From a recent Our World In Data post,
For the world to transition to low-carbon electricity, energy from these sources needs to be cheaper than electricity from fossil fuels.
Fossil fuels dominate the global power supply because until very recently electricity from fossil fuels was far cheaper than electricity from renewables. This has dramatically changed within the last decade. In most places in the world power from new renewables is now cheaper than power from new fossil fuels.
However, In 2019, around 89% of global primary energy still came from non-renewable technologies. In fairness, New electric generating capacity in 2020 will come primarily from wind and solar, but that's for the United States. My question concerns the whole world.
So here's my question: if renewable energy is actually cheaper than non-renewable energy, why are people still worried about climate change? Doesn't basic economics predict that when a product becomes cheaper than another product it can substitute for, then people will adopt it? Unless adoption trends are extremely slow, wouldn't this news mean we have essentially already solved climate change, and all that's left is simply for market forces to replace existing non-renewable energy sources with cheaper renewable sources?
I suspect one of four things must be true,
- Adoption trends are actually extremely slow perhaps due to the large fixed cost of developing new energy plants
- Renewable energy cannot completely substitute for non-renewable energy, due to issues with storage. In this case, is there any price such that people would switch to renewable carbon-neutral energy sources? Also, where can I find the cost estimate for renewable energy sources, when you include costs for storage?
- The cost estimate of renewable energy given by Our World In Data is incorrect
- The world will probably be carbon neutral by mid-century.