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Wednesday, November 30, 2011
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Google’s decision to shutdown Renewable Energy Cheaper Than Coal should be a wakeup call

By Guest Author, Noah Walker, MEM ’13 Yale School of Forestry & Environmental Studies

Google announced last week that it has shut down Renewable Energy Cheaper Than Coal (RE<C), the Google initiative aimed at developing technology that would drive down the cost of renewable energy.

Under the new leadership of Chief Executive Larry Page, Google has been scaling back its less successful programs across the board. Google’s explanation that other institutions are better positioned to take its renewable energy efforts "to the next level” is understandable and Google has pledged to continue “its work to generate cleaner, more efficient energy," through procuring renewable energy for its data centers and investing in renewable energy companies.

However, while this may be a sound business decision, there is something troubling about Google’s decision to abandon RE<C, particularly in light of the optimism with which it was created four years ago. In December 2007 Page said Google expected, “to produce one gigawatt of renewable energy capacity that is cheaper than coal. We are optimistic this can be done in years, not decades." Google executives also said they anticipated investing hundreds of millions of dollars in “breakthrough renewable energy projects which generate positive returns.”

Optimistic (and perhaps naive) sentiment like this was par for the course in 2007.  Democratic presidential hopefuls, buoyed by the 2006 midterm elections, promised comprehensive climate change legislation. Picking up on the political headwinds, many businesses began building climate regulation, green products, and green marketing plans into their models.  Money flowed into green tech and clean energy startups as venture capitalists projected increased demand driven by stricter regulation, government incentives, and the belief that a game-changing breakthrough could be right around the corner. By the end of 2008, the “Drill Baby, Drill” chorus was momentarily silenced and hope and change were inspiring bold statements like the one Page made a year earlier.

Undeniably, there have been huge technology advances over the last four years. The International Energy Agency (IEA) released a report this week that identifies renewable energy as the “fastest growing sector in the energy mix.” But the reality is that many of these technology advances have been made as a result of government subsidies that are drying up. Others have been made in anticipation of a market shaped by cap and trade legislation. And even with the progress that has been made, renewable technologies are a long way from being able to replace the convenience and capacity of fossil fuels.

Google’s announcement is a blow to those of us who held out hope that private-sector funded technology would let inactive national and global policy makers off the hook.  If the massively well-funded and exceptionally innovative Google has decided its engineers aren’t the people to find a game-changing technology after just $10 million of their promised hundreds of millions in investments in RE<C, what options do other companies have?

Google’s RE<C decision is one more reason on a long list for diplomats meeting in Durban this week (as well as for national politicians in this country) to move forward with robust policies to reduce greenhouse gas emissions and curtail the effects of climate change.  Environmental sustainability and energy security won’t come with the private sector overcoming this challenge on its own. The public should be a partner and lead the way.

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