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Green New Deal: How much does fixing climate change cost the US?

A real-world argument with numbers you can check for yourself.

What no one who is trying to lampoon efforts at a Green New Deal will admit, is that once you have spent [the associated infrastructure costs], we’ll have much lower, very predictable, costs of energy for the 20–30 years all of those new machines will last.

Here, as usual, I’ll focus on the energy side of climate change. That’s about 80% of the problem. The other 20% is agriculture, industry, waste and land use — dominated by the methane emissions of the meat sector, cement and steel production, and landfill emissions. So as not to let perfection be the enemy of good we are only going to look at the energy side of the equation. We’ll address this tougher 20% in future pieces.

How do we decarbonize?

The short version of how we decarbonize is through massive electrification — of nearly all transportation and of nearly all heat for buildings and industry. That electricity will come from wind, solar, hydroelectric, and nuclear. The details of the balance of those technologies will be determined by largely local factors that include climate (local annual temperatures), local renewable resources (solar, wind, biomass, hydro), politics (of nuclear for example), and even cultural issues like preferred architecture and urban design preferences.

So what does it cost?

My calculation notes for this article.

2.1 Transportation (demand side):

There are 263M vehicles in the US. The only difference in cost between electric and gasoline vehicles is the cost of the battery. Otherwise, they have four wheels, a motor (electric or internal combustion), seats and a steering wheel, and all the little luxuries and cup-holders. Let’s assume they all will be electric. They will use about 300Wh/mile, and they will all have a 250-mile range. They will each need a (300x250) Wh battery. That’s 75,000 Wh or 75 kWh. Today’s batteries are roughly $200/kWh. By 2025 it is widely believed that they will cost out at $100–150/kWh. At $125kWh that pencils as (75x125) = $9,375. Let's call it $10,000 per vehicle. Multiply by 263 million vehicles, and it pencils out at $2.6 Trillion dollars.

(1) 263 (million vehicles) X 300 (Wh/mile) X 250 (miles range) X $125/kWh = $2.6 Trillion.

2.2 Heating and Cooling (demand side):

2.2.1 Residential:

Cooling is all done today using refrigerators (and their close cousins, air conditioners) running on electricity. Space and water heating is nearly all done with natural gas. We won’t capture the distributed emissions from natural gas in homes, so sequestration is off the table. We need to electrify that heat. Heat pumps (also cousins of refrigerators) can routinely do this now, and lower the primary energy required to heat a house by 3X. Heat pumps are the cooling mechanism in refrigerators, but they can also create heat (they actually work by creating heat and cooling simultaneously). There are 128,000,000 homes in the US with an average footprint of 2,012 sq.ft. Converting to radiant hydronic heat (considered by all experts to be not only the most efficient but the most comfortable and least allergenic) costs around $8/sq.ft including the cost of installing the heat pumps. That’s $16,000 per home or 2 Trillion dollars for the entire US housing stock. Incidentally, you can store a lot of energy in hot water (and in cold). If we added two days’ worth of thermal storage to each home (something the size of 2 large water heaters, or a hot tub), we would create another grid-scale battery of approximately 6 TWh (50kWh*120,000,000 homes). Like our cars, this is an enormous load that we can shift and use as a battery to balance a renewables-heavy grid. This thermal storage will be cheaper than batteries at an estimated 1–2c/kWh and is rolled into the $8/sq.ft. estimated above.

(2) 128 (million homes) X 2012 (average square footage) X $8 (per sq.ft. for hydronic heat pump heating plus storage) ~ $2 Trillion.

2.2.2 Commercial:

There are 5.6 million commercial buildings that cover 87bN square feet. There are advantages at scale of heating and cooling these buildings relative to residential buildings, and not all commercial buildings need to be heated or cooled. For economy-scale estimation purposes, we can ballpark that these installations will be cheaper than residential at something closer to $4/sq.ft. That pencils out at about $350bN ($0.35T) and another 1–2TWh storage opportunity.

