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Why Are Renewable Projects Overlooked?

I have discussed how the substitution of renewable energy offers stable long-term energy supply and employs new technologies, which historically signifies the replacement of old products and/or firms, lower consumer costs and creates an abundance of jobs. So, if renewable energy projects really do stimulate the economy (as the evidence suggests), then why are these projects being overlooked as economically prosperous opportunities? Researchers believe that there are two main reasons for this oversight. The first reason is that the renewable energy sector is fairly new relative to the traditional oil and gas industry (Pittis, 2019). Being a small player in such a major industry makes it very difficult to gain similar influence that traditional fossil fuel corporations have, as the new firms must compete with firms who have established political connections and are successfully lobbying governments at all levels (Pittis, 2019). If a firm is funding political campaigns, it only makes sense for these leaders to promote the firm’s business and to discourage the growth of other lines of business that might threaten the firm’s profitability.

     

The second reason that researchers suggest causes the slow adoption of renewable energy projects is that they are framed as a solution to combat the climate crisis (Pittis, 2019). This might be a positive incentive for some, but many don’t believe that climate change is a crisis and that these projects therefore are wasting effort and resources. If you are motivated by positive returns and do not place high importance on opportunities to cut emissions, of course you would not be incentivised to invest in an industry that is framed in this light. By grouping renewable energy with climate change combat actions, the industry does not get the economic attention it warrants (Pittis, 2019).

Site Summary

Renewable energy sources, such as sun, wind, water and geothermal energy, are derived from resources that are replaced constantly and are not degraded when used. Traditional, non-renewable energy sources (such as coal, oil, and natural gas) exist at a finite quantity that is depleted with each use. Research has shown that the addition of non-renewable energy to the grid not only decreases consumer costs and increases supply stability but also increases company stock values (due to a variety of factors). However, most energy providers and governments are reluctant to provide an opportunity for renewables in their energy supply. This hesitation in accepting sustainable solutions may be explained by the very successful lobbying by traditional non-renewable players in the market and by the reputation renewable energy sources have as a purely green, climate change related solution. Unfortunately, with the observed slow adaptation of renewables into the power grid, energy providers are missing out on the economic potential of sustainable energy. One solution to this shortcoming could be the increased reporting and distribution of relevant study results through mainstream media to reach the general public. The information on this site is aiming at contributing to this solution at a very small scale.

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