Making the Transition to a Low-carbon Economy
Keeping climate change within manageable bounds will take a massive global effort, requiring the skills and resources of both public and private sectors. Whether or not we collectively can summon the will to succeed remains an open question. What is not open to debate is the critical need to answer two key questions: Do we have the technology to make the transition, and can we find a way to pay for it? In this special report, Knowledge@Wharton has teamed up with the Initiative for Global Environmental Leadership (IGEL) to explore these issues in the articles below.
Global power demand is increasing, which presents a challenge as the world seeks to switch to clean energy sources. There are significant hurdles, including the intermittent nature of renewables, high cost and siting problems. For many, the ultimate goal is replacing fossil fuels with 100% renewable energy, and plans to get us there are emerging. Nobody believes it will be either an easy or a quick transition, but many think it’s possible.
Uncertainty abounds as experts try to put price tags on various paths to a sustainable future. Calculations have to include both the investments needed and the potential paybacks, and factor in how technology improvements and increasing scale will affect future costs. By any accounting, the ultimate price tag is daunting, but maintaining the status quo incurs even greater costs, for the world economy and the environment.
Increasingly, the public sector is looking to private investment to help fund the transition to a low-carbon economy. New financial instruments and strategies are being developed to tap growing market demand, allowing institutional and retail investors to do well by doing right by the environment.