The Committee on Climate Change, the statutory body that advises ministers on emissions reduction targets, said the UK spent 0.01 per cent of GDP on energy in 2007, the latest year for which comparative figures are available. That compared to 0.03 per cent in the US, 0.05 per cent in France and 0.09 per cent in Japan.
About £550m of public money was spent on low-carbon technologies last year, of which about £260m was on energy.
The committee’s report also quoted estimates by the International Energy Agency that investment must be increased by between two and five times current levels to meet climate targets.
The Committee called on the government to concentrate support on six areas: offshore wind; wave and tidal power; carbon capture and storage; smart grids and meters; electric vehicles; and aviation.
Without government support, it warned, a range of low-carbon technologies were in danger of being stuck in a so-called “valley of death”, whereby private sector investors were unwilling to take a risk on the investment needed.
A “lack of clarity in the institutional landscape” was also inhibiting development, the committee found, as businesses struggled to understand the way public funds were disbursed.
It is somehow surprising that offshore wind has been identified as a cheap option:
The report identified offshore wind as “likely to be the least cost path for decarbonising the power sector”.
Does anyone have evidence on costs?