A few days ago, we posted that the first quarter of 2011 saw the second largest amount of investment by venture capitalists in green tech. Despite these promising numbers, a recent report released by the International Energy Agency (IEA) says governments are still lagging far behind in providing public support for renewable energy and efficiency research. Such support is critical since private companies can’t pony up the kind of R&D funding that governments provide and without R&D, innovation falls behind.
The report, called the Clean Energy Progress Report, notes that the last decade has seen a dramatic rise in global investments in renewable energy, led by wind and solar. Energy efficiencies have also seen modest gains and car companies have added hybrids and all-electric vehicles to their product lines.
Despite these positives, the growth of fossil fuel development has continued to outpace clean energy technologies. In fact, coal has been the fastest growing global energy source for the past decade, providing 47% of new electricity demand. And while research investments in nuclear are high, the recent events in Japan leave that industry with a vastly uncertain future.
The IEA notes a number of ways governments can address the situation, such as policies that support the longer term goals of meeting clean energy and carbon reduction targets. For instance, many of the renewable energy government subsidies have expired while fossil-based technologies continue to receive them. In 2009, renewables received $57 billion in subsidies while fossil fuels received $312 billion. The difference in those numbers is understandable when compared to the amount of energy provided, but for change to occur, renewables will need continued and greater support until their development is cheaper. Governments should also continue providing tax credits and other incentives to stimulate private sector investments.
In short, the world needs nothing short of “a clean energy revolution,” says the report. And while it outlines possible combinations of policies that could provide such a result, the recent wrangling in Washington over the US budget, in which Republicans want to axe funding for renewables while continuing tax benefits for oil companies, shows that not everyone is in agreement.
Although it’s hard to argue with Republicans given the amount of energy and jobs fossil fuels provides, we should also take note of other approaches. For instance, the Wall Street Journal recently reported on the growth of renewables in China, due in large part to government policies. As a result of those policies, wind energy has increased substantially and Chinese solar panel companies are now the largest in the world. The success of China’s clean energy policies hasn’t only helped its own supply-chain companies, it’s also attracting U.S. and European manufacturers.
You can read the entire IEA report here.