Blog Post

Getting better all the time: The benefits of learning for decarbonisation

The technological development will dramatically impact decarbonisation cost. In this blog post, the author suggests that national decarbonisation strategies should put a special emphasis on the benefits of learning.

By: and Date: April 16, 2019 Topic: Green economy

This blog post is based on the publication put together in the framework of the COP21 RIPPLES project.This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 730427.

Technological improvements are seen as a physical law that will substantially contribute to reducing the cost of global decarbonisation efforts. Hence, the expected learning rates built into models that assess the cost of decarbonisation are substantial. The climate strategy proposed by the European Commission assumes, for example, that the cost of solar photovoltaics will fall by 36% and the cost of wind turbines will fall by 27% between 2020 and 2050. The good news is,  these forecasts are rather conservative compared to the observed cost reductions in the past decade. According to the International Renewable Energy Agency (2018) cost of solar power generation fell by 70% between 2010 and 2017 while onshore wind projects installation cost fell by 19% between 2010 and 2016.

Learning matters

The technological development will dramatically impact decarbonisation cost. Research in the framework of the COP21Ripples project shows that a 50% lower learning rate for wind and solar technology alone would induce a 19% increase in total decarbonisation cost. On the other hand, a 50% higher learning rate could reduce energy system cost by 17%.

Learning depends largely on deployment, and early deployment yields additional value

Learning-by-doing was seen as a key driver of the reduction of technology cost in the past. Research in the framework of the COP21Ripples project indicates that technology cost developments for certain technologies can be relatively accurately predicted based on the rate of their deployment. In a scenario with a 30% increase in annual deployment, the cost of new installations drop by 17% for solar and 13% for wind compared to a medium deployment scenario (10% annual growth).

This indicates that countries should start to develop and deploy low-carbon technologies early as technology cost reductions accumulate and allow a sooner switch from fossil to low-carbon technologies. Hence the total cost of decarbonisation might be reduced if early deployment is rewarded.

Making regional specialisation productive for speeding up learning

Keeping global temperature increase below 2°C will require an almost complete decarbonisation of our energy system in the foreseeable future (early in the second half of this century). There will therefore be a growing market for all sorts of low-carbon technologies (vehicles, power plants, appliances, batteries…) that will replace the existing stock of high-carbon technologies. Policies to develop and deploy corresponding technologies might not only speed up the necessary learning but also enable the development of comparative advantages. These advantages typically develop in industrial clusters and not all regions have the potential to excel in all low carbon technologies. Hence, it might be sensible for regional and national policymakers to make educated guesses on what type of support might fall on the most fertile ground in their jurisdiction. Regions with a strong car industry might, for example, benefit more from aggressive low-carbon vehicle deployment programs, while regions with a successful semiconductor industry might benefit more from public support for research in photovoltaics.

Success of policies depends on whether they target the national innovation system

Support policies for specific low-carbon technologies will only deliver if the addressed stakeholders actually shift their activities accordingly. Thus, policies should be clearly targeted at the specific national innovation system. For example, a case study conducted for the COP21Ripples project in Brazil highlighted a relatively positive experience with well-designed local content provisions for the wind industry. Given Brazil’s significant market size as well as the pre-existing technological capabilities, they seem to have contributed to the development of a local wind industry.

By contrast, the full potential of the solar thermal energy industry in South Africa has not yet been exploited as it was not possible to involve relevant stakeholders – especially the national electricity company – into this process.

Hence, national decarbonisation strategies should put a special emphasis on the benefits of learning.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read about event
 

Past Event

Past Event

[Cancelled] Shifting taxes in order to achieve green goals

[This event is cancelled until further notice] How could shifting the tax burden from labour to pollution and resources help the EU reach its climate goals?

Speakers: Niclas Poitiers and Femke Groothuis Topic: Green economy, Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 12, 2022
Read article More on this topic More by this author
 

External Publication

Dans l’urgence climatique

Book published by Gallimard and overseen by Groupe d’études géopolitiques (GEG)

By: Simone Tagliapietra Topic: Green economy Date: March 22, 2022
Read about event More on this topic
 

Past Event

Past Event

Decarbonising Germany: conversation with Patrick Graichen

A special off-the-record conversation with Patrick Graichen.

Speakers: Patrick Graichen and Guntram B. Wolff Topic: Green economy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 10, 2022
Read about event More on this topic
 

Past Event

Past Event

Greening Europe’s post-Covid-19 recovery

At this event Bruegel launches a new Blueprint that collects voices of policymakers and academics on the crucial topic of how to make sure Europe will recover from the pandemic crisis while keeping their commitments to the Paris Agreement.

Speakers: Ian Parry, Simone Tagliapietra, Laurence Tubiana and Guntram B. Wolff Topic: Green economy Date: February 24, 2022
Read article Download PDF More on this topic
 

Blueprint

European governance

Greening Europe’s post-COVID-19 recovery

This Blueprint includes some of the Group’s most prominent voices on the different aspects of the multidimensional issue of green recovery.

By: Simone Tagliapietra, Guntram B. Wolff, Georg Zachmann, Laurence Tubiana, Laurence Boone, Antoine Dechezleprêtre, Jean Pisani-Ferry, Klaas Lenaerts, Thomas Wieser, Ottmar Edenhofer, Mirjam Kosch, Michael Pahle, Ian Parry, Robert N. Stavins, Sabine Mauderer and Tomasz Koźluk Topic: European governance Date: February 23, 2022
Read article More on this topic More by this author
 

Blog Post

Europe’s sustainable taxonomy is a sideshow

The EU taxonomy grossly simplifies a complex and dynamic world. It might help prevent green-washing but other tools are needed to guide green investment.

By: Georg Zachmann Topic: Green economy Date: February 22, 2022
Read article More on this topic More by this author
 

Opinion

A new EU treaty to fight climate change

Thirty years after Maastricht, a new treaty is needed: one that will commit the EU to tackling its greatest challenge in the decades ahead, climate change.

By: Maria Demertzis Topic: Green economy Date: February 8, 2022
Read article More on this topic More by this author
 

Opinion

Letter: The EU’s green taxonomy is a missed opportunity

The taxonomy is unlikely to become the international “gold standard” in the field, which is a missed opportunity.

By: Simone Tagliapietra Topic: Green economy Date: February 7, 2022
Read article More by this author
 

Blog Post

European governance

A European climate fund or a green golden rule: not as different as they seem

Spending and borrowing via a non-redistributive EU climate fund or under a well-designed green golden rule would result in similar project implementation and be treated the same in the EU’s fiscal framework.

By: Zsolt Darvas Topic: European governance, Green economy Date: February 3, 2022
Read article More on this topic More by this author
 

Opinion

In the electric vehicle race, China coming first

China is not only a producer and consumer of EVs, but also of the battery components on which they depend.

By: Alicia García-Herrero Topic: Green economy Date: January 26, 2022
Read about event More on this topic
 

Past Event

Past Event

Where is Biden's climate policy?

A year after his inauguration, what has President Biden really achieved on climate?

Speakers: Samantha Gross, Dan Lashof, Michael Mehling and Simone Tagliapietra Topic: Green economy Date: January 25, 2022
Read article More on this topic
 

Opinion

How an open climate club can generate carbon dividends for the poor

The German-led G7 can accelerate decarbonisation while tackling climate justice.

By: Andreas Goldthau and Simone Tagliapietra Topic: Green economy Date: January 11, 2022
Load more posts