: How the G20 Can Lead the Transition to a Prosperous Clean Energy Economy

J. Farmer, Cameron Hepburn and Eric Beinhocker

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: The world is approaching an historic tipping point. The cost of clean energy technologies such as solar, wind, and batteries are declining rapidly while their performance increases. These technologies have already become less expensive than new-build fossil fuel power generation in many regions and applications. In the coming 10-20 years it is highly likely that clean energy technologies will become less expensive than coal, oil, and gas electricity generation for almost all regions and all applications. When this tipping point is reached, clean, modern, cheap energy infrastructure will rapidly replace dirty fossil infrastructure. While this is good news, unfortunately this tipping point is not going to happen soon enough to prevent dangerous levels of climate change. Electricity generating infrastructure has a long life, typically 20-40 years. The generating infrastructure the world has today already has enough "baked in" future emissions to exceed the 1.5-2°C warming limit committed to in the Paris Agreement. Any new fossil infrastructure being built or planned today risks not only contributing to warming above the Paris threshold, but also being made obsolete before the end of its operating life by rapidly advancing clean energy technologies. G20 nations should take the lead in policies that accelerate improvements in the cost and performance of clean energy technologies, eliminate subsidies and support for fossil fuels, and bring forward the clean energy tipping point. Such policies will bring significant economic benefits to citizens, reduce the risk of being stranded with costly, polluting, fossil infrastructure, and contribute to global efforts to mitigate climate change.

Pages: 19 pages
Date: 2018-05
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Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2018-09

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