A low carbon economy (abbreviated as LCE) is a system that focuses on reducing greenhouse gas emissions, primarily focusing on the finances of energy production. However, other major sectors, including heavy manufacturing, logistics, and housing, also come under the scope.
The lexical item was initially brought to prominence during the Kyoto accord of ’92, which effectuated the UNFCCC’s objectives to confront the menace of planetary overheating. It was subsequently perpetuated with the Paris Agreement in 2015 and the COP26 Summit in Glasgow in 2021.
Is It Economically Viable in Today’s World?
Any further investment in a coal-fired power plant or an oil field to benefit an urban sprawl is a commitment to emitting carbon for decades.
A recent analysis by the World Economic Forum revealed that the mean expense associated with electrical power derived exclusively from wind and solar sources had witnessed a dramatic drop of 70% over the last decade.
It costs just $78.6 to produce 1 MWh of electricity. Comparatively cheaper than the equivalent coal amount, which costs $109. So why pollute the land, air, and water when we can instead harness them ecologically to get cheaper electricity?
Additionally, the COP26 Summit has made it adamant that entities that contribute to excessive carbon emissions shall be levied heavy taxes in the coming years. As electrified automobiles proliferate across our thoroughfares, the necessity for unpolluted electrical power shall surge even further.
Thus, adapting to a sustainable alternative becomes a need of the hour. Especially, when you consider that resources are rapidly depleting and renewable energy sources largely remain untapped.
Benefits of Switching to a Low Carbon Economy
In addition to the conspicuous ecological benefits, a carbon-neutral economy could engender several favorable transformations within our collective populace. A few notable ones are below:
Ease of formulating economic policies
With a low carbon economy in place, governments will have breathing room to focus on other economic policies since they are not dealing with the fallout of massive disasters.
As per Munich Re, the annual economic losses worldwide amounted to $280 billion in 2021. Preserving such funds for other crises would help ease the burden on various departments. Other factors, such as supporting SMEs and increased employment, also paint a brighter picture for the future of any country.
Lower health risks for the vulnerable
A low carbon environment can help reduce pollution-related health complications. As per the estimations by the World Health Organization (WHO), the maleficent consequences of air pollution culminate in excess of 4.2 million fatalities annually, disseminated across every corner of the globe.
School children below seventh grade and people above 60 are more vulnerable. This can mean reduced stress on a nation’s medical infrastructure, preparing them for other medical emergencies. In addition to physical health, reducing carbon would also mean better mental health and more productivity, which neatly segues to our next point.
Furthermore, not just outdoor air pollution but indoor air pollution is also a leading cause of death, especially in developing countries. Fumes from cooking on open fires lead to smoke inhalation and respiratory diseases. So if we achieve a low carbon economy, we will save the environment and countless lives.
New entrepreneurial ventures
Investment in greener energy resources can bring about new opportunities for businesses to explore. This is not only limited to setting up wind turbines and solar farms but also their promotion, establishment, and development in third-world countries.
Such energy resources go against the accumulative capitalist systems that allow the regimes with fossil fuels to thrive while other countries become dependent on them. Going carbon neutral can open up employment opportunities for over 43 million people by 2050, according to IRENA’s World Energy Transition Outlook. The opportunities can be even more if the transition takes place faster.
Research into future fuels
Not many people realize this, but the dominance of fossil fuels hampers the development of cleaner alternatives. The taxes and excise duties eat up the funds that would otherwise go towards researching and developing greener applications.
With a low carbon economy, those funds can be dispersed to the scientific community to bring more ways to harness electricity from greener sources. Other benefits can also arise from tidal energy, geothermal energy, and synthetic fuels like ethanol. There are many other other avenues of future fuel that are yet to be explored.
Improved energy security
As mentioned before, a carbon-neutral economy would free us from the shackles of volatile fossil fuel prices. In addition, it would also help reduce our reliance on other countries for energy imports. It’s beneficial economically and strategically, as we would not have to worry about another country choking our energy supply in case of a political tussle.
How Do You Build a Low Carbon Economy?
The formidable Sustainable Development Goals (SDGs) formulated by the United Nations present a veritable cornucopia of possibilities for establishing a blueprint to achieve a low carbon economy. The goals were set in 2015, covering a wide range of topics, from climate change to gender equality. Achieving them would require a lot of effort, but it is possible with the right amount of dedication and cooperation.
We also need to discover ways to make clean energy more affordable. One way to do that is by increasing research and development into renewables. The government can also help by implementing policies that favor clean energy over fossil fuels. Lastly, we need to educate people about the importance of a carbon-neutral economy. When more people will be aware of this concept, they can help make it a reality.
Additionally, reduced dependence on fossil fuels is the most important way to achieve a low carbon economy. The other related ways are –
- developing and deploying low carbon technologies,
- reducing deforestation and forest degradation,
- encouraging afforestation and reforestation,
- managing wastes properly,
- proper urban planning,
- modifying lifestyles, and promoting eco-tourism.
Similarly, taxes on carbon emissions and subsidies for clean energy have already been established to motivate governments and businesses. Programs including EVs and other low or zero-emission vehicles in the public transportation sector can also help.
Notable Examples
It is already being demonstrated in India, with metropolises like Mumbai, Chandigarh, and Delhi supplementing their bus fleets with electric versions. India has become the hotspot for renewable energy investors in recent years.
We have also seen some radical examples in the private sector, like innovations in hydrogen fuel cells. Using cleaner power sources like Uniper biogas plants in Germany motivates others to follow the suit of electrolysis. The Empire State Building in Manhattan is now running on 100% wind-generated power.
Moreover, China has pledged to become carbon neutral by 2060, leading various indigenous power companies to invest in hydroelectricity in the coming decades.
Moreover, Ørsted, which initially was one of Europe’s most carbon-intensive utilities, has now transformed into a global green energy leader. Ørsted also became the first organization to obtain Climate Transition Pathway (CTP) accreditation.
It has reduced emissions intensity in its operations and energy production by more than 87% since 2006. The company has now advanced into its next stage of decarbonization, the supply chain, in sync with its 2040 net-zero objective.
Countries are making efforts towards low carbon economy
It’s not just businesses that are playing their part – cities, and countries are, too. Scotland aims to produce 50% of its power demand from renewable sources by 2030. Further, Scotland seeks to decarbonize the nation by 2050 to reach the goals set by the Paris Agreement. These are just some examples of how different entities are working together to achieve a low carbon economy.
In 2018, Costa Rica ran on 100% renewable energy for 300 days. This was their fourth year in a row when they used only renewable energy to produce 98% of their energy demand for almost a year.
Other countries like Sweden, France, Denmark, New Zealand, and Hungary have pledged to cut down their carbon use to zero by 2050. Also, Norway is working towards being climate-neutral by 2030.
These are just a few specimens of the progress made in recent years. With the right mindset and policies in place, we can achieve a zero carbon economy within our lifetimes.
The time to act is now
The world is at a crossroads. We can either continue down the path of destruction or build a low carbon economy and save our planet. The choice is ours, and it is up to us to make the right one.
The main push to put in more effort comes from accepting the fact that our Earth is at its 11th hour and understanding the chance a sustainable economy can grant to our future generations.
After all, in the words of John Madison,“it is not that we have inherited this planet from our forefathers; we have borrowed it from our grandchildren.”
To conclude, we still have a long way to go before transitioning to a low carbon economy. The better we understand and make those in power aware of it, the quicker we can steer the world’s environmental and economic conditions toward a sustainable path.
