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Governments must deliberately use public investment and regulation to rapidly scale-up clean energy technologies to bring down costs, achieve global climate goals and boost economies worldwide, according to a new report launched by leading international economists and energy policy experts.
The report, based on a comprehensive analysis of the last three decades of global energy policy, shows that to replicate the outstanding successes of the energy transition so far, such as offshore wind and solar PV, governments must go beyond just providing a alevel-playing field' where technologies are left to compete against each other.
In fact, they should proactively use the three levers of policy: investment, tax and regulation, to accelerate innovation and cost reduction in clean technologies.
The report recommends that governments should also target atipping pointsa¿, where clean technologies gain an advantage over fossil fuels, leading to a rapid reallocation of investment.
This contrasts with traditional economic advice, on which policy is often based, which assumes the economy will not change very much. Contrary to some of the advice given to governments over the past 30 years, government policy, investment and regulation can cut energy costs instead of increasing them, crowd in private investment instead of crowding it out, and accelerate innovation and growth.
In opposition to the idea that policy should be atechnology neutrala¿, the successes of onshore wind, offshore wind, solar PV and electric vehicles were driven by governments directly identifying and supporting the technologies that they needed to succeed.
"Ten Principles for Policymaking in the Energy Transition: Lessons from experience" provides clear evidence of how and where policy has stimulated rapid innovation and growth in clean energy technologies since the 1990s.
Based on this body of evidence, the report calls for governments to urgently reshape their policy approaches to accelerate innovation, job-creation, and cost reduction in the transition from fossil fuels to clean energy.
The findings are consistent with a report by the International Energy Agency, International Renewable Energy Agency and the UNFCCC Climate Champions that the world could make much faster progress towards global climate goals by coordinating practical action in each of the emitting sectors of the economy, focused on crossing tipping points where clean technologies become the most affordable, accessible and attractive options.
Laura Diaz Anadon, Professor of Climate Change Policy and Director of the Centre for Environment, Energy and Natural Resource Governance at the University of Cambridge, one of the lead authors of the report, said: "Experience with clean energy policy around the world over the past 30 years shows that it is time to reconsider what is required to meet climate and energy goals."
"Decisive government action is essential, but to succeed it must rely on a different set of policy principles, given the transformational scale of change required.
"Governments cannot simply set the goal and encourage the market to deliver. They must be active participants; investing to de-risk markets, regulating to bring down costs, and making strategic technology choices to incentivise and focus the private sector. Doing so can deliver a transition to clean energy that is faster, cheaper and more sustainable for all," Anadon added.
Investment into clean energy sectors, including power generation, electricity grids, road transport, steelmaking and hydrogen, could support 65 million jobs and $26 trillion of benefits by 2030.
With many countries adopting policy measures to address the energy price and climate crises, the report shows how government interventions can create technology tipping points, which in turn unlock competitiveness, investment and the lowest cost decarbonisation -- achieving a faster energy transition and lowering bills for consumers.
Nigel Topping, UN High Level Climate Action Champion, COP26, said: "The Race to Zero is not being run in a predictable, linear economy. Instead, the economic landscape is constantly changing, as new technologies and business models emerge and so we need a dynamic, adaptive approach to policy-making."
"These new principles can help us navigate this inevitable but disruptive transition successfully, to reach our goals of a more prosperous society within a safe and stable climate."
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Fri, September 23 2022. 09:06 IST