The Global View

Cost to meet greenhouse gas reduction targets €41bn… or £20 each

MoneyWhat can you get for £20 these days? So far a quick web trawl has unearthed a Sony MP3 player or a cheap date – pizza and a beer – these were the only decent options.

However, a new report by McKinsey & Company, presented at the Siemens Media Summit might have just come up with a winner. Hold with me whilst I do a charity advert blurb… Just £20* and the Kyoto (12 pc by 2012), EU (20pc by 2020) and national (30pc by 2025) reduction in greenhouse gas targets will be met and bettered – bargain.

The study has been billed as the “first comprehensive analysis of costs and potentials of greenhouse gas abatement technologies in a city”. It states:

Until 2025, an incremental total investment of around €41 billion – an amount less than one percent of London’s total economic output – would be needed to implement all the identified technologies to reduce carbon emissions – enabling London to meet its Kyoto target (-12 percent by 2012), the EU goal (-20 percent by 2020) as well as national target (-30 percent by 2025). This amounts to less than €300 per inhabitant per year, around half of the average Londoner’s annual bill for gas and electricity.

Greenbang’s figures do differ slightly due to a smaller supposed populations but it’s still very close fairly close.

And it gets better.

Almost 70% of the abatement potential is made up of technology levers that would collectively provide net savings of more than €1.8bn per year by 2025 to the investors

Overall, investments of roughly €20 billion would be necessary. Nearly 90 percent of these pay off for those making the investment decisions.

So theoretically at least Londoners should be able to pay the government £20 per month now and, in return, get a less damaged climate and £2856 back in 2025.  Ok, maybe it’s not quite that simple, but invested wisely it might not be that far off.

Greenbang’s extrapolation maths:

*€41 billion divided by 7.5 million inhabitants = €5466

€5466per Londoner divided by 17 years (2025) = €321

€321 divided by 12 months €26

€26 at the quoted exchange rate 0.7919 = £20.