United States

United States

Private investment must be aided by national policy

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Wind, solar and other renewables provide just 8% of US energy needs and it will be 20 years before their share reaches 9% if current trends persist, says the respected World Resources Institute. But there is little hope of slowing global warming without a national policy to spur use of renewables, states an institute report released December 15. Even the National Energy Policy Act of 1992 will have little impact on the rate of renewables market penetration.

A New Power Base: Renewable Energy Policies for the Nineties and Beyond argues that market forces alone will not propel renewable energies to the forefront. No single utility, developer or manufacturer can benefit from all the future costs savings or environmental benefits of commercialising renewables. This limits private investment, argues the report, and makes a national renewable energy strategy vital.

The authors identify three further major barriers to broader reliance on renewable energy: distorted energy prices mask the environmental and social costs of traditional generating technologies; utility regulation discourages renewables even when they are cost-effective -- utilities for example discount the risks of fossil fuel plants because they pass on the costs to customers; decisions about whether to use renewables in homes or businesses are based upon a too high perception of risks and are not made by those in the buildings.

"A nationwide shift to renewables promises abundant and inexhaustible energy flows that can fuel the US economy indefinitely," says WRI president Jonathan Lash. "Triggering a nationwide shift toward renewable energy could substantially reduce the ultimate economic costs of complying with international climate agreements," says co-author Keith Kozloff. The report chronicles the chequered path of renewables in the US, from the days of the oil embargo to the "fitful" growth of the technologies in the late 1970s and 1980s.

WRI advocates getting the prices right by reforming energy prices and government subsidies to reflect the social costs of electricity production. It also advocates changing the way utilities and energy users make energy supply decisions so that planning and acquisition procedures no longer work against renewables. And the WRI advocates crafting and implementing plans to supplement private investment in bringing renewables to commercial maturity. Such plans should be market-driven and consistent.

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