$12 Trillion Won't Save the World
Wealth redistribution in the name of "saving the planet" won't come cheap.
Two degrees Celsius. That’s the maximum amount of future global warming environmentalists say the world can tolerate. Anything more, they claim, and our efforts to stave off a climate catastrophe will fall flat. It’s a spurious magic number, but one that was formally adapted into the Paris climate agreement in December. And it won’t come cheap.
“If the world is serious about halting the worst effects of global warming, the renewable energy industry will require $12.1 trillion of investment over the next quarter century,” according to a new report published in Bloomberg. For perspective on just how much money we’re talking about here, consider that gross domestic product in the United States was $17.4 trillion in 2014, according to the World Bank. That’s good for number one in the world. But China, which came in at number two, produced $10.4 trillion in GDP. That means an entire year’s worth of Chinese economic output wouldn’t be enough to cover the low-carbon investments the Bloomberg report says is needed over the next quarter century. So it comes as no surprise that current funding projections are well short of the goal:
The findings from Bloomberg New Energy Finance and Ceres, a Boston-based coalition of investors and environmentalists, show that wind parks, solar farms and other alternatives to fossil fuels are already on course to get $6.9 trillion over the next 25 years through private investment spurred on by government support mechanisms. Another $5.2 trillion is needed to reach the United Nations goal of holding warming to 2 degrees Celsius (3.6 degrees Fahrenheit) set out in the climate agreement.
And no doubt that gap will be filled via wealth redistribution. Even worse, these numbers aren’t as bad as depicted in other studies, such as the International Energy Agency’s $16.5 trillion cost estimate. And that’s just through 2030. Instead of redistributing trillions of dollars, the better option would be for poorer countries to invest in energy sources we already know save lives — and let the free market figure out the future of energy.