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Europe's clean technology investment challenge

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  • Reinhilde Veugelers

Abstract

Development and deployment of clean-energy technologies is crucial if climate targets are to be met cost-effectively. The European Union already has a plan that deals with these issues - the Strategic Energy Technology Plan, which has become central to the achievement of the EU's ambitions.In a period of constrained public finances, if governments want to leverage the necessary private innovation for clean-energy technologies, they will have to provide well-designed time-consistent policies, reducing commercial and financial risk through a combination of consistent carbon pricing, regulations and public funding, which will have to give a sizable and consistent push to early-stage clean-energy technologies, with a clear exit strategy.But first and foremost, governments should establish a sufficiently high and long-term predictable carbon price. The design of the EU emissions trading system and the distribution of carbon allowances should take into account more explicitly its power to leverage innovation. A move to a 30 percent EU emissions reduction target, which would involve a tighter emissions cap and fewer allowances being auctioned, would result would result in a higher carbon price and provide greater incentives for innovation.

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  • Reinhilde Veugelers, 2011. "Europe's clean technology investment challenge," Policy Contributions 561, Bruegel.
  • Handle: RePEc:bre:polcon:561
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    Cited by:

    1. Polzin, Friedemann & Migendt, Michael & Täube, Florian A. & von Flotow, Paschen, 2015. "Public policy influence on renewable energy investments—A panel data study across OECD countries," Energy Policy, Elsevier, vol. 80(C), pages 98-111.
    2. Reinhilde Veugelers, 2014. "What innovation policies for ecological transition? Powering the green innovation machine," WWWforEurope Working Papers series 73, WWWforEurope.

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