Because markets will not produce desired outcomes unless the right incentives and price signals are in place, governments have a vital role to play in creating the conditions necessary to promote optimal results and support long-term investments in new energy infrastructure, energy research and development, and high-risk/high-payoff technologies. Where the political will exists to create the conditions for a sustainable energy transition, a wide variety of policy instruments are available, from market incentives such as a price or cap on carbon emissions (which can be especially effective in influencing long-term capital investment decisions) to efficiency standards and building codes, which may be more effective than price signals in bringing about change on the end-use side of the equation. Longer term, important policy opportunities also exist at the level of city and land-use planning, including improved delivery systems for energy, water, and other services, as well as advanced mobility systems.
Science and technology (S&T) clearly have a major role to play in maximizing the potential and reducing the cost of existing energy options while also developing new technologies that will expand the menu of future options. To make good on this promise, the S&T community must have access to the resources needed to pursue already promising research areas and to explore more distant possibilities. Current worldwide investment in energy research and development is widely considered to be inadequate to the challenges at hand.
Accordingly, a substantial increase—on the order of at least a doubling of current expenditures—in the public and private resources directed to advancing critical energy technology priorities is needed. Cutting subsidies to established energy industries could provide some of the resources needed while simultaneously reducing incentives for excess consumption and other distortions that remain common to energy markets in many parts of the world. It will be necessary to ensure that public expenditures in the future are directed and applied more effectively, both to address well-defined priorities and targets for research and development in critical energy technologies and to pursue needed advances in basic science. At the same time, it will be important to enhance collaboration, cooperation, and coordination across institutions and national boundaries in the effort to deploy improved technologies.
