Providing government subsidies for emerging clean technologies could unlock their transformative potential.
Limiting climate change will require an unprecedented global movement to make low-carbon technologies the norm. COP26 – the UN climate conference held last November in Glasgow – showed that unfortunately, the world is far from ready for such a movement. Many leaders still assume that reducing emissions and growing their countries’ economies aren’t compatible goals.
Yet in many places, transitions to clean energy technologies have succeeded far beyond expectations. Since 2010, wind power has grown from providing under 1% to providing 10% of electricity in Brazil, and provided 15% of the EU’s electricity demand in 2019. Solar power – described as “the most expensive way to reduce carbon emissions” as recently as 2014 – now costs 85% less than it did a decade ago, increasingly making it the cheapest electricityin history.
And in India, affordable energy access programmes drove sales of high-efficiency LED bulbs from just 3 million in 2012 to 670 million in 2018, with prices also falling by 85%. These three technologies now offer some of the cheapest ways to produce electricity or light across much of the world.
What’s crucial is that these transitions all involved significant government action. Plus, most went ahead despite the fact that in many cases, early economic calculations suggested that developing renewables would be an especially expensive way to cut emissions.
Rather than relying on research and development to bring down costs through coming up with new inventions – or leaving the market to do so on its own through competition – governments used subsidies and public procurement programmes (government commitments to buy a certain volume of a new product) to keep costs down and boost uptake. […]
Professor of Energy and Climate Change, UCL
Read More: An energy revolution is possible – but only if leaders get imaginative about how to fund it