The price of renewable energy has been reduced significantly in the past years, incentivizing the transition from the world’s current fossil fuel dependency to clean energy. Still, with rapidly increasing world energy demand and the climate crisis exacerbating faster than previously predicted, the world is in desperate need of more tools for a quicker energy transition.
One of the most talked-about solutions to decrease fossil fuel use and encourage a transition towards renewables is to put a price on carbon. Although pricing emissions and making polluters pay is much needed for a clean transition, it is not enough. At the same time, it is a highly contested and politicized topic. With the climate crisis looming, we must start to think more broadly and explore additional tools to help make the transition to clean energy faster.
One of these tools is to subsidize renewable energy, and by doing so, creating more incentives for businesses and governments to expand the clean energy market and for consumers to switch to renewables quicker. Currently, fossil fuels are heavily subsidized, amounting to $4.7 trillion globally in 2015, while global renewable energy subsidies are meager in comparison, totalling approximately $128 billion worldwide.
Ideally, the fossil fuel subsidies should be re-directed towards subsidizing renewable energy instead. Even if this would not happen, the impact of subsidizing renewable energy further would significantly lower the price for clean energy, making fossil fuel energy less competitive in comparison.
Not only would subsidizing renewable energy help climate action, but according to a journal article in Renewable and Sustainable Energy Reviews, it would ensure a more just transition. Subsidizing renewable energy will create fewer emissions while at the same time making clean energy affordable for people who depend on energy from fossil fuels.
The need for even cheaper and more available, renewable energy cannot be stressed enough. In 2018, world energy production increased by 3.2 percent compared to 2017, whereas fossil fuels drove most of this increase. These numbers show that fossil fuels still play a dominant role in the increased energy usage and the need to explore and implement more clean energy policies.
While we wait for more countries to implement effective emission reduction policies, such as putting a price on carbon, subsidizing renewable energy would provide a less politicized alternative that would fast-track the clean energy transition. The time for action is now.