June 6, 2008, 7:13 pm
How Much Does It Cost to Go Green? The Answer is $45 trillion
By JAMES KANTER
The International Energy Agency today put a figure on the amount it will cost to go green, and its a lot: $45 trillion. Even when you spread that amount over the next 42 years, its still more than $1 trillion annually, or more than the GDP of many industrialized nations.
Nobuo Tanaka, the agencys executive director, gave the figure as part of a report calling for a global energy revolution. He called for immediate policy action and technological transition on an unprecedented scale. The world needed to completely transform the way we produce and use energy.
The question is how to get there.
The agency hints that the answer might lie in a global treaty, saying member nations of the United Nations Framework Convention on Climate Change, the parent treaty of the Kyoto Protocol, must negotiate ways of encouraging governments and businesses to lower emissions.
John Hay, a spokesman for the UNFCCC, told me that markets operating under the Kyoto treaty that put a price on carbon pollution, such as Europes Emissions Trading System, already were playing an important role in driving investment. But analysts I spoke to said global agreements, while potentially helpful, were unlikely to hold the key to raising such vast sums.
Robert LaCount of Cambridge Energy Research Associates said governments would have to bite the bullet and bear much of the cost.
Only nations with their deep pockets could take the risks required to turn risky technologies from pipe dreams into reality.
Pierre Noel of the European Council on Foreign Relations said the key was sustained high oil prices. With the prices of gas and oil reaching record levels (and coal prices heading upwards too), energy entrepreneurs might be ready to help the planet take the leap described in the IEA report.
What do you think is the key to raising $45 trillion?
How Much Does It Cost to Go Green? The Answer is $45 trillion - NYTimes.com