Renewable Energy Foundation

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Reforming Green Energy Policies

George Monbiot has just published (31.12.12) a retrospective column describing 2012 as as a landmark year in which the world's politicians turned their backs on environmental policies ("2012: the year we did our best to abandon the natural world"):

The discussion ranges broadly, but for present purposes we will focus on climate change and energy policy where he observes that:

The climate meeting in Doha at the end of the year produced a [...] combination of inanity and contradiction. Governments have now begun to concede, without evincing any great concern, that they will miss their target of no more than 2C of global warming this century. Instead we're on track for between four and six degrees. To prevent climate breakdown, coal burning should be in steep decline. Far from it: the International Energy Agency reports that global use of the most carbon-dense fossil fuel is climbing by about 200m tonnes a year. This helps to explain why global emissions are rising so fast.

There is, unfortunately, no recognition at any point in the article that current financial difficulties might be constraining in ways that are far from trivial. Nor is there any indication Monbiot understands why politicians are shifting their ground, namely that the prevailing climate change policies, and the renewable energy targets in particular, are proving to be so expensive that the world's politicians in both the developed and the developing world have little alternative. However, a straightforward reading of the current evidence, and the IEA's remarks on increased fossil-fuel use quoted by Monbiot, suggests that the world's current green energy policies are so costly that they are beyond the means even of the developed world, and certainly do not offer China and India an economically compelling alternative to coal.

REF has over the last few years repeatedly noted the counter-productive nature of the subsidy support for renewables, which rewards investors in existing and inadequate technologies, and distracts attention from the need to reduce the cost of those technologies in order to render them fundamentally competitive. For example, our recent publication, by the statistical economist Gordon Hughes, , reveals that the economic lifetime of wind turbine, is much shorter than the industry has claimed, with severe implications for the cost of the electricity generated, and for the cost of abating emissions (see The Performance of Wind Farms in the United Kingdom and Denmark). When even iconic and established industries such as wind are revealed to be inadequate in spite of decades of heavy subsidies, it is obvious that the current policies simply aren't working.

Of course, it would be extremely painful for Mr Monbiot to grant this, since the character of these policies is very largely the result of intense pressure from the environmental lobby, including writers such as himself, so rather than admit the failure of policy tracks for which he and his colleagues are in part responsible, he chooses to blame the politicians for backsliding.

In previous statements Monbiot has courageously observed that he believes that the need for clean energy is so acute that it outweighs the risks, as he sees them, of nuclear generation. This was unpopular with much of the green movement, but was at least a consistent development of his premises. A similar candour with regard to the current crop of green energy technologies would be helpful. If the aim is to displace coal from the world's electricity generation systems, then renewable energy must become very much cheaper, and for that to happen our policy instruments need to focus on that outcome, rather than hoping it will be a byproduct of creating a short-term subsidy bonanza for investors.

Economically scrupulous thinkers on the right of British politicis, such as Douglas Carswell, already recognise this, and in his own new year blog chose to recommend an energy policy based on “innovation, not subsidy”. Indeed, there is some ground for thinking that the change of political direction that George Monbiot’s despairing article so bitterly regrets is really an attempt to reverse out of the current cul de sac and head off in more promising directions.

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