Countries aiming to sharply reduce their emissions to meet climate goals must be prepared for staggering costs and looming political battles as they seek to overhaul swaths of their economies, climate analysts and economists say.
The International Renewable Energy Agency, an intergovernmental organization based in Abu Dhabi, said in March that the world would need to invest $115 trillion through 2050 in clean technologies, such as solar power and electric vehicles, to limit global warming to 1.5 degrees Celsius, or 2.7 degrees Fahrenheit. Such climate goals, made at the 2015 Paris accords, were revived in the Earth Day Climate Summit hosted last week by President Biden.
Environmentalists and some economists say the changes would translate into innovative technologies and job creation, while saving a million lives annually from lowering air pollution and circumventing higher water levels that would swamp coastal cities. Still, the upfront costs would be a challenge, requiring revamps across many sectors, including steel production, agriculture and cargo shipping.
Mr. Biden’s target of sharply reducing U.S. greenhouse-gas emissions by 2030 would force companies to speed the pace of change and present new expenses. Much of the world’s hopes for reducing carbon emissions, however, rest on China and India, which are heavily dependent on coal—considered the dirtiest fossil fuel—to generate power. China is the No. 1 emitter globally.
David Victor, an international-relations professor at the University of California San Diego who focuses on climate policies, said getting to zero requires the difficult task of “eliminating essentially all fossil fuels.”
“What do you do about cement? What do you do about steel production? What do you do about agriculture? What do you do about aviation and shipping?” he said. “There’s a tendency when you study radical technological change to overestimate what’s possible in the near term.”
China needs to invest $21 trillion over three decades to overhaul transportation, industry and construction while building nuclear, wind and solar production facilities to reach the goal of zero net emissions by 2060, according to a report presented by China’s leading climate experts in October at Tsinghua University. That amounts to more than 2.5% of its annual gross domestic product.