Economic Issues in Deep Low-Carbon Energy Systems

The main interlinked challenges to achieve a low-carbon emission economy are analyzed. It is argued first that there are no obstacles to a free market working effectively with a high penetration of distributed Renewable Energies (RE), since intermittency has been overstated, and affordable storage solutions are available because of strong learning rates. Demand-side management policies are promising too, neither are there foreseeable boundaries to the availability of economically extractable photovoltaic and wind energies. A full 100% RE system may be more challenging though, partly because bioenergy, a key dispatchable source in most available RE roadmaps, clashes with growing food needs and reforestation to counter greenhouse gases emissions. Similarly, the green growth proposal is constrained by materials availability, mainly cobalt and phosphorus, which will also constrain the deployment of electric vehicles. Alternatively, the United Nations Human Development Index may be a more suitable target for a sustainable RE system. Although history is not reassuring, the main global economic hurdle is possibly existing fossil fuel-related investments, likely to become stranded. An assessment of their value yields a substantially lower figure than is sometimes claimed, though. Finally, a limited role for nuclear energy is assessed positively, provided it is publicly owned.