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How Much Will $37 Trillion Buy Us?

Yesterday, the International Energy Agency, at its "World Energy Outlook" conference in London, announced that the world would need at least $37 trillion in investments between now and 2030 to stabilize greenhouse-gas emissions below sustainable levels. (By "sustainable," they mean keeping carbon concentrations in the atmosphere below 450 ppm—note that some climatologists, notably NASA's Jim Hansen, worry we need to dial back to 350 ppm to avoid the worst effects of climate change.)

Now, $37 trillion is the sort of heart-stopping figure that makes this all seem undoable. But things start to look different when you bore down into the numbers. The world will already need $26 trillion in energy investments, no matter what, between now and 2030—that's just to keep up with expected growth in demand, and it would be necessary even if we kept burning fossil fuels willy-nilly. So then we'll need another $10.4 trillion if we want to shift to cleaner sources of energy. (Bear in mind these are investments, not deadweight costs.) But then those investments—which will include a lot of efficiency improvements—will bring at least $8.6 trillion in benefits from lower energy bills alone. And that's not including the benefits from better health and, of course, reducing our risks for drastic global warming.

In any case, Greenwire's write-up of the IEA conference has some useful tidbits. Becoming more energy-efficient—which includes everything from wringing out the waste in our power sector to smarter appliances to CFLs to fuel-economy standards—would likely account for more than half of the cuts in carbon-dioxide emissions by 2030. Nuclear and renewable power supply the next biggest chunk. The shift to electric vehicles will play a mid-sized role. And meanwhile, capturing carbon emissions from coal plants will likely get just a bit part—accounting for just 10 percent of the emissions savings by 2030. (And, judging by recent reports, even that target might be too ambitious for CCS.)