Green Economy in a Blue World-Full Report

avoid potential increased costs in the future due to re-design and conflict over environmental issues. Governments can also help by subsidizing the costs of studies, offering funding for information collection and supporting science exchange and collaboration, including in South-South cooperation. The UK has already undertaken strategic environmental assessments for marine renewable energy, and other European and North American governments are planning to undertake such assessments (IPCC, 2011). It is important that strategic environmental assessments are carried out to consider how the impacts of marine-based renewable energy projects combinewith the impacts of other users in the marine environment, such as fisheries, aquaculture, shipping, leisure and tourism as well as other offshore energy projects. 3 Enabling conditions The preceding analysis has highlighted the potential benefits that investment in marine- based renewable energy can bring, in terms of its contribution to low-carbon energy security and employment opportunities. However, challenges were also highlighted with respect to potential conflicts with other marine users and significant local environment impacts if proactive measures are not taken. Without taking into account negative externalities, only offshore wind is close to being cost-competitive with fossil-fuel and nuclear sources. There are many challenges to be overcome before marine-based renewable energy technologies can reach large-scale commercialization, such as high capital costs and logistics around storage capacities, etc. The greatest challenge is thatmanyof thetechnologies are still in an early stage of development, with high uncertainty and associated costs around the timing and scale of the technical potential. This section will explore the main enabling conditions to promote a rapid acceleration of this sector. They are grouped around: policies, incentives and regulation, technology and research, financing infrastructure and societal acceptance. 3.1 Policy, incentives and government regulations Deployment of marine-based renewable energy is most likely when driven by government policy, accompanied by appropriate incentives and publicly funded research programmes (IEA, 2009). Furthermore, given the long lead times of marine-energy projects, a long-term vision

is necessary. This is because policies can help to reduce long-term uncertainty and market risk in the sector. The accompanying incentives can also offset financial risks associated with long payback periods and uncertainty (UNEP, 2011). Governments consequently need to lead the way by establishing and maintaining renewable energy deployment targets and timelines which ideally include a specific target for specific technologies based on the local marine-energy potential. In Europe for example, the EUNational Renewable Energy Action Plan (NREAP) sets ambitious, binding targets for the offshore wind sector (43 000 MW) by 2020. It is crucial that EU Member States abide by these ambitions and maintain the necessary level of support for 2020 in order to provide certainty for investors over the whole supply chain (EWEA). Non-binding targets have also been set in the UK and Canada, the US, Portugal and Ireland are following suit. Incentive mechanisms should follow to support policy implementation. To be most effective, they need to be tailored to the stage of development of each respective technology. • Subsidies : direct subsidies are particularly effective in early stages of market diffusion. They include investment support and grants to reduce capital costs and operating support. For renewable energy in general, subsidies forelectricity-producingrenewable technologies was between US$1.68 billion and US$2.52 billion for 2009. This compares to global fossil-fuel consumption subsidies of US$312 billion in 2009 and US$558 billion in 2008 (IISD, 2011). Subsidies should be applied carefully so that some renewable energy technologies are not supported at the cost of discouraging investment in equally promising alternatives, IISD cautions (2011). Subsidies must also achieve their policy objectives cost-effectively . • Taxes : taxes can be used as an alternative to or in combination with subsidies. Tax revenue from fossil fuels or a carbon tax can be redistributed to marine-based renewable energy sources. Additionally, developers of such technologies can benefit from tax exemptions from general energy taxes, or for initial investments. These already exist for other renewable technologies in several countries; for example, the US and Sweden provide a 30 per cent tax credit for solar photovoltaics, and Australia provides rebates up to AU$8 per watt (UNEP, 2011). • Performance based incentives or feed- in tariffs : feed-in tariffs (FITs) usually take

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