Delays on climate change have cost us $8 trillion

TIME is money, goes the saying. When it comes to climate change, two years of inaction has cost the world $8 trillion.

A report from the International Energy Agency (IEA), published Monday, looks at the cost of converting to green electricity in order to keep global warming below 2 °C. The agency found that it will cost $44 trillion more than keeping the current mix, where most electricity comes from fossil fuels. The extra money will go on building wind and solar power stations, efficient grids, electric vehicles and infrastructure.

"We're going to have to invest in our energy infrastructure anyway," says David Elzinga, an IEA analyst in Paris, France. "If we want to transition to clean energy, that is going to cost us a bit more."

In 2012 the IEA estimated the cost of the transition at $36 trillion, which is $8 trillion less than this year's figure. To some extent, the rise is down to quirks in the calculations, such as changes in the value of the dollar. But there is one big factor: the longer we wait to take action on climate change, the more it costs.

Instead of investing in renewable energy now, companies are building coal power stations. These will have to be dismantled early to move to a greener grid, reducing return on the investment. What's more, a later transition must be faster so companies will struggle to roll things out in the cheapest way.

The good news is that, although going green costs more upfront, it brings long-term savings. That is primarily because a more efficient infrastructure uses less fuel. The IEA says that, at $115 trillion by 2050, those savings more than offset the initial investment.

Ultimately, those savings should benefit everyone, whether they are paying for infrastructure through taxes, or spending less on gas for heating. "At the end of the day it is the customer who pays," says Elzinga. "It always comes back to society."

This article will appear in print under the headline "Expensive delays"

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