Climate mitigation refers to actions taken to reduce greenhouse gas emissions and limit the impacts of climate change. Here we will discuss several economic benefits of climate mitigation.
Some of these co-benefits have a direct financial translation (e.g. savings from reduced fuel use) while others (like health or the preservation of biodiversity) do not have a direct monetary value and therefore need to be estimated. There are also second-order impacts, including those resulting from freeing public resources for alternative uses. In addition, there are macro effects associated with increased climate-related investments on growth and employment.
One study estimated global average health cobenefits at $58–380 per ton of CO2, reduced, with benefits higher in developing than developed countries. In East Asia co-benefits are estimated to be 10–70 times the marginal abatement cost in 2030. According to other studies, the health cobenefits of limiting warming to 2 degrees by 2100 in the EU27 is estimated at $200 per tonne of CO2 reduced. Other authors estimate health cobenefits in developed countries at $100 per tonne of CO2, while the modal shift to public transport results in a combined benefit of $60 per tonne of CO2.
For most countries in the world, including the U.S., we find strong evidence that the benefits of achieving the ambitious Paris targets are likely to vastly outweigh the costs.
"For most countries in the world, including the U.S., we find strong evidence that the benefits of achieving the ambitious Paris targets are likely to vastly outweigh the costs"
Marshall Burke, - assistant professor of Earth system science in the School of Earth, Energy & Environmental Sciences, Stanford
Cost savings:
Renewable energy sources such as solar, wind, and hydropower have the potential to generate significant cost savings in comparison to fossil fuels. The exact amount of cost savings varies depending on a range of factors, such as the specific technology used, the location of the project, and the scale of the deployment. However, here are some general estimates of cost savings associated with renewable energy:
- Lower electricity costs: According to a study by Lazard, the levelized cost of energy (LCOE) for utility-scale solar photovoltaic (PV) and wind power has fallen below the LCOE of most fossil fuel technologies. This means that in many cases, renewable energy sources can generate electricity at a lower cost than fossil fuels, resulting in cost savings for consumers.
- Reduced fuel costs: Renewable energy sources do not require fuel to generate electricity, unlike fossil fuel power plants. This means that the operating costs for renewable energy sources are significantly lower, resulting in cost savings over time.
- Long-term price stability: Fossil fuel prices can be volatile and subject to sudden price spikes, which can result in price uncertainty for consumers. In contrast, renewable energy prices are generally more stable and predictable over the long term, providing greater price stability and reducing the risk of price shocks.
- Health and environmental cost savings: Fossil fuel power plants can have significant environmental and health impacts, such as air and water pollution, and public health costs associated with these impacts can be significant. Renewable energy sources have lower environmental impacts and can reduce these costs.
Job Creation
The potential to create significant job opportunities across a range of sectors, from renewable energy and energy efficiency to sustainable transportation and green construction. As the world transitions towards a more sustainable economy, investments in the green economy can drive economic growth while also addressing environmental and social challenges. The exact number of jobs created varies depending on the specific sector and scale of the green economy, but here are some general estimates:
- Renewable energy: The renewable energy sector, including solar, wind, and hydropower, has the potential to create significant job opportunities. According to the International Renewable Energy Agency (IRENA), the renewable energy sector employed 11.5 million people worldwide in 2019, up from 10.3 million in 2017.
- Energy efficiency: The energy efficiency sector, which includes activities such as building retrofits and energy-efficient appliances, has the potential to create significant job opportunities. According to a report by the International Energy Agency (IEA), energy efficiency could create up to 9.8 million jobs globally by 2050.
- Sustainable transportation: The transition to sustainable transportation, including electric vehicles and public transportation, has the potential to create significant job opportunities. According to a report by the International Labour Organization (ILO), the shift to low-emission vehicles could create up to 15 million net new jobs globally by 2030.
- Green construction: The green construction sector, which includes activities such as green building design and construction, has the potential to create significant job opportunities. According to a report by the Green Building Council, green building construction is expected to support nearly 6.5 million jobs in the United States by 2030.
Zero-emissions power generation is responsible for more than twice as many jobs as fossil fuel generation. In the power sector, zero-emissions generation like solar and wind was responsible for about 544,000 jobs in 2019, more than twice as many as the 214,000 jobs in fossil fuel generation. Add that to jobs in energy efficiency, low-carbon vehicles and clean fuels, and there were 3.6 million Americans who had clean energy jobs in 2019 – more than all workers in grocery and liquor stores combined.
According to a report by the International Labour Organization (ILO), the shift to low-emission vehicles could create up to 15 million net new jobs globally by 2030.
The U.S. advanced energy industry generated $238 billion in revenue in 2018, about 15% of the global total. That’s roughly equal to that of aerospace manufacturing and double that of the biotechnology industry. Furthermore, a $23 trillion market for climate-smart investments is expected to be created by 2030 in 21 emerging markets as those countries work to meet the goals of the Paris Agreement.
- Energy efficiency: According to a report by the International Energy Agency (IEA), investments in energy efficiency could generate up to $4.8 trillion in global economic benefits by 2040. The report also estimates that energy efficiency investments could create up to 6 million jobs globally by 2023.
- Sustainable agriculture: According to a report by the World Bank, investments in sustainable agriculture could generate up to $1.8 trillion in global economic benefits by 2050. The report also estimates that investments in sustainable agriculture could create up to 80 million jobs globally by 2030.
- Sustainable infrastructure: According to a report by the Global Commission on the Economy and Climate, investments in sustainable infrastructure could generate up to $26 trillion in global economic benefits by 2030. Additionally, the report estimates that investments in sustainable infrastructure could create up to 65 million new jobs globally by 2030.
Overall, the economic benefits of Climate mitigation has the potential to generate significant economic benefits and create new opportunities for growth and innovation. By investing in renewable energy, energy efficiency, sustainable agriculture, and sustainable infrastructure, governments, businesses, and investors can drive economic growth while also addressing environmental and social challenges.
