The International Monetary Fund has projected that the world would profit $78 trillion through the end of this century from replacing coal with renewable energy.
This was disclosed by the International Monetary Fund via a blog post titled “How Replacing Coal With Renewable Energy Could Pay For Itself”
The most prevalent argument about replacing coal with renewable energy is that it would be too expensive, but a new IMF study reveals that the economic advantages would considerably surpass the expenses.
What the IMF is saying
- The IMF said, “We analyze this great carbon arbitrage, as we call it, in a recent working paper that calculates the cost of replacing coal with renewables, as well as the social benefits of this important transition. The benefits from ending coal use come from avoiding damage from climate change and harm to people’s health.”
- The International lender added that “Our estimate is that by doing so the world would yield a net gain of nearly $78 trillion through the end of this century. That’s around four-fifths of global gross domestic product now, and would be equivalent to about 1.2% of annual global economic output during the period.”
- According to IMF research, stopping coal use isn’t excessively expensive because it brings economic benefits from lower carbon emissions, such as preventing climate-related infrastructure damage. Renewable energy investments also stimulate economic growth and provide additional benefits from innovation.
- The research demonstrates that phasing out coal is not only necessary but also essential because it would help keep global warming to 1.5 degrees Celsius. Importantly, the economic and health benefits are substantial enough that we should continue to press for global agreements that unleash capital markets’ full potential.
- The IMF said, “It’s a sound economic logic to pay for the replacement of coal with renewables to reap a net social gain measuring in the tens of trillions of dollars.”
The IMF also stated that Public-private partnerships to finance the replacement of coal with renewables could accelerate the green transition and complement incomplete carbon pricing by helping to achieve the Paris Agreement’s aim of making finance flows consistent with a pathway toward low greenhouse gas emissions and climate-resilient development.