How can we prevent contributing to global warming by 2050? It is through efforts to decarbonize our economy and reduce the use of fossil fuels. How has public policy dealt with climate change? Subsidies for renewable electricity have been the core instrument.
A scheme was introduced by the Irish government in the 1990s, whereby suppliers of renewable electricity could supply the ESB whilst competing on the cost. But, due to planning glitches, the scheme was ineffective. In the last decade, an altered approach has been adopted wherein the onshore wind suppliers of renewable electricity have a guaranteed minimum price for electricity.
The generation of electricity from wind is considered capital-intensive. The cost of subsidy has reportedly risen from €50 million in 2012 to around €300 million today, which is attributed to the incentivizing of renewable electricity and the fall in the wholesale price of electricity.
Electricity consumers have to reportedly pay a PSO (public service obligation) levy. This levy supports not only electricity from renewables but also electricity from peat. The support to peat-fired electricity should be immobilized soon as it is damaging to the climate.
A research paper by Valeria Di Cosmo and Laura Malaguzzi Valeri has observations over the impact of the cost of subsidy on the electricity bills of consumers, which was offset by the reduction in electricity prices. Over the period to 2012, it was observed that the reduction in emissions of greenhouse gases from renewables was a favorable scenario.
In the future, it would be necessary to decarbonize electricity production. There are cost-effective and new technologies that have been rapidly developed with the changing policy and economic environment needs. The world today needs a positive momentum towards greener energy and the signing-up of the Paris climate accord is a re-affirmation.