Fact of the Week: Public Investment Made Up 35 Percent Of Renewable Energy R&D Globally In 2014—Up From 10 Percent In 2004

Governments around the world in recent years have been shouldering more of the burden in tackling climate change by investing more in renewable energy R&D. In 2004, public R&D made up 10 percent of global renewable energy R&D investments, but by 2014 the figure had risen to 35 percent. Public investment is key to accelerating a shift toward a low-carbon economy since it often funds riskier, but potentially more-transformative R&D projects.

As researchers from the UK explain, private R&D in renewable technologies tends to focus on low-risk incremental innovations, such as slowly improving the efficiency of commercial solar cells. Because of that, high-risk, high-reward research tends to be underfunded globally. This is where public institutions, being focused more on the long term, step in to high-risk, high-reward projects. In fact, these same researchers estimate that public investments tend to fund projects that are 30 percent riskier than private projects.

As ITIF outlines in “Rescuing the Low-Carbon Energy Transition From Magical Thinking,” if the United States wants to be a global driver in low-carbon energy innovation, Congress should embark on a smart, aggressive energy policy agenda that maximizes the innovation capabilities of all sectors of the U.S. economy and society.