The change in services and transportation could generate $2.3 trillion annually for the American economy
NEW YORK, Aug. 05, 2024 (GLOBE NEWSWIRE) — A new financial analysis by Siebert Williams Shank (SWS) finds that the projected capital costs of the clean energy transition, while high, will be a worthwhile investment that can generate economic returns he is great. benefits in the United States.
The 112-page study estimates that although the basic cost of electricity conversion could be $10 trillion over the next 30-50 years, the financial benefits to the US economy could end up being more than $2.3 trillion annually.
“A clean energy transition translates into a step-change opportunity for job creation and broader prosperity in America and the world,” the SWS report says.
The analysts behind the report echoed those sentiments in a recent “In Conversation with SWS” podcast, where they delved into the findings.
According to the report, the estimated replacement cost of $10 trillion for the US electricity infrastructure equates to an average of $331 billion per year for the projected 30 years. This level of investment in electricity infrastructure for industry only represents about 0.8% of annual GDP in 2023 with the share decreasing to a share of 0.4% as the economy grows by 2.1% annually and year until 2053.
The report says: “Really, an average of 0.5% of annual GDP over decades is not so great as to call for such a significant change in the economy.”
SWS’s clean energy transition report is somewhat unique in two ways. First, while such reports focus on the overall costs for all sectors during the transition, the SWS analysis clarifies the effects of the transition for the electricity industry specifically. The report examines two sectors: utilities and transportation, which collectively represent about 65% of US carbon emissions.
Second, the report focuses on economics rather than climate change. Discussions in the media often frame the clean energy transition as a debate over its effectiveness in combating global warming. There is rarely a discussion of the full economic impact of a proposed change without the potential reduction of carbon emissions to the environment.
“Our analysis tells us that the transition to clean energy is a worthwhile economic endeavor. “There is no need for the weather or the attitude of the government,” the report says.
It continues, “While the reform began as a solution to the problem of climate change, we believe it now stands alone as an economic reform that will lead to greater public prosperity that all of America can support.”
SWS analysts maintain that the clean energy transition can be largely achieved without large government incentive programs, carbon caps/taxes, or even the New Deal.
The transition economy should be self-sustaining in general due to the 200% electricity demand/use growth expected over the next few decades with a few notable transition exceptions. of technology, according to analysts.
According to the report, the increase in the demand for electricity in the US is likely to be a staggering number in the next 30 years due to the adoption of EV, including in the general electric industry, AI, digital growth, and the growth trends of the economy as a whole.
Most utilities today report that significant growth comes from new large data centers, new semiconductor manufacturing, and related business activities. EV adoption will prove to be a bigger contributor to electricity consumption/demand growth in the coming decades.
Estimates in the report suggest annual savings in the billions of dollars in the American economy from the transformation of the electricity and transportation industries alone. In addition, this change can provide savings per person of $5,000-$7,000 per year, due to the avoidance of fuel costs for daily driving, electricity generation and household transportation. .
Other invisible external costs are avoided through much lower health care costs, reduction of water pollution and its costs, reduced wear and tear of complex equipment, and from corrosion, car paint and at home, etc.
SWS analysts believe the clean energy transition will take decades to fully achieve. In their opinion, focusing too much on the date 2050 – the goal of the Intergovernmental Panel on Climate Change to achieve high emissions – is not good, not only because it is unrealistic, but also because it leads the skeptics to ignore the gas reduction efforts that are urgently needed.
To accelerate change, the US needs more constructive communication, better consumer education, and improved legislative, regulatory, and regulatory policies that will remove challenges to change, facilitate change, and develop more support from to the general public.
The report says: “We believe that government subsidies are unnecessary. “Most of what we need is an overhaul of the practices and policies that are essentially liberal.”
With offices in New York, NY and Oakland, CA, SWS is an independent financial services firm providing investment banking, sales and trading, research and advisory services. Its mission is to exceed expectations with high quality results and leave a lasting impact on the sectors, businesses and communities it serves. SWS counts 74 Fortune 100 companies among its clients.
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CONTACT: Media Contact: Thomas Butler – tbutler@butlerpr.com – 646-213-1802 Nick Eilerson – neilerson@butlerpr.com – 646-205-7627
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