The True Cost of Fossil Fuels: Saving on the Externalities of Air Pollution and Climate Change

This brief quantifies air pollution and climate change externalities related to fossil fuels, along with the extent these can be reduced with higher uptake of renewables. The analysis compares global energy demand between now and 2030 through two cases: first, based on current and planned energy policies and second, by doubling the share of renewables in the energy mix within 15 years. The reduction of pollution and climate impact through rapidly increased use of renewable energy by 2030 could save up to USD 4.2 trillion per year worldwide, which is 15 times the associated costs of doubling the share of renewables. However, today’s energy do not adequately value climate impact or air pollution, according to the authors, and energy and environmental policies need to correct for these externalities