Global experts say the economic case for renewable energy has never been stronger

Countries around the world will require “an unparalleled ramp up” of clean technologies and a range of ambitious policies to prevent dangerous warming of the planet’s atmosphere, say international experts.

But they also lay out a plan that shows the expensive transformation — or “decarbonization” of the global economy — is possible and would save a lot more money than the costs of continuing business as usual.

These are among the findings in a new 203-page report released by the International Renewable Energy Agency — a partnership made up of governments from around the world — based on a set of different scenarios. The decarbonization would also lead to lower energy bills for consumers, the report said.

“Reducing the impact on human health and mitigating climate change would save between two- and six- times more than the costs of decarbonization,” said the report, that was reviewed by more than three dozen energy experts from around the world.

IRENA says Canada and U.S. 'have rather conservative policy ambitions' on energy

The report, also based on projections from the International Energy Agency, said that many countries need to do a lot more than what they are currently planning, including Canada and the United States. According to the experts, these two North American countries “have rather conservative policy ambitions” when it comes to promoting clean energy.

The director of the agency, Adnan Z. Amin, noted that countries showed "unprecedented international determination to act on climate" when they reached the Paris Agreement in 2015. But to deliver on this agreement, they must now focus on decarbonizing the global energy system since it accounts for almost two-thirds of the heat-trapping greenhouse gases that contribute to climate change, Amin explained.

“Critically, the economic case for the energy transition has never been stronger," Amin said in a statement that was released along with the new report on Monday. "Today around the world, new renewable power plants are being built that will generate electricity for less cost than fossil-fuel power plants. And through 2050, the decarbonization can fuel sustainable economic growth and create more new jobs in renewables."

The report includes a roadmap for countries to follow to achieve this goal of decarbonization. It requires governments to “immediately and comprehensively” deploy new policies to deliver on this transition and avoid stranded investments in fossil fuel infrastructure, which could include expensive oil and gas projects or new pipelines that would not be needed in the future.

“Early action is critical in order to limit the planet’s temperature rise to 2 degrees Celsius and to maximize the benefits of this energy transition, while reducing the risk of stranded assets,” the report said.

IEA: Oil and gas could still play significant role

One of the scenarios in the report, based on recommendations by the International Energy Agency, said that oil and gas consumption would decrease but still play a significant role in the future.

But in this scenario, the report also said that solar and wind power would become the largest sources of electricity in the world by the year 2030. This would put a significant dent in the share of carbon intensive coal power plants, which are also a significant source of air pollution.

“By 2050, nearly 95 per cent of electricity would be low-carbon, 70 per cent of new cars would be electric, the entire existing building stock would have been retrofitted, and the CO2 intensity of the industrial sector would be 80 per cent lower than today,” the report said.

Another scenario from the International Renewable Energy Agency said that oil demand would be at 45 per cent of today’s levels, with resources with high production costs “no longer exploited.”

Such a scenario could translate into an economic trouble for Canada’s oil-rich province of Alberta, which has the planet’s third largest reserves of crude oil in the world, but currently has some of the highest production costs.

The extraction of heavy oil from the oilsands deposits in this western Canadian province is expensive since it requires large amounts of water and energy to separate the crude from sand beneath the Canada's boreal forest.

Multinationals leaving oilsands

In recent months, several multinational oil companies, including Royal Dutch Shell, Total and Statoil, have cashed out their investments in Alberta’s oilsands, Canada’s fastest growing source of greenhouse gas pollution, citing a number of factors, including a desire to shift to energy with a lower environmental footprint.

The industry has also struggled to compete with other international producers since the fall of 2014 when global oil prices started to plummet, leading to tens of thousands of job losses in Alberta.

But both the federal Liberal government, led by Prime Minister Justin Trudeau and the Alberta NDP government, led by Premier Rachel Notley, have said they are introducing climate change policies to lower greenhouse gas emissions and diversify energy supplies, while promoting new oil pipelines at the same time.

Environmentalists and some economists have criticized both governments for this approach, arguing that the new fossil fuel infrastructure makes no sense in a world that is succeeding at tackling climate change. Energy companies and some politicians say there would still be a role for Canadian oil in a carbon-constrained world.

Meantime, several federal and provincial Conservatives, including newly-minted Progressive Conservative Leader Jason Kenney, have proposed to move away from addressing climate change, promising to scrap plans to put a price on pollution without offering any substantial policies to build a clean energy economy.

Globally, the new report says that the 20 largest economies in the world need to increase the share of renewables in their economies to levels up to 80 per cent by 2050. Collectively, the countries would need to do more work to achieve those goals, but many “do not have ambitious plans,” the report said, despite showing significant potential.

“Canada, India, Turkey and the United States, for instance, all have high levels of renewable resources, both today and in the countries existing plans until 2030/50.”