Global Public Energy RD&D Expenditures Database: A Data Analysis of Government Investment Patterns
By Kate Chi
Reducing global greenhouse gas emissions and mitigating climate change impact require consistent investment towards innovating renewable energy and storage technologies and increasing energy efficiency. As private business innovations see progress, government expenditures are an explicit measure of national priority and commitment towards energy technological advancements. The Climate Policy Lab recently updated an expansive dataset that reports global public expenditures on the research, development and demonstration of energy efficiency, fossil fuels, renewable energy sources, nuclear, hydrogen and fuel cells, power and storage technologies, other cross-cutting technologies and research and unallocated budgets from 2000 to 2022.[1]
In our database, total global government RD&D increased from 13.2 billion in 2000 to 30.4 billion dollars in 2022. This increase calls for robust reporting and monitoring systems to ensure the integrity of federal spendings and to assess the effectiveness of financed projects. Expenditures on nuclear energy are consistently the largest among all energy categories: 8.6 billion dollars were allocated to nuclear in 2022, accounting for 28.3% of total spendings (Figure 1; Figure 2). Public investment in energy efficiency innovations saliently increased from 2 billion dollars in 2000 to 6.2 billion dollars in 2022. Expenditures on hydrogen and fuel cells also rose from 2 billion in 2021 to 3.8 billion dollars in 2022, accounting for 12.4% of total spending. However, public investment in the innovation of power and storage technologies is comparatively low and accounts for only about 6% of total expenditures in 2022.
Globally, present emissions reduction policies remain off track to limit global warming to 1.5°C above pre-industrial levels and to reach net-zero carbon emissions by 2050. While countries recognize the importance of energy transition as reflected in the fact that public fossil fuel RD&D expenditures have decreased since 2009, governments worldwide still allocated 2.1 billion dollars in 2021 and 1.5 billion dollars in 2022 towards fossil fuels research, development, and demonstration. To meet climate goals, governments should raise national ambition for emissions reduction targets to incentivize low-carbon innovations and devise fossil fuel phase-out strategies in alignment with sustainable development goals.
Note: Figure 1 plots global public energy expenditures in each category from 2000 to 2022 in million U.S. dollars. Figure 2 reports global public energy RD&D expenditures in million U.S. dollars in 2022. Data is taken from Myslikova, Z., Gallagher, K. S., Zhang, F., Narassimhan, E., Oh S., & Chi, K. (2023). “Global Public Energy RD&D Expenditures Database.” Climate Policy Lab, The Fletcher School, Tufts University.
While aggregated global data demonstrate defined patterns, the distribution of public energy RD&D expenditures varies across income group and geographical region. In 2022, high-income economies allocated 22.7% of total government energy RD&D expenditures towards energy efficiency and significant additional spendings on nuclear energy, hydrogen and fuel cells and other cross-cutting technologies. Meanwhile, nuclear energy accounts for the largest spendings in lower-middle and upper-middle economics (Figure 3).
The global energy crisis has now become apparent due to energy market contraction, economic recovery from the pandemic, and Russia’s invasion of Ukraine in 2022. To expand and sustain access to electricity for residential, commercial, and industrial use, energy storage technologies should be advanced. However, innovations of power and storage technologies receive less investment across all income groups. And lower-middle income economies distribute far less expenditures to innovations of storage technologies than high income or upper-middle income economies (Figure 3). To increase energy access in developing countries, governments should appropriately prioritize innovations in power and storage technologies to extend grid connectivity to remote areas and encourage economic development in an equitable manner.
Note: Figure 3 plots the percentage share of total public energy expenditures for each category by income group in 2022. Data is taken from Myslikova et al. (2023). Income groups are categorized by the World Bank (2023).
The distribution of RD&D expenditures also saliently differs across regions. Energy efficiency accounts for a large share of total expenditures in North America, East Asia and Pacific and Europe and Central Asia at 27.4%, 25.2% and 17.5% respectively (Figure 4). In contrast, Latin America allocated more than half of total government energy RD&D spendings on power and storage technologies, 30.4% on renewable energy sources and 16.8% on cross-cutting technologies and research. South Asia and sub-Saharan Africa allocated the majority of government energy budgets on nuclear energy research, development, and demonstration in 2022. With regard to public fossil fuels RD&D expenditures, East Asia and Pacific distribute the largest share of total budgets to fossil fuels: 437.5 million dollars in 2022.
Note: Figure 4 plots the percentage share of total public energy RD&D expenditures in 2022 for each category by region. Data is taken from Myslikova et al. (2023). Geographical regions are categorized by the World Bank (2023).
Clean energy innovations supported by public finance are instrumental to meeting net-zero goals and the climate objectives outlined in the Paris Accord. To do so, governments worldwide must raise emissions reduction targets and distribute public expenditures towards the innovations of renewable energy, storage technologies, and energy efficiency to scale up sustainable power production. Governments should consider renewable energy potential, natural resources endowments, and economic development in the local context to equitably distribute expenditures. Because public expenditures are largely supported by tax revenues, guidelines should be established to monitor and audit government-financed energy RD&D projects. Although country data is not complete in all years from 2000 to 2022 and comprehensive information on the breakdown of expenditures in each energy category is lacking, data published by the Climate Policy Lab showcases explicit public investment patterns and provides an understanding of government financing and commitment towards energy technological innovations.
The database began with data compilation of U.S. Department of Energy RD&D Spending by Kelly Sims Gallagher and Laura Diaz Anadon. Fang et al. (2021) utilize an earlier version of this database and review investment from 2000 to 2018. An article by Zdenka Myslikova also reviews Mission Innovation (MI) countries and provides further details of data collection. Zdenka Myslikova and I led the most recent update of the Global Public Energy RD&D Database. We are also thankful for the release of Energy Technology RD&D Budgets by the International Energy Agency and data collection efforts from Easwaran Narassimhan and Soyoung Oh at the Climate Policy Lab.
Kate Chi is a Junior Research Fellow at the Climate Policy Lab at The Fletcher School.
[1] Country data is not complete in all years from 2000 to 2022. Data is taken from Myslikova, Z., Gallagher, K. S., Zhang, F., Narassimhan, E., Oh S., & Chi, K. (2023). “Global Public Energy RD&D Expenditures Database.” Climate Policy Lab, The Fletcher School, Tufts University.
References
Myslikova, Z., Gallagher, K. S., Zhang, F., Narassimhan, E., Oh S., & Chi, K. (2023). “Global Public Energy RD&D Expenditures Database.” Climate Policy Lab, The Fletcher School, Tufts University. Accessed January 2, 2024.
World Bank (2022). World Bank Country and Lending Groups. Retrieved from https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-group