Are renewable energy subsidies effectively combating carbon emissions?

Abstract

Rising global carbon emissions is considered the main driver of climate change, which threatens to reduce the habitability of various parts of the world. The largest source of these emissions is electricity generation. As such, renewable energy technologies like wind and solar photovoltaics have been subsidised by developed nations, with the aim of providing a carbon free way of meeting future electricity demand. As the world’s electricity production shifts from developed nations to developing nations, it is assumed that the benefits brought about by renewable energy subsidies will allow developing nations to meet their growing electricity demand using renewables instead of carbon intensive fossil fuels. However, this assumption has proven to be false. Although renewable energy is more affordable than ever before, developing nations are still planning to use large shares of fossil fuels to meet their future electricity demand. Additionally, renewable energy still suffers from unreliability and a lack of viable energy storage options. The effectiveness of renewable energy subsidies is dictated by a country’s priorities surrounding energy policy. The unreliability of renewable energy may not be an issue for developed nations due to their robust electrical grids and strong backups of reliable power generation (namely fossil fuels and large hydropower dams). This allows them to focus their energy policy on climate change and provides a pathway for renewable energy subsidies to effectively reduce emissions in developed nations. In contrast, developing nations are struggling to achieve basic energy access and frequently suffer from power outages due to weak electricity grids. These problems take priority over carbon emissions and climate change, resulting in the continued use of fossil fuels due to their affordability and reliability. Therefore, renewable energy subsidies are not an effective way of reducing global carbon emissions, as they have been unable to reduce the use of fossil fuels in developing nations (the major source of carbon emissions in the future). Alternative methods that may be more effective at reducing carbon emissions include helping developing nations solve their energy access and reliability problems directly. This will allow them to more quickly shift their focus to combating climate change.