Why do you need to subsidize investment in clean technology research? Won market forces and the profit motive ensure that the sector is adequately funded?
Private investment in vital but it is unlikely to be sufficient to meet the challenge of climate change. Global warming is, “the largest ever market failure”, (in the words of UK Prime Minister, Gordon Brown.) Emissions of CO2 involved huge external costs that were not factored into production decisions. Likewise, clean technology research has huge external benefits which will not all be factored into private investment decisions. Therefore additional funds will be necessary to raise clean technology R and D to the optimal societal level.
