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Cambridge Centre for Environment, Energy and Natural Resource Governance

The first major study of driving forces behind government funding of energy RD&D – and the public institutions generating it – over the 21st century shows that competition created by China’s rise as a technology superpower led to significant increases in clean energy investment.

Analysis of energy RD&D investment in major economies also found that cooperation commitments at COP21, a UN climate conference, yielded some positives. Ultimately, however, trends over this century are not consistent with the ‘cleantech’ funding levels needed to meet climate goals, say researchers.

The study, led by C-EENRG Director Professor Laura Diaz Anadon and Professor Jonas Meckling from the University of California, Berkeley, and co-authored by C-EENRG Researcher Clara Galeazzi, C-EENRG Fellow Tong Xu, and Esther Shears, also from the University of California, Berkeley, is published in the journal Nature Energy. The research covers eight major economies – Germany, France, US, UK, Korea, India, China and Japan – in the years between 2000 and 2018. The study finds that total energy funding among seven of these (excluding India) grew from $10.9 billion to $20.1 billion, an 84% increase, while the share of RD&D (research, development and demonstration) funding for clean technologies – from solar and wind to efficient energy storage – across these seven economies went from 46% to 63%. However, it came at the expense of nuclear energy investment, which fell from 42% to 24%, while fossil fuel funding remained “sticky” and relatively unchanged.

The study further finds that cooperation in Mission Innovation, an initiative introduced at COP21, and clean tech competition with China are associated with growth in clean-energy RD&D. Stimulus spending introduced after the 2008 financial crisis, instead, boosted only fossil and nuclear energy RD&D.

Overall, “[l]evels of investment in clean energy have yet to come close to achieving meaningful global decarbonisation,” said Professor Laura Diaz Anadon, a corresponding author on the study. She concludes that “annual government funding for energy RD&D needed to have at least doubled between 2010 and 2020 to better enable future emissions cuts in line with the two-degree Celsius goal.”

Read more about the study in the University of Cambridge news article: Competition with China a ‘driving force’ for clean energy funding in the 21st century

Reference: Meckling, J., Galeazzi, C., Shears, E., Xu, T., & Anadón, L. D. (2022). Energy innovation funding and institutions in major economies. Nature Energy.