New research reveals risks to global low-carbon technology push
Press release: 20 December, 2011
Energy systems in the EU should be decarbonised by 2050, according to the Energy Roadmap adopted by the European Commission on 15 December, and low carbon technologies will be vital to achieve this goal. A new report from the Stockholm Environment Institute explains why recent progress in developing and deploying low carbon technology is fragile, and advises that policy support must be stabilized globally to maintain momentum. The research was carried out in partnership with the 3C (Combat Climate Change) business leaders’ initiative.
The research focused on two key low-carbon technologies: solar photovoltaics (PV) and carbon capture and storage (CCS). Both technologies are well-understood but require policy support to reduce costs, improve performance and broaden deployment. The report, to be launched early next year, found rapid industrial development around both technologies, but very different risks threatening each.
“Great strides have been taken in the industrial development of low-carbon technologies,” says Annika Varnäs, researcher at Stockholm Environment Institute and the report’s lead author. “In particular, developments in solar photovoltaics have been remarkable. However progress has been dependent on market ‘pull’ policies, such as subsidies, particularly from Germany. Support from more countries is needed, and investment in research and development must be increased, if recent gains are to be consolidated and sustained.”
High costs (and associated risks and barriers to investment) hinder the development of the two technologies in both Europe and the USA. Fortunately, costs for photovoltaics are rapidly coming down. However, the report shows that more innovation is crucial to further drive down costs and make solar PV competitive with other sources of electricity.
A large, global solar PV industry has emerged off the back of feed-in tariffs in Europe. These subsidies are now being adjusted. For growth to continue at a sustainable level, policy-supported markets have to emerge elsewhere around the world, and research and development will need to drive down underlying costs to meet the challenge of falling prices. Otherwise there is a risk that both deployment and cost improvements will be held up.
From 2005–2009 there was great interest in carbon capture and storage (CCS) from the business and policy spheres – interest that, as with solar PV, was largely generated by the EU’s policy ambitions. However, development has recently slowed as companies appear less willing to invest in large-scale demonstration projects.
“Industry has recognized that CCS will be needed in any ambitious climate mitigation scenario,” says Jesse Fahnestock, Climate Policy Advisor to the 3C initiative. “But as this new report shows, the hurdles to investment remain too high. Both the EU and the United States have committed billions to support the demonstration of CCS, but many important projects are being withdrawn as private investors reconsider the business risks. Without increased commitment from policy-makers, both in terms of financing and legislation covering underground storage of carbon, the timetable for CCS development will slip.”
Global collaboration could potentially benefit both technologies. While national “green growth” strategies have to some extent emerged as an alternative to the flagging global climate regime, the SEI-3C research is a reminder that technology development is a global issue.
“The effort needed to develop and deploy photovoltaics and CCS is significant,” says Varnäs. “The industries involved are global, but the policy support has not yet delivered the scale and global reach that is needed for sustainable progress.”
Download the summary for decision-makers Driving Technological Innovation for a Low-Carbon Society:
http://www.sei-international.org/publications?pid=1999
Download the policy brief highlighting results from the report:
http://www.sei-international.org/publications?pid=2000
For more information, please contact:
Ylva Rylander, Press and Communications Advisor – Stockholm Environment Institute
ylva.rylander@sei-international.org
+46 73 150 3384
Annika Varnäs, Research Fellow – Stockholm Environment Institute
annika.varnas@sei-international.org
+46 8 674 7001
Jesse Fahnestock, Climate Policy Advisor – 3C (Combat Climate Change)
jesse.fahnestock@vattenfall.com
+46 76 134 7034
3C (Combat Climate Change) is a business leaders’ initiative started in 2007 to provide recommendations on global climate policy. More than 70 companies around the world have supported the initiative and, since 2010, 3C has collaborated with the Stockholm Environment Institute.
Stockholm Environment Institute is an independent international research institute. The institute has established a reputation for rigorous and objective scientific analysis in the field of environment and development. SEI aims to bring about change for sustainable development by bridging science and policy.
www.sei-international.org
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