New reports by the International Energy Agency [1] and by BloombergNEF [2] in the lead-up to COP26 both estimate that the global cost of reaching net-zero emissions by 2050 will be somewhere around $4 trillion per year. This is over 4.7% of global gross domestic product (GDP) is compatible with our estimation of the cost of just replacing fossil fuels with electricity generation [3].

The 386 page IEA report states that current pledges by governments cover less than 20% of the gap in emissions reductions that needs to be closed by 2030 to keep a 1.5 °C path within reach. But they argue that solutions to close the gap exist and that many of them are highly cost-effective.

Whether governments will listen to this advice and increase their pledges five-fold at COP26 seems highly unlikely. And even if they did, would they act upon those pledges?

References

[1] International Energy Agency’s World Energy Outlook 2021 says: “Getting the world on track for 1.5 °C requires a surge in annual investment in clean energy projects and infrastructure to nearly USD 4 trillion by 2030.” https://www.edie.net/news/6/How-the-world-can-reach-net-zero-emissions-by-2050–according-to-BloombergNEF/

[2] BloombergNEF’s New Energy Outlook 2021 says: “Despite uncertainty around the overall cost of each NEO scenario, we estimate investment in energy supply and infrastructure to between $92 trillion and $173 trillion over the next thirty years. Annual investment will need to more than double to achieve this, rising from around $1.7 trillion per year today, to somewhere between $3.1 trillion and $5.8 trillion per year on average over the next three decades.” https://about.bnef.com/new-energy-outlook/

[3] https://covcan.uk/cost-of-replacing-all-fossil-fuels-with-clean-electricity-by-2050/