Google, a leader of innovation in the digital economy, says that without a private and public focus on innovation in renewables, storage and electric vehicles, the cost of delaying the clean energy economy could be in the trillions of dollars to the U.S.
Google released an analysis of the economic impact of clean energy innovation today, modeling a variety of long-term scenarios and their influence on GDP growth, a reduction in energy costs and greenhouse gas reductions. They used McKinsey’s Low Carbon Economics Tool, which provides models to assess the macroeconomic impact of climate and energy policies.
Based on our modeling, we estimate that by 2030, innovation in the modeled technologies alone could have a transformative impact on the US, adding over $155 billion per year in GDP and 1.1 million net jobs, while reducing household energy costs by $942 per year, oil consumption by 1.1 billion barrels per year, and GHG emissions by 13% relative to BAU. By 2050, annual gains in GDP increase to $600 billion, net additional jobs to 3.9 million, and emissions reductions to 55%.
But delaying this “innovation arms race” by as little as five years with inconsistent policy that slows private investment (a delay not unlikely in the U.S.) could result in $2.3-$3.2 trillion in unrealized GDP gains — costing the U.S. over a million new jobs and preventing the reduction of up to 28 gigatons of CO2.
This study also highlights another important point: It will take far more than clean energy innovation to substantially reduce GHG emissions. The most optimistic Google models only enable electric vehicles, energy storage and renewables to reduce U.S. greenhouse gas emissions by 49% compared with 2005 levels. This study doesn’t address some of the other core climate solutions like building efficiency, demand response, advanced materials and agriculture.
The study also makes clear that innovation goes hand-in-hand with smart energy policies, including mandates for efficiency and renewables to accelerate deployment:
Policies can also amplify the economic, security, and pollution benefits of breakthroughs by creating markets, dis-incentivizing the highest-emitting technologies, and leveling the playing field for clean energy, leading to increased adoption.
The bottom line is that innovation plus policy (mandates or a carbon price) “has the best overall outcome.”
Below are the earlier comments from the Facebook commenting system:
You need to fix the misplaced “could” in the headline.
5 years? from now- think 19 years- go from there.
by 2021 a new dust bowl emerges in the western Midwest and great plains.
“Innovation goes hand-in-hand with smart energy policies, including mandates for efficiency and renewables to accelerate deployment.”
I’ve long felt that our economic future is rather bleak without a conversion to clean energy. Nice to now have some company in my corner.
It is terribly important to get the message out: a green economy, a functioning EPA, etc. ISN”T a jobs killer for America as a whole. It only threatens the jobs of polluters.
I love this blog, especially for the charts, graphs, and tables – we get real data missing from most of the mainstream media (who can’t even consistently report the Case-Shiller index – look at the conflucting reports today). Having said that, please excuse the minor criticisms from a chemistry professor who has corrected a lot of student-written manuscripts:
First graph: BAU – define it! (Took me a while to realize it is ‘business as usual’ and even that isn’t clearly defined. The horizontal axis is ‘time’, right? (Yes, I know the legend says 2010 – 2050 – still, use an axis!) Please supply and label the vertical axis with a correct scale – like “Increase in annual GDP over GDP assuming BAU.)
Thanks for the criticism Timothy — we’ll be sure to include more data to make the charts more helpful.
June 28 at 12:46pm
This is outstanding research presented it a great way. All the numbers look very realistic.
I would like to see efficiency added to figure 2 and the other graphs to put it in perspective. While collapsing the whole McKinsey efficiency curve to a single number is a challenge, there is a massive block of avoided generation that can be had for under coal’s $28/MWh with existing technologies that is not being deployed. This block of efficiency is larger than the size of new generation likely to come on line. With BT efficiency technology that value could be greatly expand. Renewables and efficiency are best presented side by side to policy makers, investors, etc. as they all can be measured by similar cost and benefit evaluations. There is no MWh that is more cost effective or greener that the MWh that does not need to be generated.
One other point on figure 2, the big jumps in cost reductions for solar and off shore wind between 2010 and 2020 need a bit more discussion as I suspect that those unfamiliar with the technology may see this as hand waving.
Very exciting. Is it true that most readers around the US understand that Google does good analysis? AND is it true that most politicians fear Google’s political clout in elections… now that Citizens United has been decided?
Another perspective would be “Delaying clean energy would leave trillions in the rubble.”
As forest fires approach plutonium storage drums at Los Alamos and epic continental flood surrounds atomic fission reactors, farms and homes while the sane battle against a proposed 1700 mile tar sands oil pipeline from destroyed boreal forest, perhaps we should reconsider letting plutocracy, militancy and extremism govern what’s left of the shining city on the hill.
Sociopaths have assumed control of the nation’s finance, and it is used only for acquisition of private gain at great public cost, including lost opportunities. A veritable “black gold” monetary standard.
Thanks for the study Google.
Unfortunately the reality of all this is quite different. The reality is now being played out in Great Britain. Between hidden ‘green’ taxes and passed-down costs from existing utility companies paying carbon taxes, the average family of 4 is paying an extra $2000. a year and it’s expected to go up in years to come.
Fossil fuels are heavily subsidized via special tax breaks and trillions in mil spending to protect their ill gotten gains. Then there is all the environmental costs externalized on to society while they internalize the profits. The fossil fuel barons are doing everything they can to make sure the public isn’t made aware of these hidden costs.
June 28 at 8:47pm
I’m very surprised how little the cost of energy per household would increase in the business as usual scenario. I would expect much of our current energy sources to become much more expensive in the longer run. My expectation would have been that we need a lot of energy efficiency just to keep total energy costs per household constant. And quite a bit more to further lower our needs to a level that they can be covered by renewables. Were my expectations wrong? Or are these graphs optimistic about the costs of doing ‘nothing’ (BAU)?
What will it take?
I’m glad google is on this, since the effort to overcome fossil fuel propaganda will take money, and Google has lots of it. They don’t know this battle as well as a lot of us do, so they should call on Climate Progress human resources here.
I often hear from Faux News watching family members how investing in wind and solar is a waste of money because it can’t replace coal or oil right now. If we applied this same philosophy to medicine we would be still trepanning people because we don’t have a cure for cancer. Funny how all these climate change skeptics are all funded by big oil or coal, and will anything to stop or slow down their eventual demise to clean energy.
Excellent post. When Software and IT Giants like Google are investing heavily in Renewables, how about other major Industries which are in core sector of manufacturing and Infrastructure?
Dr.A.Jagadeesh Nellore(AP), India.
Wind Energy Expert.
Worst, it could be the death knell for Climate Change Irreversibility. More than a trillion tonnes of methane can escape with the melting of the Ice in Antarctic and Siberia.
Polar Bears agree, “shock”opaths are in control. These estimates are conservative. If we put a price on carbon (tax and rebate), it will transform our economy top to bottom. Sadly it is unlikely even the largest ramp up in history of green “technology” won’t avert worst case scenarios, carbon emissions approaching 400PPM has likely reached tipping points. Technology is one part of the solution, throughput is also a major issue, which means reduction in consumption across the board, then social justice needs to be addressed, the billions who are left out of sustainable development and impacted most by climate disruption. We need to get busy.
A few trillion here and a few trillion spent on our wars and pretty soon you’re talking about real money.
Delaying the clean energy transition 10 years could leave humanity holding the smelly end of the stick.
no matter what your belief is on ‘climate change’ if we keep denying the need to change what will our economy be like for us…our children…grandchildren!