Topics discussed include the impact of the Russian invasion of Ukraine on the energy transition in Europe, challenges of nature-based solutions and offset markets, strategies for achieving net zero emissions, cost savings of transitioning to clean energy, policy response to energy crisis in Europe, and the role of academic research in addressing climate change.
Rapid deployment of clean energy infrastructure is crucial for achieving a global net-zero energy system.
Effective policymaking and implementation at all levels of government are necessary for translating clean energy momentum into tangible progress.
Achieving net-zero targets requires carbon removal measures, with carbon pricing playing a crucial role in incentivizing emission reductions.
Deep dives
The importance of working with the current system to address the climate crisis
The speaker emphasizes the need to work with the existing system rather than trying to overthrow it. This involves implementing reforms and radical changes to ensure the system functions in a pro-environmental way. The transition to a global energy system that is net zero requires rapid deployment of clean energy infrastructure. The impacts of this transition are already evident in business, geopolitics, and daily lives. Strong public concern about climate change and advancements in clean energy technology are making this transition more achievable. However, effective policymaking and implementation at all levels of government are crucial to translating momentum into tangible progress.
The economic implications and potential of the clean energy transition
The clean energy transition has the potential to reconfigure the global economy. Policymakers play a key role in accelerating this transition through various levers. The declining costs of renewable energy make it an attractive option compared to traditional fossil fuels. However, policymakers should also consider other aspects of the energy system, such as storage and grid infrastructure. While there may be temporary obstacles like green inflation due to supply chain disruptions, the long-term trend favors clean energy as a deflationary force that benefits the economy overall. The challenge lies in managing the transition effectively and ensuring the availability of necessary minerals and resources.
The need to remove carbon from the atmosphere and the role of carbon pricing
Achieving net zero targets requires the removal of carbon dioxide from the atmosphere. While this is not an ideal approach, it is necessary given the current state of climate change. The cost of removing carbon from the air is outweighed by the cost of shutting down the economy to reduce emissions. Carbon pricing plays an essential role in providing economic incentives for emission reductions. While it is not a comprehensive solution, additional planning and government interventions are needed due to the scale and speed of the transition. Having adequate carbon prices globally is challenging, and policymakers should consider other instruments and interventions to address the complexity of the transition.
The challenges and opportunities of decarbonizing various sectors
Electrification is a cost-effective solution in many sectors, such as transportation and heating. Electric vehicles and renewable energy sources are becoming increasingly cheaper than their fossil fuel counterparts. However, decarbonizing sectors like aviation, shipping, steel, and cement poses additional challenges. The availability and affordability of technologies like clean hydrogen and advancements in electrolysis are key factors in achieving a decarbonized world. Additionally, policies like carbon border adjustments can level the playing field and address trade imbalances, allowing for fair competition and progress in the clean energy transition.
Balancing competition and cooperation in the global energy transition
Competition plays a vital role in driving innovation and cost reductions in the energy transition. However, the trend towards de-globalization and fragmentation could negatively impact the clean energy sector. The need for cooperation remains crucial, but it should be complemented by competition to drive progress. Policies like carbon border adjustments can help level the playing field and create incentives for nations to improve their climate policies. Balancing competition with collaboration is necessary to achieve global climate goals. Academic research, transparency, monitoring, and reporting also play a critical role in holding countries and industries accountable and driving effective policies.
Getting the global energy system to net-zero – a state in which it emits no more greenhouse gasses than it absorbs – means deploying clean energy infrastructure at a pace without historical precedent. The ripple effects of this transition are already apparent in business, geopolitics, and in people’s daily lives.
Increasing public concern over climate change and breakthroughs in clean energy technology have rendered this challenge more achievable. But turning this momentum into tangible progress will require careful policymaking and implementation, across all levels of government.
How might the clean energy transition reconfigure the global economy? What levers can policymakers pull to accelerate it? And what emerging solutions are already changing the outlook for net zero?
Today we’re re-running host Jason Bordoff’s interview with Cameron Hepburn about the economics of the climate crisis.
Cameron is a Professor of Environmental Economics at the University of Oxford and Director of the Smith School of Enterprise and the Environment. He also serves as the Director of the Economics of Sustainability Programme, based at the Institute for New Economic Thinking at the Oxford Martin School. Cameron has over 30 peer-reviewed publications spanning economics, public policy, law, engineering, philosophy, and biology.
In a summer of both heightened climate ambition and heightened alarm over climate change, this conversation was held in the aftermath of the COP27 climate summit. Jason and Cameron discussed how technology developments are accelerating the energy transition and how to scale their impact.
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