Building a low-carbon economy The UK’s innovation challenge 19 th July 2010

Building a low-carbon economy

The UK’s innovation challenge19th July 2010

www.theccc.org.uk

http://www.theccc.org.uk/

Main messages

Current levels of public RD&D spend are a minimum: • cuts will damage achievement of our climate goals • funding increases should be an urgent priority as financial pressures ease

Government should address current uncertainties by setting out its strategy for meeting the 2050 target

The landscape of delivery bodies should:• be aligned with Government objectives• provide seamless coverage of all stages of innovation• be simple to understand and access• implement improved monitoring

Background to the review

The case for intervention

Technologies the UK needs to develop & deploy

Provision of public sector support

The required institutional framework

Presentation structure

To review the effectiveness of research and innovation arrangements in the UK related to

achieving our climate change goals

The Committee should:

•consider issues at a high strategic level,

•draw on existing information and analysis,

•decide on which areas/sectors to place greatest attention

Terms of reference

4

The innovation system: RDD&D

Source: Energy Research Partnership

Our approach







Dominant designs, lack of product differentiation, uncertainty and knowledge spillovers mean that support is required


Source: ONS/CCC

Low levels of innovation in key

sectors for climate change mitigation

Energy RD&D funding: historically low

UK public sector energy RD&D spend 1974-2008

$US

D m

illio

ns

Source : IEA

Compared to other countries: low

Source: IEA

UK is failing to exploit the opportunities offered by a low-carbon economy







Technology pathways to 2050

Broadly consistent view of technologies required to meet 2050 targets

Illustrative scenario

Develop and Deploy

● Technologies not yet competitive with high-carbon alternatives● UK has relevant capabilities● UK well placed to accelerate development

Deploy

● UK appears to lack an advantage● Unlikely to influence direction of development

● may develop some components ● can participate in international collaborations

Research & Develop

●Technologies further from market● Unclear which country has, or will have, an advantage● Potential for UK to lead/continue to lead some research areas







Low-carbon RDD&D spend

Estimated spend in 2009/10

Power

Transport

Buildings & industry

Agric & Waste

Other

£ 550 million

£5 billion deploymentsupport* £0.5bn

RD&D

* Deployment support comprises two-third levies and one-third expenditure

Very difficult to estimate, data not routinely

collected

Consider funding changes

Any cuts to public expenditure on low-carbon RD&D would be detrimental to the achievement of our climate goals

Deployment barriers

Barriers to deployment are as important as RD&D support







Today: Objectives to 2050 and beyond but a strategy only to 2020

Government should:

Long-term objectives & focus

Government strategy should focus on increasing:

International engagement

Delivery bodies should:

Delivery bodies

Improved monitoring and evaluation requires:

Monitoring and evaluation

Main messages

Current levels of public RD&D spend are a minimum: • cuts will damage achievement of our climate goals • funding increases should be an urgent priority as financial pressures ease

Government should address current uncertainties by setting out its strategy for meeting the 2050 target

The landscape of delivery bodies should:• be aligned with Government objectives• provide seamless coverage of all stages of innovation• be simple to understand and access• implement improved monitoring

Future work of the Committee

• Review of the second phase cap for the Carbon Reduction Commitment

• Advice on the level of the fourth budget

• Review of the second phase cap for the Carbon Reduction Commitment

• Advice on the level of the fourth budget

• Review of renewable energy ambition

• Advice on the Scottish cumulative emissions budget

• Third annual report to Parliament

• Advice on use of offset credits to meet the second carbon budget

• Review of international shipping emissions

• Review of sustainable bioenergy

• Review of renewable energy ambition

• Advice on the Scottish cumulative emissions budget

• Third annual report to Parliament

• Advice on use of offset credits to meet the second carbon budget

• Review of international shipping emissions

• Review of sustainable bioenergy

• Advice on inclusion of international aviation & shipping in carbon budgets

• Fourth annual report to Parliament

• Advice on inclusion of international aviation & shipping in carbon budgets

• Fourth annual report to Parliament

20102010

20112011

20122012

Documents

Building a low-carbon economy The UK’s innovation challenge 19 th July 2010