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Cost-effectiveness of Clean Energy R&D policy research
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PessimisticRealisticOptimisticNotesSourceFurther notes
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Annual Clean Energy R&D budget in $billion to increase$7.1bn$11.1bn$15.0bnPessimistic assumption: only the $7.1bn/year U.S. public clean energy R&D budget will increase. Optimistic assumption: clean energy R&D budget of all Mission Innovation signatory countries will double from $15bn/year in 2016ITIF analysis based on International Energy Agency data
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Counterfactual percentage increase by 20211%10%50%Pessimistic assumption: Assumes just a 1% increase in the U.S. clean energy R&D budget. Optimistic assumption: Mission Innovation countries committed to double clean energy R&D funding from $15 billion in 2016 to $30 billion by 2021, but will only meet 50% of their targets based on current trends. The optimistic case assumes that they will meet their targets i.e. the other 50% — this is equal to $7.5bn counterfactual increase.ITIF report based on data from the International Energy Agency“[...] MI members committed to double clean energy RD&D funding within 5 years from a baseline of $15 billion in 2016 to $30 billion by 2021. [lcitation ink]
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Chance of ITIF's policy research leading to spending increase1%5%10%Intuition: a grant to a leading US think tank to intensify their work might result in budget increases, especially given the tractability and public support of clean energy R&DSubjective input“If the member countries stay on their current feeble growth trajectory, MI will reach only 50 percent of its target. Based on IEA data, funding for clean energy RD&D was 9 percent higher in 2017. Assuming the same levels of increase for non-IEA members, funding would grow by 53 percent by 2021.[link]”
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Cost: project expenses in $$2,000,000$1,500,000$500,000Pessimistic assumption: $2,000,000 over three years ($667,000/year), equivalent to the mean salary of 4 additional staff. Realistic assumption: $1,500,000 over three years ($500,000/year), equivalent to the mean salary of 3 additional staff. Optimistic case: $500,000 over three years ($167,000/year), equivalent to the mean salary of 1 additional staff.See "Room for more funding analysis [ADD ANCHORED LINK IN THE END"https://itif.org/publications/2018/12/10/omission-innovation-missing-element-most-countries-response-climate-change
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Benefits: Counterfactual increase in clean energy R&D funding / year$710,000$55,250,000$750,000,000See "Room for more funding analysis [ADD ANCHORED LINK IN THE END"
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Benefit/cost ratio: $ in clean energy R&D spending increases per dollar spent on policy0.4371500Leverage: $ in clean energy R&D spending increases per dollar spent on policy
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Benefits minus cost-$1,290,000$53,750,000$749,500,000Absolute counterfactual increase in clean energy R&D funding minus the costs of the policy research
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Energy publications per $1 million dollar 11.52$1 million clean energy R&D funding increase leads to 1-2 additional publications in energy2016 paper Economic analysis of scientific publications and implications for energy research and development
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Cost of a energy publication by donating to this project$2,816,901$27,149$667$1 million / Benefit-Cost ratio2016 paper Economic analysis of scientific publications and implications for energy research and development
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Global income-weighted social cost of carbon per tonne of CO2$177$417$805Global Social cost of carbon (median, US$417 per tonne of CO2 (tCO2); 66% confidence intervals, US$177–805 per tCO2) 2018 study calculated the social cost of carbon on a country-level taking into account differences in future economic damages, GDP and population.
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Cost per tonne of CO2e averted in US energy sector alone$37.88$0.37$0.012017 US Department of Energy Quadrennial Energy Review
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Benefit cost ratio: $ in social welfare created / $$5$1,142$89,804
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Energy source weighted change in cost due to increaseenter the most pessimistic expert here (0.00%)use the measure of central tendency from Diaz paperEnter most optimistic expert average here (-17.78%)Pessimistic: the most pessimistic expert across all studies2018 meta-analysis summarized the results of several studies that all asked several experts by how much clean energy prices would decrease if clean energy R&D were to increase
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Elasticity (i.e. proportionate change in demand given a change in cost)122.9“The elasticity of substitution between clean and dirty energy inputs within the energy aggregate of the nonenergy sector and the elasticity of substitution between clean and dirty capacity in the electricity sector [are] 2 in the electricity-generating sector and values close to 3 in nonenergy industries. “
2017 Substitution between Clean and Dirty Energy Inputs: A Macroeconomic Perspective
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Increase in demand (cost decrease * elasticity)#VALUE!#VALUE!#VALUE!
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Emission reduction#REF!#REF!#REF!
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$ per tonne of CO2 averted#REF!#REF!#REF!
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Benefit cost ratio (Social cost / $ per tonne of CO2 averted)#REF!#REF!#REF!
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Overall benefit minus cost (Potential Gigatonnes averted per overall R&D increase in $billion)
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