The world economy continues to reduce its carbon footprint. According to an analysis by Goldman Sachs, photovoltaic power plants and onshore wind farms will contribute more energy globally within the next five years than U.S. shale oil did in the five years previous.
Between 2010 and 2015, U.S. shale oil fueled the world and its economy with 5.7 million barrels per year. Solar and wind energy is set to power the global economy with the equivalent of 6.2 million barrels of oil between 2015 and 2020, according to Goldman Sachs' report.
An earlier market turn than predicted
Most analysts believe that between 2030 and 2050, renewable energy production will reach its watershed moment, as many countries have agreed to shift toward alternative energy by that time, according to 2015 United Nations Climate Change Conference agreements. Currently, China is set to add 23 gigawatts of coal capacity and 40 GW of gas power capacity by 2020. However, during that same time the country will increase its wind and solar power by 193 GW of capacity, as reported by Goldman Sachs.
The Low Carbon Economy report estimated that the green industry's annual profits are currently $600 billion.
Wind and solar installations are expected to surpass a capacity of 100 GW worldwide by 2020. Twenty-five million hybrid and electric cars are expected to be sold by 2025, a daily sell rate 10 times higher than 2015 daily sell numbers. Goldman Sachs estimates the cumulative emissions reduction will equal 1 gigaton of carbon dioxide per year.
Low-carbon technologies expected to have the largest effect on the market will be solar plants, onshore wind farms, hybrid and electric cars and energy-efficient LED light bulbs. According to the report, 60 percent of light bulbs installed around the world will be LED.
It's easier to go green
Green industry tax incentives will aid the auto industry in transitioning, more so than if carmakers were to ignore or refuse credits. Volkswagen was revealed to be faking its car performance results in November 2015 for cars sold in the U.S. The auto manufacturer is facing hefty penalties from the Environmental Protection Agency. The company can be sued by the EPA for up to $18 billion for manipulating results.
In December 2015, the U.S. Congress extended its tax credit program for companies integrating renewable energy systems into their current power grid by five years. As reported by Bloomberg, a move of this measure will speed the shift from reliance on fossil fuels to clean energy. The incentives extension will garner up to $38 billion in new solar investments and $35 billion in wind energy investments.