(3) 87 (billion square feet of commercial buildings) X $4/sq.ft ~ $0.35 Trillion

2.3 Solar on every roof (supply side):

(4) $1.30 (per installed Watt) X 128 (million homes) X 15 (kW) ~ $2.5 Trillion

2.4 A battery in every home (supply and demand):

Imagine that we already have installed a copious amount of storage capacity in the cars and trucks and water and space heaters of the above clean future. People get anxious about electricity black-outs the same way we get range anxiety with EVs, or nervous about our cellphone batteries lasting through the day. To address this, we’ll add 24 hours of storage for the electrical load of each home in addition to all of the above. This amounts to a 30kWh battery on average. Using the same $125/kWh costs as above, this is a $3,750 battery. 128 million of them will cost $450 bN or $0.48 T. This is yet another 3.6TWh of storage for the whole grid.

(5) 30 (kWh) X $125 (dollars per kWh) X 128,000,000 ~$0.5 Trillion

2.5 The rest of the electricity (supply side):

The US currently uses about 3.5TW of primary energy of all kinds. As we’ve discussed in Green New Deal: The enormous opportunity in shooting for the moon, we need less than half of that if we sign up for massive electrification. That means we need about 1.75TW. We’ll round that up to 2TW to account for growth and so that no-one can accuse us of underbidding. We already get 0.5TW of that from the solar on every roof as described above. The other 1.5TW we need to generate without also generating carbon emissions. Realistically the lion’s share will come from wind, solar, nuclear, and hydroelectric. Wind and solar both cost around $5/all-day-watt installed. This is a number that roughly factors in their $/W cost and their capacity factors.

(6) 1.5 (TerraWatts) at $5 (/ W) = $7.5 Trillion

2.6 Transmission and distribution (supply and demand):

We have to move all of that electricity around. The grid currently delivers close to 0.5TW. We now will have closer to 1.5TW running over it. We know from the current crop of wind and solar installations that about 10% of the project cost is the cost of transmission and interconnection fees from the remote industrial sites to the grid. We can thus assume a ballpark 10% of 7.5 Trillion dollars = $0.75 T for the new grid capacity to be bought to our homes and businesses. Almost certainly this number is conservative (high) as much more of the grid will be used bi-directionally, and therefore more efficiently, with the generation closer to the consumer than the average industrial wind or solar plant.

(7) 0.1 (10%) of 7.5 (trillion dollars of new capacity) ~0.75 Trillion dollars

3. What we have and haven’t included in the above numbers:

We have generated enough energy above to meet all of the energy demand of the US (and in fact allow for the total energy equivalent to increase by 15%). We have implicitly included a few days’ worth of storage which is enough to deal with most of the intermittency problems of solar and wind. We have replaced every car and retrofitted every home and commercial building so they can be carbon free. We have generated all of the energy with low and no- carbon sources.

4. So how much does it cost?

(I rounded up everything to the nearest significant digit. Too many significant digits really bothers me with its pretense at accuracy.)

16.2 Trillion dollars in total.

Let’s add a little bit more into our budget to deal with the harder problems in the industrial sector like cement and cost-effective carbon-neutral biofuels.

OK, maybe $20 Trillion.

I don’t know how anyone can defend a price tag of $100 Trillion.

It’s worth mentioning that the country that wins the race to build the infrastructure to manufacture all of these systems will have an advantage in the global economy to come.

$20 Trillion still seems like an impossibly large amount of money. Remember, however, that every machine has a lifetime and a replacement cost. We can use the opportunity of the replacement of each of those machines as not only a chance to upgrade our lives and decarbonize, but as an effective discount on the cost of this project. The 100 Trillion dollar estimate assumes you will still be buying everything you do today, as well as everything you do tomorrow, whereas you’ll only be buying one of those things. If you are replacing your roof shingles anyway, installing solar will be cheaper at that moment. If you are replacing your furnace and hot water heater anyway, those costs offset the upgrade to zero-carbon heat pump technology. When you are going to purchase a new car anyway, the only real difference between an electric vehicle and one with a fossil fuel engine is the price of the battery.

It is a reasonable argument to say that the US manufacturing buildup for WW2 was a bigger generator of jobs (and jobs that sustained) than the New Deal. Freedom’s Forge: How American Business Produced Victory in World War II details the WW2 buildup.

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Saul Griffith

Founder / Principal Scientist at Otherlab, an energy R&D lab, and co-founder/Principal Scientist at Rewiring America, a coalition to electrify everything.