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Will the world switch to Renewable Electricity generation in the future?

Within debates regarding global climate change, the emission of carbon dioxide (CO2) as a consequence of burning fossil energy sources, such as oil, coal and natural gas, is interpreted as the human contribution to accelerating and destabilising natural climate swings.

Researchers at Oxford’s Institute for New Economic Thinking (INET) argue that current claims that the cost of transitioning to renewable electricity generation is too high, are based on outdated models. By developing more accurate models with higher predictive capacity, as well as, switching the mindset of businesses, investors and other parts of civil society, Professors Cameron Hepburn and Doyn Farmer tackle the disincentivising narrative that an imminent transition is unrealistic.

The “COP 21”deal of the United Nations Climate Change Conference in Paris, in 2015, set out clear and ambitious targets for a “net-zero” world, meaning that one of the aims of the Paris Agreement is to “achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century”.

Decarbonizing the entire global economy is no easy challenge but would bring about this balance, limiting the global temperature increase to 1.5˚C in the second half of the 21st century. To assess progression of this endeavour, a look at “cumulative CO2 emissions” localises total human-induced warming since 1870 at about 1˚C so far, emitting some 40 billion tons yearly; only half of this is being absorbed and transformed by the environment.

What is novel is that interdisciplinary researchers at INET at the Oxford Martin School are aiming to identify sensitive intervention points where “actions can deliver impact at scale and accelerate the achievement of global net-zero [greenhouse gas, n.b.] emissions”. This includes complexity scientists, social scientists, the humanities and those from a medical background. Existing models are being challenged on grounds of having failed to predict past developments sufficiently and leading to narratives that are inappropriate.

A hypothesis won from such narrative is that estimates of the costs of reducing emissions are too high. Criticism from the aforementioned researchers is aimed at the role time has in existing models. As they focus on current data, they do not allow for future positive feedback loops stemming from developments in energy efficiency, cost of capital, or perception of risk for instance. This means that an improved understanding of better technology will lead to investments in fields such as renewable energy as – through time – investment risk will have become lower.

According to the U.S. Energy Information Administration, “[t]he non-carbon electricity generation share of U.S. power generation, including nuclear and renewables, exceeded that of coal and natural gas in 2015 and remained higher through 2018. The increase in natural gas and non‐carbon electricity generation helped lower the carbon intensity of U.S. electricity supply in recent years”. Wind and solar generated electricity for instance, have combined accounted for about 24% of U.S. non‐carbon electricity generation in 2018, up from virtually 0% prior to 1999 – gaining against the declining shares of hydro and nuclear energy.

Stronger trust in more precise models that can accurately incorporate complexity and its emergent properties may be the foundation of future research especially in the field of renewable energy and its impact on society.

Edited by: Patrick Lehner

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