Environmental Engineering Reference
In-Depth Information
studies have shown that private RD&D investments are an important side-effect of
deployment policies [
18
,
62
,
65
], in a context of relatively modest and stagnant
direct public RD&D support in renewable energy technologies [
64
,
66
]. Private
RD&D account for a large share of total RD&D in the RES-E sectors.
14
Of course, there might also be con
icts. Deployment may crowd out private
R&D. For example, according to Hoppmann et al. [
68
], FITs incentivized German
rms to shift resources toward new production capacities and away from long-term
R&D. More research needs to be carried out on this issue, however. The mutual
interactions between both types of innovation sources should be taken into account
when setting support levels in both realms. In addition, deployment support is no
substitute for public RD&D support and the other way around. They are rather
complements and should be coordinated.
2.6 The Success of RES-E Policies Should Only Be Analyzed
According to the Effectiveness and Cost-Effectiveness
Criteria
2.6.1 The Usual Claim
The criteria of effectiveness and cost-effectiveness have traditionally been used in
environmental economics to assess environmental policies. These have been con-
sidered the main, and most often, the only criteria. The former refers to the ability of
an instrument to reach a RES-E target, whereas cost-effectiveness refers to attaining
such a target at the lowest possible cost (see Sect.
2.4
).
2.6.2 The Reply
While effectiveness and cost-effectiveness are obviously key criteria to assess RES-
E support schemes, other criteria are also policy-relevant, i.e., policy makers usu-
ally take them into account and, thus, they should be used in order to assess the
success of policies implemented in the real world.
First, even the cost-effectiveness criterion as it has so far been used in empirical
research has not taken into account two main aspects. One is transaction costs. The
transaction costs related to the implementation and functioning of a RES-E support
(Footnote 13 continued)
market actors, something which in turn implies lower costs and higher market penetration rates for
the technology.
14
Criqui et al. [
67
] report that over the last 25 years (1974
1999) private RD&D expenditures for
wind energy might have been approximately 75 % higher than public RD&D expenditures. IEA
[
66
] notes that private-sector RD&D spending on energy technologies today is at $40
-
60 billion a
year, about four to six times the amount of government RD&D.
-
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