Policies to build a low-carbon future

SEI and partners yesterday gathered experts and policy-makers in Brussels to identify the most effective approaches to drive innovation for a transition to clean energy technologies, in particular solar photovoltaic and carbon capture and sequestation.

The round table, organized by the German Marshall Fund of the United States, SEI and the Brussels-based economic think-tank Bruegel, led off from SEI’s recent report on innovation for clean energy production.

Highest-emitting sector
The power generation sector is the single biggest emitter of greenhouse gases, and efforts to tackle climate change hinge on making clean energy affordable. This requires technological innovation and new business models to lower the costs and risks of clean energy technology.

SEI’s report for the 3C initiative, a coalition of business leaders that aims to integrate climate issues into world markets, examined the outlook for technological change in the electricity sector. The challenges are great: the sector is currently dominated by a few main technologies, private sector R&D spending is low, and technological change is relatively slow moving. Yet emissions must be tackled within the lifetime of a single power plant.

Push and pull
The round table discussion focused on key questions that must be addressed to drive innovation in the sector and so bring down emissions: how succesful are existing strategies for driving clean-tech innovation? What new policies are needed to accelerate technological change? What is the optimal mix of support for R&D and policies to create markets, known respectively as “push” and “pull” policies? How can a backlash against subsidies be avoided in times of economic constraint? The discussion also asked to what extent policy-makers need to pick winners in terms of which technologies to support.

Annika Varnäs, co-author of the 3C report and research fellow at SEI, said: “Great strides have been taken in the industrial development of low-carbon technologies. In particular, developments in solar photovoltaics have been remarkable. However progress has been dependent on market ‘pull’ policies, such as feed-in tariffs, 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.”

Speakers at the event included Varnäs; Claude Turmes, MEP; George Zachmann, research fellow at Bruegel; Giles Dickson, Vice President Environmental Policies and Global Advocacy at Alstom; and Roberto Zangrandi, Enel Head of European Institutional Relations. James Kanter of the International Herald Tribune and New York Times moderated the event.

Download the report Driving Technological Innovation for a Low-Carbon Society »

Download the 16-page report summary »