Adair Turner: we must achieve net zero emissions across the whole world by around 2060. That may seem daunting. But it would be undoubtedly technically possible at very small economic cost, as a report from the Energy Transitions Commission makes clear. The issue is not feasibility, but whether governments, industry and consumers are willing to take the actions required to get there. Achieving net zero emissions requires boosting the role of electricity. The commission, which I chair, estimates its share of energy demand must grow from 20 per cent today to more than 60 per cent by mid-century. Total generation would have to rise from 20,000 terawatt hours to up to 100,000 twh. Nuclear power could play some role but most of this power must and can come from renewable sources, including wind, solar and water. Less than 1.5 per cent of the global land surface area could produce all the renewable electricity the world needs: and it is physically possible to run grids that rely on intermittent renewables for 85 to 90 per cent of their power, while still delivering electricity whenever needed. The real challenge is to get to this endpoint fast enough: that requires us to quintuple our annual investment in renewables capacity for the next 40 years. Three other technologies are also essential. First there must be a major role for hydrogen power: steel producers could potentially use it rather than coking coal as the reduction agent, and ammonia (produced from hydrogen) could be used as fuel for ships. Hydrogen can result in zero-carbon emissions if produced via electrolysis using zero-carbon electricity. Second, we must tap bioenergy to provide zero-carbon aviation fuel and as a feedstock for plastics production. But this step must be carefully managed to avoid harmful impacts on ecosystems and food production. Third a relatively small but still vital role for technologies that capture CO2, particularly in cement production. Some aspects of a zero-carbon economy will make consumers better off. Within 10 years, electric cars will not only be cheaper to operate than diesel or petrol, but also cheaper to buy. In heavy industry and transport, where it is harder to reduce CO2 emissions, some additional costs are unavoidable but often the consumer impact will be trivial: making cars from zero-carbon steel would add no more than 1 per cent to a typical car price. But in some specific sectors, material price increases may be unavoidable: if bio-based aviation fuel costs 50-100 per cent more to produce than conventional jet fuel, that would add up to 20 per cent to ticket prices.
FT 22nd Nov 2018 read more »