Supporting Renewable Energy is More Important Than Ever Before

15/11/2011 23:47 | Updated 15 January 2012

Media coverage of renewable energy here in the UK is getting very depressing.

We regularly hear calls for the EU's 2020 renewable energy target - which requires the EU to consume 20% of its energy from renewable sources by 2020 (the figure is 15% in the case of the UK) - to be scrapped.

The justification for this is often that renewable energy infrastructure is just too costly, that renewable subsidies distort the market and that a much easier way of reducing emissions would be to just burn 'cheap' gas, instead of coal.

This sort of rhetoric is disingenuous.

First, the vital role renewables have in substantially reducing the world's CO2 emissions seems to have dropped off the media and political agenda.

This is more urgent than ever if we want to avoid the worst impacts of climate change. The United Nations Environment Programme's (UNEP) Emissions Gap Report earlier this year made it very clear that the world's emissions need to peak well before 2020, if the world is to avoid an increase in temperatures above 2c, the limit that current scientific consensus tells us not to exceed if we want to avoid dangerous climate change.

This comes on top of last week's warning by the International Energy Agency (IEA) - who are far from being an environmental lobby group - that unless the world is clearly set on a course to reduce its emissions by 2017, the door to keeping temperatures below 2c "will be closed forever."

The IEA also made the point in its Golden Age of Gas report, that a new dash for gas (including shale gas) would almost certainly set the world on a path towards at least 3.5c warming.

Second, whilst there is clearly an upfront cost to supporting renewable energy technologies, this support is absolutely essential.

Several renewable technologies are still relatively immature, and need support through the form of clear financial mechanisms and volume targets in order to improve their performance.

This has been done with other technologies in the past and is all the more important, when you consider that the current energy market is already completely skewed against renewable energy, not the other way round - as some observers like to suggest.

For example; last weeks' World Energy Outlook from the IEA also revealed that global fossil fuel subsidies amounted to $409 billion in 2010, and could go up to $660 billion in 2020 without further reform. In contrast, renewable energy received just $66 billion of support in 2010, said the IEA.

Not only are these subsidies incentivising the use of the most polluting fossil fuels, and tend to be directed primarily to rich rather than poor countries, the level of these subsidies is substantially higher than any help that is given to zero-carbon, renewable energy technologies.

Given that substantial subsidies have been given and are still being given to support nuclear power too, it is very hard to see how emerging renewable technologies could have a chance to compete on a level playing field without the help of policy support measures, such as the EU's renewable energy target and associated subsidies.

Finally, an issue that critics of renewable energy support schemes conveniently forget to mention is that the longer we debate the future role of renewable energy, and whether or not it is worth supporting, the longer it will take us to reduce costs.

Providing investment certainty to the renewables sector through clear targets and financial support schemes, is the very factor that could substantially reduce the costs of renewable energy technologies and help create green jobs.

In other words, investment certainty holds the key to lowering the cost of capital, incentivising investment in domestic supply chains, standardising products and increasing investment in R&D. All this is critical to reducing costs and creating jobs in the sector.

Renewable energy has an urgent and substantial role to play in our energy supply. Yes, there are important initial costs that come with supporting them, but these costs are absolutely dwarfed by those the world economy will have to bear in trying to adapt to the worst impacts of climate change - not to mention the tragic human and environmental consequences that would come with it.