The UK 2050 Calculator Web Flash Excel Wiki
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Results of the costs analysis

The 2050 Calculator shows that the total ‘cost of the energy system’ today is around £3,700/person/year and that if we do not tackle climate change, the total cost of the energy system could be £4,682/person/year on average over the next forty years.

The capital, operating and fuel costs of tackling climate change could be similar to doing nothing and may be cheaper than remaining fossil fuel dependent (even if fossil fuel prices are not high). For example, a pathway developed to approximate the ‘core’ run of the cost optimising model, MARKAL, for DECC’s analysis for the fourth carbon budget, would meet the UK’s target to cut emissions 80% by 2050, maintain energy security, and save the economy £84/person/year compared to not tackling climate change (see the “analogous to MARKAL” pathway). In the MARKAL pathway, energy use per person in 2050 is half today’s levels; around three quarters of this is due to uptake of more efficient technologies.

However, there are certain costs associated with the move to a low carbon economy, which this analysis does not capture (such as wider macroeconomic impacts and the inconvenience from living in cooler buildings). And, critically, this analysis does not take into account any of the benefits associated with the move to a low carbon economy. These include:-

  • The avoided devastating damages of climate change – the Stern Review estimated this environmental cost at up to 20% of GDP per year globally, a figure that helps contextualise the cost of mitigating climate change, which he estimated to be 1-2% of GDP globally.
  • The benefits of greater energy security. If the UK did nothing to tackle climate change, the proportion of our energy we get from imported fossil fuels will rise from around 23% in 2007 to 53% in 2020 and 88% in 2050, meaning that our spending on net imported fossil fuels would rise from around £10bn today to £32bn in 2020 to £86bn in 2050. This would leave the UK more vulnerable to fossil fuel shortages and price spikes. However, if we meet our 80% target, then by 2050 imported fossil fuels could account for only 7-30% of our energy, at a cost of £8-24bn .
  • Investment in the green economy is a strong driver of economic growth and jobs. The global low carbon market is projected to reach £4 trillion by 2015 as economies around the world invest in low carbon technologies. Investment in renewables, globally, already outstripping investment in fossil fuels. By 2015, over 1 million people in the UK are expected to be employed in the green economy.

Another important caveat to the analysis is that the costs the combination of technologies chosen by the user and does not take into account price interactions between supply and demand.

Attempting to ‘pick’ a single pathway to 2050 by relying on a single model is neither possible, nor a helpful guide in the face of uncertainty. The Government has therefore developed three further ‘2050 futures’ to stress test the MARKAL pathway for changes that we cannot predict in the development, cost and public acceptability of different technologies in every sector of the economy. These three 2050 futures are “higher renewables, high energy efficiency”, “higher nuclear, low energy efficiency” and “high CCS, high bioenergy”. Each of these achieves an 80% reduction in greenhouse gas emissions, maintains energy security and costs £368-499/person/year more than remaining fossil fuel dependent.

There is considerable uncertainty around future costs. The 2050 Calculator therefore allows users to sensitivity test the results for their pathway. Doing so for the three 2050 futures shows that, if fossil fuel prices were high and certain key clean technologies fell rapidly in price, then the 2050 futures could be cheaper than doing nothing. For example:

  • the “higher renewables, more energy efficiency” pathway could be cheaper than doing nothing if oil and gas prices were high ($170/bbl and 100p/therm), domestic insulation were low cost; and electric cars and buses were low cost. * the “higher nuclear, less energy efficiency” pathway could be cheaper than doing nothing if oil and gas prices were high ($170/bbl and 100p/therm), domestic insulation and domestic heating were low cost; and electric and hybrid cars and buses were low cost.
  • the “higher CCS, less bioenergy” future could be cheaper than doing nothing if oil and gas prices were high ($170/bbl and 100p/therm), domestic insulation and domestic heating were low cost; hybrid cars and buses were low cost; biomatter to fuel conversion were low cost; and industrial processes were low cost.

Finally, a selection of independent experts have used the 2050 Calculator to estimate the incremental cost of their pathways over and above doing nothing. They have taken account of the other implications of their pathways, which the Calculator allows users to investigate, such as the impact on balancing, the impact on use of UK land, the impact on air quality etc. The results are:

  • Friends of the Earth (generation from wind, marine renewables and hydro; ambitious demand reduction)
  • The National Grid (wide range of generation sources; moderate demand reduction; considerable bioenergy) £209/person/year;
  • The Campaign to Protect Rural England (offshore renewables, solar, geothermal and electricity imports; ambitious demand reduction.) £359/person/year;
  • Atkins (energy from a range of sources, emphasis on UK self-reliance) £604/person/year;
  • Mark Brinkley, author of the Housebuilder’s Bible, (marine renewable, geothermal and algae supply; some nuclear and CCS) £801/person/year.

You may also wish to see Pathways generated by users