NEW YORK U.S. citizens will not have to drive less or read in the dark to slash greenhouse gas emissions by 2030, but they will have to buy more efficient cars and appliances, a report from two business groups said on Thursday.
"You may have different lightbulbs, and your car may be made of different materials, but basically we've assumed that consumer lifestyles stay constant," Jack Stephenson, a director at McKinsey & Company, a business consultant group told reporters on a teleconference call from Washington.
McKinsey published the report called "Reducing U.S. Greenhouse Emissions: How Much at What Cost?" with The Conference Board, a research group.
The United States could reduce projected 2030 emissions of greenhouse gases by between one-third to one-half at manageable costs to the economy, the report found. Its mid-range case found that cutting 3 billion metric tons of carbon dioxide equivalent from the United States by 2030 would cost an average about $50 billion annually, or a total of $1.1 trillion.
That would represent 1.5 percent of the $77 trillion in real investment the U.S. economy is expected to make over the period, it said.
The effect on the economy of cutting greenhouse gas emissions is being mulled in the U.S. Congress where a Senate committee is considering the top bill that would regulate the gases blamed for global warming.
About 80 percent of the reductions could be made using technologies already proven in the United States or elsewhere in the world, the report said.
POWER SECTOR TO BEAR BRUNT OF COSTS
The cheapest way to cut emissions would be making appliances and buildings more energy efficient, through methods like better heating and air-conditioning and more insulation, which could save 710 to 870 million metric tons of the gases.
The next cheapest way could come from more efficient cars and from biofuels, the report said, which could cut emissions by 340 to 660 million metric tons.
The priciest sector to change would be power plants through technologies such as capturing and entombing carbon dioxide from coal-fired power stations, which could save 800 million to 1.57 billon metric tons of emissions.
"We recognize that the costs will be distributed unevenly," Ken Ostrowski, a McKinsey director, said in the teleconference.
He said the power sector may need to make investments representing about 90 percent of its current market capitalization. The costs, however, could eventually be offset by harnessing fuels that are low-cost or free after initial investments, such as wind and solar power.
The report did not consider how any increased power rates resulting from the changes could be balanced so they would not hit poor consumers unfairly.
Policy support and private sector innovation would be necessary to jump-start the changes, it warned.
"The winners will be the folks that don't resist change, but look at ways to apply innovation and ingenuity to capitalize on the migration toward a lower carbon economy," Ostrowski said.
(Editing by Marguerita Choy)