Tuesday, December 4, 2018

How governments can support the transition to clean energy

Governments have different policy tools to encourage the development of critical technologies. But which tools work the best at different points along the way, from pure research and development to full deployment? Thanks to some research by MIT, we have a playbook, using solar as a success story, of how to encourage the transition to clean, carbon-free energy.

When things are working, as technologies get cheaper and closer to commercialization, R&D gives way to performance standards. And when the industry is mature, price signals (like a price on carbon) take over.
To a first approximation, that’s what has happened with solar PV, except the market is still dominated by performance standards (like renewable energy mandates), while price signals (like carbon taxes and cap-and-trade programs) are having a little trouble getting revved up.


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