How Wright’s Law Can Right The Climate


Although America’s Inflation Reduction Act is a historic accomplishment in and of itself, the consequences it will have on the world economy will be its biggest upside. In the end, it will cost considerably less for all nations to reduce their own emissions at the pace and scale required to slow global warming.

Cutting missions 

The United States is essential to maintaining a livable planet as it is the second-largest emitter of greenhouse gases in the world. And the United States has strengthened its credibility just in time for the United Nations Climate Change Conference (COP27) in Egypt with the newly passed Inflation Reduction Act, which allows hundreds of billions of dollars toward decarbonization. America is now in a good position to meet its target of cutting emissions in half from 2005 levels by 2030. While the IRA’s provisions have the potential to reduce US emissions by up to 43% by 2030, any remaining gap can be made up by additional EPA regulations and more aggressive state-level action, like what we have seen this year in California.

Historic accomplishment

Although the IRA is a historic accomplishment in and of itself, its greatest advantages will be seen in the form of worldwide economic ripple effects.

In the end, it will cost considerably less for all nations to reduce their own emissions at the pace and scale required to slow global warming.

Of course, the US still needs to adhere to its other climate commitments, not the least of which is to pay the $11.4 billion per year (a pittance in comparison to other US spending) that it has promised to contribute to global south mitigation and adaptation efforts.

Contrary to popular belief, Wright’s Law predicts that large-scale domestic investments in clean technologies by the US and the EU will be substantially more useful than any direct financing they offer.

Wright’s Law, so named after the American engineer Theodore Wright who first observed it in the 1930s, states that every cumulative doubling of a technology’s global production will result in a constant percentage reduction in cost.

Additionally, the cost of solar, wind, batteries, and electrolysers has significantly decreased as their global output has expanded, according to new research from the University of Oxford.

Clean energy

But even more significantly, the researchers found that Wright’s Law holds true even after an innovative technology has achieved high levels of market maturity.

For example, our modelling at Energy Innovation shows that these government investments could add 1,053 gigawatts of new wind and solar energy to the US grid, making it 85% clean in just eight years.

Likewise, the law’s new electric vehicle (EV) tax credits could ensure that roughly one-third of all new passenger cars and heavy-duty trucks sold in the US are electric by 2030.

Moreover, the IRA’s public investments will unlock several times as much private capital.

Add in Europe’s investments and China’s massive push into clean energy and EVs, and the annual deployment of innovative clean technologies is poised to explode.

Green investments

In addition to reducing emissions in the world’s largest and most highly polluting economies, the exponential growth in clean technologies will make it dramatically cheaper for the rest of the world to transform their energy systems.

In fact, we have already seen this dynamic playing out.

Green investments by Germany and California at the start of the last decade helped reduce the costs of solar by 85% and of wind by 56% between 2010 and 2020.

Similarly, EV demand in China has helped slash battery costs by 89% since 2010.

For its part, India has capitalised on these falling costs by designing clever power auctions that result in the lowest utility-scale solar-power prices in the world.

As the decrease in costs accelerates, countries across the Global South will be able to exploit the benefits of Wright’s Law through bold policies to decarbonise cars, cooling, and electricity.

High-decarbonisation policies

Energy Innovation’s modelling consistently shows that ambitious clean-energy policies expand economies and create jobs, while also improving air quality.

Even before the IRA, research found that India could save more than 60 trillion rupees ($752 billion) by 2050 if it adopts high-decarbonisation policies.

In low- and middle-income countries, such policies can elegantly leverage US and EU investments at no cost to governments beyond enforcement and can prevent a country from becoming a dumping ground for polluting vehicles and equipment.

Understanding Wright’s Law can help reframe the North-South dialogue at COP27.

The less expensive climate action becomes, the greater our chances of maintaining climate stability.

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Source: Eco-Business


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