1. Adequacy of Renewable Energy Policies: A Preliminary Assessment
Graphics created by Ullupta conecum re volupta evelignis pe et doluptuam.
Adequacy of Renewable Energy Policies: A Preliminary Assessment
Muyi Yang
Deepak Sharma
Suwin Sandu

2. Content Background Objective Methods Emission reduction targets
Policy incentives for promoting renewable energy
Adequacy of existing policy incentives
Conclusions

3. Background
Global electricity generation has historically been dominated by fossil fuels
This domination has made significant contribution to global socio- economic prosperity
It has however made electricity industry one of the largest emitters of greenhouse gas

4. Global emissions by sector
Source: OECD (2012) Environmental Outlook to 2050

5. Background (cont.)
Efforts have therefore been undertaken to search for ways to defossilise electricity generation
Various options are under consideration, such as, energy efficiency, clean coal, nuclear, etc.
Among these options, a consensus seems to have emerged on the increased use of renewable energy as an attractive option for such defossilisation
According to IEA (2016), reduction in the share of renewable generation from 22% in 2013, to 67% in 2050, could reduce emission intensity of electricity by 90%

6. Background (cont.)
Such a significant increase in the share of renewable generation will however be a extremely challenging task
Why?
Because the uptake of renewable energy faces a range of technical, economic, regulatory and socio-political barriers
Sound and effective policies are required to overcome these barriers, so as to promote renewable energy sufficient for redressing the climate change challenge

7. Objective
To assess the adequacy of current renewable energy policies for defossilising electricity generation

8. Methods
Assessment of the adequacy of existing renewable energy policies
Emission reduction targets
Incentive-structures for promoting renewable energy

9. Methods (cont.)
The assessment is carried for 15 selected developed and developing countries
Developed economies: Australia, New Zealand, United States, and major European countries (especially, Germany, Norway and United Kingdom)
Emerging economies: Brazil, Chile, China, India, Malaysia, Thailand and South Africa
Potential economies: Bangladesh, and Kenya

10. Emission reduction targets
A significant variation in the ‘form’ of emission reduction targets
Base year target in developed economies
Targets for reducing projected emissions (i.e., baseline scenario target, and trajectory target), or for reducing energy intensity (i.e., intensity target), in most emerging and potential economies
Some large emitters (such as, China) are also committed to peak their emissions before 2030

11. Emission reduction targets (cont.)
A significant variation in the ‘conditionality’ of emission reduction targets
Unconditional targets in developed economies and some emerging economies (such as, China, and India)
Partial conditional targets in Chile, Malaysia, and Thailand
Full conditional targets in potential economies

12. Emission reduction targets (cont.)
Among the mitigation actions for achieving the emission reduction targets, increased use of renewable energy is one of the main areas for action

13. Policy incentives for renewable energy
Market-based
Regulation-based
Fiscal and Financial incentive
Quantity- based
Price-based
Developed economies
Australia √
Germany
New Zealand
Norway UK
United States
Emerging economies
Brazil
Chile
China
India
Malaysia
Thailand
South Africa
Potential economies
Bangladesh
Kenya

14. Policy incentives for renewable energy (cont.)
Two broad groups of polices incentives
Market-based: quantity-based (e.g., renewable portfolio standards), and price-based (e.g., CfD FiTs, and feed-in premium)
Regulation-based: quantity-based (e.g., public auctions), and price- based (such as, FiTs)

15. Policy incentives for renewable energy (cont.)
Market-based
Regulation-based
Fiscal and Financial incentive
Quantity- based
Price-based
Developed economies
Australia √
Germany
New Zealand
Norway UK
United States
Emerging economies
Brazil
Chile
China
India
Malaysia
Thailand
South Africa
Potential economies
Bangladesh
Kenya

16. Policy incentives for renewable energy (cont.)
A significant diversity in these incentives across the countries
Developed economies tend to rely more on market-based policies
Regulation-based policies appear to be favoured in emerging and potential economies
Besides, financial (e.g., soft loans, and public grants) and fiscal (e.g., tax exemptions) benefits are also provided for renewable energy in most countries

17. Adequacy of existing policy incentives
Existing policy incentives are inadequate
Why?
Because they essentially seek to improve the cost-competitiveness of renewable energy
This approach is limited, because it almost exclusively focus on removing economic barriers
Non-economic barriers are largely ignored

18. Adequacy of existing policy incentives (cont.)
There are however ample evidences to suggest that these barriers could significantly impede the uptake of renewable energy
Further, these barriers are closely linked with the wider socio-political interests
Attempts to remove these barriers are therefore likely to disturb the prevailing socio-political interests, resulting in opposition to their removal

19. Conclusion
Definitive targets for emission reduction are set in all developed, emerging and potential economies
Several areas have also been identified for actions for achieving the targets, and renewable energy is one of the main action areas
A range of policy incentives have been proposed to promote renewable energy
There is significant diversity in these policy incentives across the countries

20. Conclusion (cont.)
These incentives essentially seek to remove the economic barriers for renewable energy by, for example, providing price subsidies, tax benefits, and public grants
They ignore non-economic barriers, despite amply evidences suggesting that these barriers could significantly impede the uptake of renewable energy
They are therefore unlikely to promote renewable energy sufficient for redressing the climate change challenge

21. Conclusion (cont.)
Further, these non-economic barriers are closely linked with the wider socio-political interests
An understanding of these interests and how they affect the uptake of renewable energy is a pre-requisite for developing more effective policy incentives for promoting renewable energy

22. Thank you