* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
With a relatively small investment, renewables and low-carbon tech have come a long way - but the journey to net-zero has only just begun
Mission Innovation (MI), the international government clean-technology research, development, and demonstration (RD&D) initiative that came out of the 2015 Paris Agreement on Climate Change, was renewed last week for five more years, amid muted fanfare.
The United States - which is unlikely to reach its 2015 commitment under the five-year program to double clean energy RD&D by this year - punctuated its participation in the virtual MI ministerial hosted by Saudi Arabia last week by stating the importance of energy innovation and scientific research. China expressed its willingness to deepen its international cooperation on clean energy innovation.
But the big story out of this year’s MI meeting of the 24 governments and European Union which are part of MI is a decision to ramp up public-private partnerships in energy innovation, to promote tipping points for scale-up of clean energy.
This joint goal is more significant than it might sound. It comes on the heels of two major government announcements regarding the clean energy activities of state-owned enterprises.
Firstly, Saudi national oil company Saudi Aramco said it had shipped to Japan the world’s first cargo of blue ammonia - natural gas converted to hydrogen and then ammonia, capturing the CO2 emissions. Last July the Saudi-financed innovation city of Neom signed a $5 billion agreement with U.S. firm Air Products & Chemicals Inc. to build a hydrogen-based ammonia plant in Saudi Arabia powered by renewable energy.
Secondly, China’s flagship state-owned national oil company PetroChina pledged in August to reach near-zero greenhouse gas emissions by 2050 by investing in geothermal, wind and solar power, and pilot hydrogen projects.
In our view, Mission Innovation did what it said on the tin - even if, based on the latest information countries submitted to the MI Secretariat, many of its members will likely fail to reach their doubling expenditure targets.
By 2018, MI members had invested nearly $55 billion in clean energy R&D. The productivity of that spending is apparent. Costs for many clean energy technologies targeted by Mission Innovation have fallen dramatically.
This is due to its targeted investment, built on accumulated innovation efforts and funding prior to 2015, that led to economies of scale, especially for wind and solar. These cost reductions have contributed to the rapid deployment of renewable energy around the globe and rising investments by the private sector. Installed solar capacity in MI countries, for example, has risen 265% since 2015.
Yet here’s the rub. Clean energy R&D, such that it is, has made great strides, but our long walk to net-zero emissions has barely begun.
COVID THREAT?
The risk now is that governments – hit by COVID, economic collapse and sensing clean energy costs are falling – will shrink their wallets. The 25 MI members left their meeting without a concrete announcement of specific spending levels to target going forward.
Overall, our calculations are that government clean energy research spending by all the MI countries together grew roughly 40% between 2015 and 2018, far short of the doubling goal.
Still, increased global competition now means that clean energy RD&D is an even more salient component of economic revitalization than five years ago when designing economic stimulus plans. New innovative clean energy and decarbonization technologies are also still mission critical for combating climate change.
Four MI members - the UK, Chile, Mexico, and the Netherlands - reached the doubling finish line in 2018. They need to stay the course with equal ambition going forward. The EU has exemplary plans to become climate-neutral by 2050, dedicating $572 billion in stimulus funds to that end. China may not quite reach doubling its funding in clean energy RD&D by 2020 since it slowed spending in 2019. Still, it is getting close to matching the United States as the world’s top clean energy RD&D investor.
India increased clean tech RD&D investments by 44% in 2018 but the level dropped by almost 30% in 2019, based on the information just released at the conclusion of the fifth Ministerial. South Korea’s post-COVID-19 stimulus includes $130 billion in green subsidies. Morocco, which just joined MI and is home to the world’s largest concentrated solar plant, has a bold vision to be the energy technology hub for Africa.
But all this is still not enough. Governments should require private-sector firms to report total spending in clean energy RD&D by category (e.g. solar, wind, battery storage) to allow for more study of the interaction between public and private funding.
Countries should also improve reporting by state-owned enterprises and follow China and Saudi Arabia’s examples to require a greater percentage of these state-owned behemoths’ R&D energy spending to go to low-carbon solutions.
We’re only at the foothills of our clean energy adventure. With a relatively small investment, we’ve come a long way. With the emissions peak now in sight – but still distant – now is the time to redouble efforts and jam the funding taps wide open.
Amy Myers Jaffe is research professor and managing director of The Fletcher School at Tufts University’s Climate Policy Lab and Zdenka Myslikova is PhD student and research fellow at The Fletcher School.
