Renewable poised to soar as 'game-changing' moment comes

by Neelke Doorn, Delft University | Delft University of Technology
Wednesday, 1 July 2015 09:44 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

World spending on fossil fuel subsidies is bigger than spending on healthcare - and it's time for that to change

In a landmark move on Tuesday, the United States and Brazil pledged to increase their respective share of renewable energy in electricity generation from sources other than hydro-power to 20 percent by 2030.

The major initiative to help tackle climate change was announced by US President Barack Obama and Brazilian President Dilma Rouseff in a meeting at the White House.

The renewable energy target will require the United States to triple the share of renewables in its energy mix by 2030, and Brazil will need to double its own share.   In addition to the renewables plan, Brazil committed to reforest some 12 million hectares of land by 2030 and promote “new, clean technology standards for industry and boost energy efficiency measures”.

The US-Brazilian initiative comes at a moment of major flux in the global energy debate with the G7, for instance, last month committing to phase out fossil fuels by 2100.  The statement by world leaders from North America, Europe and Japan put energy and the environment at the centre of the summit and could help catalyse a new global agreement on climate change, to replace the Kyoto Protocol, later this year.

The shift in the international political level debate comes at much the same time as the release last month of an important IMF report which explodes many myths around the economics of fossil fuels and renewable energies.

The study highlights that a massive $5.3 trillion isspent worldwide on fossil fuel subsidies each year, or about 6.5 percent of global Gross Domestic Product (GDP).  To put this in context, this exceeds the 6 percent of global GDP  spent on healthcare.

The report predicts that carbon dioxide emissions would fall by around 20 percent if these subsidies were scrapped. This adds to previous research which has also identified a negative correlation between fossil fuel subsidies and economic growth, and between fossil fuel subsidies and equality.  


The importance of the report for green energy advocates cannot be underestimated.  For in the debate on energy transition, opponents of renewable energy often claim that green energy technologies (and not fossil fuels) are simply not financially viable without subsidies.  

Given that these arguments have been largely unchallenged, it is commonly believed that the costs of solar and wind power per kilowatt-hour are significantly higher than those for gas and coal, and that green technologies are only viable when subsidised.

Although the literature on innovation and transition management has consistently asserted that these costs will fall significantly once green technologies are widely adopted, fossil fuel proponents still claim to have the financial arguments on their side.  

The IMF report performs a welcome function by turning these arguments on their head and will be welcomed by many proponents of green energy.  Yet, even with the IMF support, the intellectual debate is far from over.

For society as a whole, the greatest gains are likely to come from transforming what is now primarily a financial debate into a discussion about the conditions needed for a responsible transition to a green future.  So far, the discussion about how specific technologies can be implemented in acceptable ways has been dominated by financial arguments.

In most cases, however, the real controversy is not about the financial aspects of some plan or form of energy, but the potentially negative impact that it might have on the local surroundings, and whether local interests are being taken into account.  Not paying due attention to these aspects will ultimately increase the likelihood of projects failing in the face of public resistance.

Research I am leading at Delft University of Technology that is being funded under the ‘Responsible Innovation’ (Netherlands Organization for Scientific Research) and ‘Responsible Research and Innovation’ (European Union) frameworks may offer a more fruitful approach to achieving a successful transition to green energy.

These programmes are investigating how the design of technologies might take social and moral issues into account, both in terms of process and in terms of the specific materials or objects used.

One emerging conclusion is that it might be possible to accommodate societal concerns about the impact of onshore wind farms on migrating birds, for example, by requiring that the design of wind turbines take account of such concerns. Similarly, local opposition to solar parks may be reduced if citizens are given an opportunity to invest in them.

Let us now hope that the IMF report attracts the attention it deserves, not so that the financial argument swings to the side of supporters of green energy, but rather to focus the debate on what it should really be about so we can move faster to the green future we need to tackle climate change head on.    

Neelke Doorn is an ssistant professor at Delft University of Technology and former assistant director of the Dutch 3TU.Centre for Ethics and Technology.