Countries should set targets to increase public investment in low-carbon research and development (R&D) slowly and steadily beyond 2020, according to a report published by the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science.
The report states that “while it is welcomed that countries like the UK have committed to double public funding for low-carbon R&D by 2020 as part of Mission Innovation; countries should be encouraged to set public R&D targets as far ahead as 2030.”
The authors of the report – Antoine Dechezleprêtre, Ralf Martin, Samuela Bassi – argue that “commitments to fund R&D should have a long-term component just like carbon emission caps”. However, they caution against a sudden increase in funding for low-carbon R&D, because the number of researchers is fixed in the short run and expanding research in clean technologies involves training new scientists to avoid crowding out other socially valuable R&D activities.
The report argues that “growth in low-carbon R&D budgets should be slow and steady, allowing time for the development of young researchers in the field.”
It adds: “Targets would vary between countries and may need to be set within a range, but such long-term targets would reduce public funding spikes and associated adjustment costs, and ultimately could reduce the overall cost of decarbonisation.”
Public spending on low-carbon R&D needs to increase significantly over the next few decades if the world is to realise the goals of the Paris Agreement to limit global warming to well below 2°C and to achieve net zero global emissions of greenhouse gases in the second half of this century. Some of the greatest funding increases are needed in low-carbon transportation, carbon capture and storage (CCS), smart grids and industrial energy efficiency.
The report states: “A crucial challenge for climate change policies is ensuring that low-carbon innovation activity is either additional to current research and development (R&D) expenditures, or at least displaces innovation in polluting technologies rather than other socially valuable innovation. Policies that change the relative price of low-carbon and high-carbon inputs, such as emissions permits markets or fuel taxes, can play this role effectively.”
The authors point out that “increasing public support for low-carbon R&D may also be politically attractive because low-carbon innovations have larger economic benefits than the carbon-intensive technologies they replace.”