Energy transformation towards 100% renewable energy is economically inevitable, and socially and environmentally desirable, yet it may produce negative signals in outdated statistics as fossil trade diminishes and the sector shrinks. This paradox should be addressed in a joint report by, e.g., IRENA, IMF, OECD, and the World Bank, and the Task Force on Climate-Related Financial Disclosures. Fossil fuel extraction and commodity trade will end, and fossil asset values erode. The industry’s role in capital formation, international trade, economic activity (GDP), and government revenue will decline. New energy systems, based on efficiency, renewables, storage, and smart management are cheaper to build, run and maintain. The growth of electricity use stimulates innovation, value creation, and growth in consumer rent, as renewable energy technologies harvest free environmental flows that are not traded and often for self-consumption. The total utility will grow while trade, GDP and the tax base may shrink. Reports should inform G20 Leaders, Ministers of Finance and Central Bank Governors on the true costs and benefits, and alert them to misleading signals.
Year of Publication
2017
Quote
Kraemer, R. A., Carin, B., Gruenig, M., Blumenschein, F. N., Flores, R., Mathur, A., Brandi, C., Spencer, T., Helgenberger, S., Thielges, S., Vaughan, S., Whitley, S., Ruet, J., Ott, H. (2017): Green Shift to Sustainability: Co-Benefits & Impacts of Energy Transformation on Resource Industries, Trade, Growth, and Taxes. — G20 Insights Policy Briefs — Climate Policy and Finance.
IASS Authors
Dr Sebastian Helgenberger
Sonja Thielges