The amount spent on deployment subsidies is drastically out of proportion to how much is spent on public R&D.[188] In Germany, one study critical of subsidies suggests up to $580 billion overall will be spent till 2020 on clean energy generally, while the German government projects to only spend ~$620 billion until 2050.[189] The majority of these billions will be spent on subsidies.
German solar subsidies dwarf public R&D funding by a factor of 120 (!),[190] when economic modelling has suggested that the optimal ratio should be roughly one-to-one.[191][192]
Globally, clean energy deployment subsidies are around $140 billion annually.[193] compared to R&D.
I have talked to several people in government about this, but our views on the importance of clean energy innovation also seem uncontroversial within large parts of the academia, but have not made it outside of academia yet.
This view is shared by a number of academics, international organisations, and members of the private sector, including:
Daron Acemoglu, the most cited economic scholar in the recent decade, argues that optimal climate change policy requires both carbon pricing and subsidies for clean energy research.[202] He further argues that clean energy research should be heavily front-loaded to carbon taxation, which can be phased in gradually to minimize switching costs for industry. This argument has no bearing on the how high carbon taxes should be in absolute terms, nor how high clean energy R&D should be in the future, only that the latter should be prioritized. Put simply, it makes no sense to have most of our R&D spending later this century, but a high carbon tax can still be introduced at a later stage.
The International Energy Agency, which notes that because public R&D on energy technologies grew only at an average rate of only 2% per year in the last 5 years[203], there is need for more and that more spending on public and private clean energy R&D spending would be productive.[204]
The Breakthrough Energy Coalition,[205] a private sector coalition of billionaires led by Bill Gates, has started a venture to invest in breakthrough energy projects.
We came across a few recently published and unpublished papers that reached similar conclusions to ours and so we believe in the coming years our views might be more mainstream.[83],[84],[85]
I agree that clean energy innovation is important, I’m just uncertain about focusing significantly on basic research as opposed to taking new innovations to market and driving down the price. Might be better discussed in person.
The amount spent on deployment subsidies is drastically out of proportion to how much is spent on public R&D.[188] In Germany, one study critical of subsidies suggests up to $580 billion overall will be spent till 2020 on clean energy generally, while the German government projects to only spend ~$620 billion until 2050.[189] The majority of these billions will be spent on subsidies.
German solar subsidies dwarf public R&D funding by a factor of 120 (!),[190] when economic modelling has suggested that the optimal ratio should be roughly one-to-one.[191] [192]
Globally, clean energy deployment subsidies are around $140 billion annually.[193] compared to R&D.
I have talked to several people in government about this, but our views on the importance of clean energy innovation also seem uncontroversial within large parts of the academia, but have not made it outside of academia yet.
This view is shared by a number of academics, international organisations, and members of the private sector, including:
Daron Acemoglu, the most cited economic scholar in the recent decade, argues that optimal climate change policy requires both carbon pricing and subsidies for clean energy research.[202] He further argues that clean energy research should be heavily front-loaded to carbon taxation, which can be phased in gradually to minimize switching costs for industry. This argument has no bearing on the how high carbon taxes should be in absolute terms, nor how high clean energy R&D should be in the future, only that the latter should be prioritized. Put simply, it makes no sense to have most of our R&D spending later this century, but a high carbon tax can still be introduced at a later stage.
The International Energy Agency, which notes that because public R&D on energy technologies grew only at an average rate of only 2% per year in the last 5 years[203], there is need for more and that more spending on public and private clean energy R&D spending would be productive.[204]
The Breakthrough Energy Coalition,[205] a private sector coalition of billionaires led by Bill Gates, has started a venture to invest in breakthrough energy projects.
We came across a few recently published and unpublished papers that reached similar conclusions to ours and so we believe in the coming years our views might be more mainstream.[83],[84],[85]
All citations can be found at:
https://lets-fund.org/clean-energy/
I agree that clean energy innovation is important, I’m just uncertain about focusing significantly on basic research as opposed to taking new innovations to market and driving down the price. Might be better discussed in person.