We’ll Always Need Paris
Faced with rapid cost reductions for clean electricity generation, some commentators suggest that we no longer need the Paris agreement or other policy interventions, because technology alone can solve all problems. But that is a utopian delusion, for three reasons.
LONDON – President Donald Trump’s decision to withdraw the United States from the Paris climate agreement is deeply regrettable and based on flawed economic analysis. But unstoppable technological progress, plus determined action by other countries, companies across the world, and American cities and states, will ensure that Trump does not derail progress toward a low-carbon economy.
Trump claimed that the Paris accord would cut US GDP by $3 trillion by 2040. But the study he quoted absurdly assumes that American emissions reductions would be unmatched by action in other countries. Crucially, too, it ignores the technological revolution now transforming the economics of electricity generation.
In just seven years, wind power costs have fallen by over 65%, and solar costs are down almost 90%. In favorable locations, onshore wind and solar companies are now winning power delivery auctions at prices as low as $0.03 per kilowatt hour (kWh), easily outcompeting fossil-fuel energy producers. Offshore wind costs are also falling far faster than anticipated.