Tariffs and Decarbonization Cost Analysis

This technical report presents an updated analysis of the Carbonomics cost curve, which evaluates over 100 applications for decarbonization technology across key emitting sectors. It outlines four main conclusions regarding the impact of technological innovation on decarbonization costs. The report details that while innovation has reduced the lower half of the cost curve by an average of 7% year-over-year, certain technologies in hard-to-abate sectors are experiencing increased costs. It highlights that batteries and solar technologies have seen significant cost reductions, whereas industrial decarbonization remains challenging. Furthermore, the report discusses the implications of deglobalization, suggesting that local manufacturing could increase decarbonization costs by 30%. Lastly, it indicates that lower gas prices could further decrease the cost curve by 20%, emphasizing the complex interplay between local production, tariffs, and global supply chains in the context of clean technology.