80% Less Carbon: Get Ready for a Prosperous Future

80% Less Carbon: Get Ready for a Prosperous Future

It’s easy to fall into the assumption that using less energy means doing without, that a low-carbon, low-energy economy will leave us all freezing in the dark.

But if you somehow drew that conclusion from Low-Carbon Energy Futures: A Review of National Scenarios, the report released last week by the Trottier Energy Futures Project (TEFP), you’d be missing the point of the research.

The study summarizes low-carbon energy scenarios from eight wealthy, industrialized, largely urbanized economies, and it shows that a low-carbon energy future is a prosperous future. Through 2050, almost all the national scenarios assumed continuing population growth, which in turn drove gross domestic product (GDP) increases of 1.7 to 2.4% per year, in line with standard economic forecasts.

Only one of the studies, Germany’s, anticipated a smaller population by 2050, and it still showed annual GDP growth of 1.1%, a 64% overall increase between 2005 and 2050.

An Extravaganza of Efficiency

The National Scenarios report shows just how much energy waste is built into some industrialized economies, including Canada’s. Even today, some European countries have per-person greenhouse gas emissions that are half of Canada’s, with the same or better standards of living.

Those same countries can reduce their emissions by a further 80% by 2050, while maintaining or improving their standard of living and quality of life. By the time they’re done, their economies will use energy 90-95% more efficiently than Canada’s does today.

The cost of this extravaganza of efficiency is pretty modest against the scale of the energy economy itself, and miniscule against the future economic losses attributable to climate change: The National Round Table on the Environment and the Economy placed Canada’s annual cost at $5 billion in 2020, and between $21 and $43 billion in 2050.

A Positive Return on Capital

The unheralded payoff? A low-carbon transition can be profitable enough to more than pay back the original capital costs. The high initial investment in energy efficiency and renewable energy has traditionally put a damper on a low-carbon transition, but once the systems are installed, their annual operating costs are very low. With capital costs falling and efficiencies improving, the dollar savings from low-carbon energy systems can actually exceed their levelized cost, a calculation that includes the cost of capital, fuel, fixed and variable operating and maintenance, financing, and a system’s expected utilization rate.

When efficiency savings exceed these levelized costs, they deliver an indirect benefit that should be a major factor in economists’ assessments of a low-carbon transition.

This added bonus may not be the first thing that leaps to mind when we list our top reasons to curtail the greenhouse gas emissions that cause climate change. But it might be just the economic push we need to start building real momentum toward a low-carbon energy future for Canada.

Click here to download a copy of Low-Carbon Energy Futures: A Review of National Scenarios.

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