We measure gains from phasing out coal as the social cost of carbon times the quantity of avoided emissions. By comparing the present value of benefits from avoided emissions against the present value of costs of ending coal and replacing it with renewables, our baseline estimate is that the world can realize a net gain of $78 trillion. A way to reap this huge gain is to strike a Coasian bargain – as a complement to incomplete carbon pricing – to provide blended financing to replace coal with renewables. We quantify requisite climate financing for supplanting coal with renewables across the world.

The main result of the paper can be explored in this page. Additionally, you can explore the climate financing needed to phase out coal by country or region, or as an annual timeseries. Feel free to pick your own parameters to generate the results (the parameters are set to the baseline settings of the paper by default).

  75 USD/tCO2

Result

Present value of benefits of phasing out coal (in trillion dollars) 106.92
Present value of costs of phasing out coal (in trillion dollars) 29.03
       Opportunity costs (in trillion dollars) 0.05
       Investment costs (in trillion dollars) 28.98
Carbon arbitrage (in trillion dollars) 77.89
Carbon arbitrage relative to world GDP 1.2 %
Carbon arbitrage (in dollars) per tonne of coal production 125
Carbon arbitrage (in dollars) per tCO2 55
Total coal production prevented (Giga Tonnes) 623.62
Total emissions prevented (GtCO2) 1425.55
Further temperature increase — on top of 1.1 ℃
already observed — prevented
2.14