The Economic Returns of Decarbonizing the Global Power Sector

This thesis examines the economic returns of decarbonizing the global power sector. Using data from 79,797 operational power plants across 156 countries, I quantify both costs and benefits through 2035 and 2050, globally and for countries. Themethodology extends the Coasian approach to all fossil fuels in electricity generation. The findings challenge the widespread belief that just climate action is too expensive. With a social cost of carbon of $190/tCO2e, net benefits reach $11.0 trillion by 2035 and $50.4 trillion by 2050. Notably, just 3.3% of total costs come from compensating fossil fuel owners, shifting the focus to mobilizing capital as the main challenge. While 45 countries see positive returns from self-financing by 2035, others need cross-border climate finance. This analysis transforms climate finance from a perceived zero-sum game into a positive-sum opportunity. Rather than charity, investments from developed to developing countries generate returns of 180-1457%. The findings demonstrate that power sector decarbonization represents both a solution to climate change and a compelling economic opportunity. These results provide policymakers with rigorous economic rationale to accelerate energy transition investments.

Name thesis:degree_name

M.S., Applied Economics and Management

Level thesis:degree_level

Master of Science

Discipline thesis:degree_discipline

Applied Economics and Management

Grantor

Cornell University

Year dc:date.issued

2025

Author dc:creator

• Bhadane, Yuktha

Committee member dc:contributor.committeemember

• Tobin, John

• Climate Finance
• Coasian Bargain
• Decarbonization
• Fossil Fuels
• Power Sector
• Renewable Energy

Statement dc:rights

• Attribution 4.0 International

Licence dc:rights.uri

• https://creativecommons.org/licenses/by/4.0/

Language dc:language.iso

en

DOI

https://doi.org/10.7298/0tyf-6c51

Dc Identifier Other

ProQuest Submission ID: 12421
ProQuest Publication ID: 32000309

OAI identifier oai:identifier

oai:ecommons.cornell.edu:1813/117398