Renewable energy and green technology companies are poised to crash, a recently released Foreign Affairs article argues. Despite the provocative title, the authors offer relatively familiar solutions for speeding energy innovation, such as boosting government funding for research and development.
The July/August edition of Foreign Affairs features "The Crisis in Clean Energy--Stark Realities of the Renewables Craze," which offers a grim outlook for solar, wind, and other green technologies--a crisis that will make it tougher for the U.S. to address energy security, the trade deficit, and global warming. Another piece by Devon Swezey of the Breakthrough Institute, teeing off the Foreign Affairs article, calls it "The Coming Cleantech Crash."
With government spending under intense scrutiny around the world, policies to subsidize renewable energy have become "politically unsustainable" in the U.S. and Europe, according to David Victor, a professor a the School of International Relations at the University of California San Diego, and Kassia Yanosek, founding principal at consulting and investment company Tana Energy Capital. Scaling back subsidies for solar and wind are already causing slowing growth rates, they argue.
"The root cause of today's troubles is a boom-and-bust cycle of policies that have encouraged investors to flock to clean-energy projects that are quick and easy to build rather than invest in more innovative technologies that could stand a better chance of competing with conventional energy sources over the long haul. Indeed, nearly seven-eighths of all clean-energy investment worldwide now goes to deploying existing technologies, most of which are not competitive without the help of government subsidies. Only a tiny share of the investment focuses on innovation," they write. … Read more