4. The Price of the Victory: 50 trillion dollars
« 3. A 900-Gigaton Battle Plan
This journey has been quite enlightening so far, but now we must tackle the costs. Almost everything in the fight against the Climate Kraken comes with a price tag, so it's time to measure the costs and allocate resources to our superheroes.
Many climate commitments made at COP meetings amount to little more than hollow words without financial support. “Somebody needs to reduce their carbon footprint.” To create genuine change, we need to equip our superheroes with the necessary resources (read: money).
Evaluating costs per ton of CO2 is crucial in the fight against the Climate Kraken.
Why are the costs so important? To move from climate dreams to climate actions, we need funding. There needs to be a dedicated party who is financing the change, otherwise it will not happen. And dreaming is free, we do not need to finance that. Real action needs financing and this is hard, because this is where NIMBY happens (Not In My Budget Year).
By comparing different options and prioritizing more cost-effective solutions first, we can save more carbon per euro or dollar spent.
Understanding costs is critical because it will require contributions from everyone – governments, companies, and individuals. Yes, that includes you. To make this more tangible, consider the average American family of four, with a consumption-based carbon footprint of around 25 tons of CO2e per person. Offsetting their carbon footprint can have vastly different costs depending on the method. Building a solar park or tree planting might cost around $30 per ton, resulting in an annual expense of $3,000. While this may not be ideal, it's manageable.
However, if they were to use a more expensive offsetting method like Direct Air Capture (DAC), their annual cost of the family could rise to between $50,000 and $100,000. Almost nobody would be willing to take that cost.
My friend Rob West operates a research firm, Thunder Said Energy, that focuses on energy transition. He has developed a remarkable model that lists all potential tools for our superheroes and calculates the indicative cost of each subgroup.
By ranking decarbonization options based on cost, Rob found that achieving net-zero by 2050 is possible with an average price of $40 per ton.
Rob created for me also “Christmas in March” when he was willing to share the data behind this. Each group in this slide has various cost layers in Rob’s research - solar, for instance, is not just one category but varies in cost-effectiveness depending on the specifics.
The IPCC has compiled an excellent chart in a similar vein. It highlights the main areas where our superheroes could bring about change by 2030. The chart's genius lies in the cost correlation (represented by the colors). Securing the first 2 GTCO2e per year is cheaper than the subsequent 2 GTCO2e. It also clearly showcases how our superheroes have different capabilities - some areas have smaller effects and others are very costly.
To aid visualization further, I updated the battle plan for the superheroes with costs. Check the link to the interactive chart, you can select cost / CO2e impact / total cost (billions) and sort the chart based on that.
Upon closer examination, it's evident that there is a feasible pathway to net zero with a nearly reasonable cost.
Nearly? To put it all together, if we multiply the Climate Kraken's weight (900 gigatons) by the $40 per ton price, we get… drumroll… $36 trillion. That's the estimated cost of winning the war by 2050. However, given that flawless global coordination is unattainable and richer countries need to pay more, a more realistic cost might be closer to $45-50 trillion. Can we afford that? We will look at this in the next part of the series.
» 5. Climate Naivety: The $50 Trillion Mirage