In the book How to Avoid a Climate Disaster, Bill Gates begins to address the issue of how much it will cost to achieve “zero” greenhouse emissions and introduces his concept of “Green Premiums.” Ultimately, to achieve zero carbon emissions, Gates argues that the goal is to reduce Green Premiums so that carbon reducing solutions can be adopted in an economical way.
After finishing the book, the reader is left to wonder about prioritization, costs and where we should apply R&D dollars first. While Green Premiums are a good start, they are only partially helpful because they do not quantify carbon reduction costs by industry or process. Without a mechanism to calculate and compare costs by industry, the book leaves a gap in what otherwise could have been a clear call to action.
What we need, and what is suggested in this paper, is a “Carbon Elimination Price” by industry. A Carbon Elimination Price could help us prioritize decarbonization efforts so that we achieve zero carbon emissions at the lowest cost and the most efficient use of limited R&D dollars. The paper includes illustrative examples that show how Carbon Elimination Pricing would be calculated. As an example, the paper demonstrates how focusing efforts on electric vehicles could result in a net savings, while other forms of transportation such as ships or airplanes have a much higher Carbon Elimination price.