Thursday, March 15, 2012

R&D, competitiveness and sustainability


Innovation is of paramount importance to increase energy-efficiency and to enable the cost-effective use of low carbon energy sources, ensuring their large-scale market penetration. In this context investing in research and development (R&D), demonstration and early deployment of technologies is vital for sustainable development, conditioning the ability of the World to limit the concentration of greenhouse gases in the atmosphere and the increase of the global average temperature.

It is interesting to note that several emerging economies are allocating significant shares of their GDP to research and development (R&D) of new technologies. In 2009, China allocated 48% of its GDP, India 35%, and Korea 26%. These investments have the potential to enable these developing countries to leapfrog towards a more competitive, energy-efficient, and “low carbon intensity” Economy.

In the European Union, the overall current investment in R&D represented 19% of GDP in 2009.
Full implementation of the Strategic Energy Technology (SET) plan requires an additional investment in R&D and demonstration of € 50 billion over the next 10 years.

The “Stern Review” recognizes the private sector as the major driver of innovation and of the diffusion of technologies around the world. Nevertheless it stresses the role that governments can play to promote international collaboration to overcome barriers in this area, namely through co-ordination of priorities, and shared risks and rewards.

According to the “Roadmap for moving to a competitive low carbon economy in 2050”, for the EU SET plan to completely fulfill its role on the identified pathway, on average, over the coming 40 years, an additional investment of around 1.5% of EU GDP per year on top of the overall current investment is needed.

Sources:
- "A Roadmap for moving to a competitive low carbon economy in 2050", European Commission, 2011;
- Stern Review: The Economics of Climate Change.

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