Do governments have the right mix in their energy R&D portfolios?

Climate change is a major externality justifying government-sponsored R&D efforts into climate-friendy technologies. Current and near-term R&D is needed to develop new and improve existing technological options that will be needed in the long-term future to drastically reduce greenhouse gas emissions. The paper contrasts historical and current government R&D spending of the member countries of the International Energy Agency with a need-based analysis of technologies required to achieve long-term climate stabilization. The assessment of technology needs draws on the popular 'stabilization wedge' concept and is based on an analysis of a wide range of (22) scenarios of future technology deployment rates under a range of climate constraints that reflect important long-term uncertainties. We identify a significant mismatch to current energy technology R&D portfolios. The largest gap is between energy efficiency that is under-represented in current R&D portfolios and nuclear, which is over-represented, when compared with their respective importance for future climate mitigation efforts. Our discussion, therefore, focuses largely on these two contrasting mitigation options: energy efficiency versus nuclear.

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