McKinsey climate change study

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McKinsey – a major consultancy – has released a report (PDF) on the costs of reducing greenhouse gas emissions in the United States. The general conclusion is a familiar one: that existing technologies and emerging technologies with a high probability of success can collectively reduce emissions by a very considerable degree at modest cost. Specifically, the study argues that 3.0 to 4.5 gigatonnes of CO2 equivalent can be averted by 2030, at marginal costs of under US$50 per tonne. Business as usual would see present emissions of 7.2 gigatonnes grow to 9.7 gigatonnes by 2030: almost twice what the whole planet can handle.

The executive summary linked above is well worth reading, as it is rich with detail. It stresses how abatement will not happen through a few big changes: many thousands of emitting activities must be incrementally reformed. That said, 40% of the abatement they describe would actually save money in the long term (for instance, by replacing existing systems with more energy efficient varieties).

Perhaps the most interesting element in the whole report is the abatement curve on the fifth page of the executive summary. It ranks a collection of mitigation activities from those that produce the highest level of economic benefit per tonne to those that are most costly. For instance, increasing the efficiency of commercial electronics could save $90 per tonne of CO2 equivalent. Other win-win options include residential electronics, building lighting, fuel economy standards for cars and trucks, and improvements to residential and commercial buildings. Cellulosic biofuels are net winners, though of a lesser magnitude, as is changes to soil tillage to boost the strength of carbon sinks. The most expensive abatement options include carbon capture and storage, the use of solar electric power, and the use of hybrid cars (the single most expensive option listed).

This is quite an encouraging view. Achieving substantial reductions within a developed economy for under $50 a tonne is promising in itself. It also suggests that international abatement prices could be even lower, given how insane things like tropical deforestation are from an economic perspective, once climate change is taken into account.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

5 thoughts on “McKinsey climate change study”

  1. It is surprising that hybrid cars are so economically ineffective.

    Are plug-in hybrids much better?

  2. Saying that hybrid cars cost $50 per tonne of CO2 avoided isn’t as damning a criticism as it might seem. Hybrids have other advantages, and $50 a tonne might be an acceptable price once cheaper opportunities have been capitalized upon.

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