The world needs a shift as radical as the Industrial Revolution to cut greenhouse gas emissions by 2050, while safeguarding economic growth, the McKinsey Global Institute said on Thursday.
Its study said that a modern “carbon revolution” to curb global warming would require a tenfold rise by 2050 in the level of economic output for every ton of greenhouse gases emitted, mainly by burning fossil fuels.
“This is comparable in magnitude to the labour productivity increases of the Industrial Revolution,” the 48-page report said. The institute is the economic research arm of consultants McKinsey & Co.
The study estimated that the world needed to produce $7,300 of gross domestic product (GDP) for every ton of carbon dioxide emitted by 2050, up from a carbon productivity rate of $740 now.
“Increasing carbon productivity tenfold in less than 50 years will be one of the greatest tests humankind has ever faced. But both history and economics give us confidence it can be done,” it said.
Most technologies were already available, ranging from better building insulation to cleaner coal generation, to axe world emissions of greenhouse gases by 64 percent by 2050, or to 20 billion tonnes a year from 55 billion in 2008, McKinsey said.
Such cuts are far stiffer than those considered by most nations. The Group of Eight leading industrial countries, which will meet in Japan next month, are considering a goal of a 50 percent cut in world emissions by 2050. The United States and Russia have opposed such a goal in the past.
The study estimated that the costs of a “carbon revolution” were likely to be “manageable”, at about 0.6 to 1.4 percent of global GDP by 2030. Large amounts of the costs could be raised by borrowing, muting any impact on growth.
The cost estimates are in line with those by the U.N. Climate Panel last year, which said rising temperatures would spawn ever more heatwaves, more powerful storms, droughts, a spread of deserts and rising sea levels.
But the McKinsey study said that the pace of change would have to be faster than during the Industrial Revolution in the late 18th and early 19th centuries. It noted that labour productivity rose tenfold in the United States between 1830 and 1955. “The tenfold increase in labour productivity was achieved over 125 years; the carbon revolution needs to be achieved in only 42,” it said.
The study also indicated that the world could make big savings in energy use with measures such as improving insulation of buildings. New technologies, such as ways to bury carbon dioxide from coal-fired power plants in countries from China to the United States, could also help clean up emissions.
McKinsey said that the world should also invest more in research and development, perhaps up to $80 billion a year by 2050. And it said the attitudes of both managers and consumers had to change, partly by sharing new clean technology. India and China, for instance, now use about 20 percent more energy to produce a ton of steel than the European Union or Japan.
Among other recommendations were to slow deforestation and plant more trees — plants soak up carbon dioxide as they grow.
(Editing by Diana Abdallah)
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