--- title: "ITIF Calls for New Approach to Climate Change: Driving Clean Energy Solutions to Price/Performance Parity " summary: |- A new report concludes that trying to force clean energy adoption with subsidies, regulatory mandates, and exhortations for behavior change will fail. Only when we have the technologies we need that are at price and performance parity with the dirty technologies that need to be replaced, will energy users be willing to switch to climate-friendly energy solutions. date: "2023-07-10" content_type: "Press Releases" canonical_url: "https://itif.org/publications/2023/07/10/itif-calls-for-new-approach-to-climate-change/" --- # ITIF Calls for New Approach to Climate Change: Driving Clean Energy Solutions to Price/Performance Parity WASHINGTON—The dominant narrative guiding climate policy is that the crisis is so severe that countries, companies, and consumers must act to reduce climate emissions, even if it is not in their individual economic interest to do so. But [a new report](https://itif.org/publications/2023/07/10/beyond-force-a-realist-pathway-through-the-green-transition/) from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, concludes that trying to force clean energy adoption with subsidies, regulatory mandates, and exhortations for behavior change will fail. Only when we have the technologies we need that are at price and performance parity with the dirty technologies that need to be replaced, will energy users be willing to switch to climate-friendly energy solutions. This means the key focus of governments should be to put in place clean energy technology policies to drive down costs and improve performance to match the existing energy system. “Climate change is a global problem, so the solutions need to be global. In particular, they must meet the needs of low-income countries where demand for energy is rising fastest, and where there is little to no willingness or ability to pay a green premium,” said Robin Gaster, a nonresident senior fellow at ITIF, who co-authored the report. “Subsidies and regulatory mandates in particular states or nations are mostly dead ends. The only realistic way to spur the green transition is to develop and support clean technologies that can reach effective price and performance parity with dirty ones. Then market forces will lead to rapid adoption at scale.” ITIF’s report details how the current global policy environment for clean energy has been shaped by narratives of a “climate crisis” and “emergency,” which has led governments to adopt a force-first approach, bribing, mandating, and coercing corporations, individuals, and other governments to change their behavior. This approach also has produced a “kitchen sink problem” in which governments are trying to do everything everywhere all at once, without considering costs, tradeoffs, or effectiveness. ITIF calls for a fundamentally new strategy that focuses on achieving price/performance parity (P3) to marshal market power as the main lever to drive the green transition, not subsidizing or mandating costly technology, or relying on “hair shirt” demands to radically cut energy use. The report argues for this targeted approach guided by five pillars: 1. **All solutions must be global**. For example, mandating the sale of electric vehicles in California or even the United States is not a global solution. The West should instead focus on developing technology and solutions that lead to electric vehicles that consumers, especially in low-income countries, would voluntarily choose to buy without subsidies. 2. **Recognize the growth imperative**. When countries are forced to choose between green and growth, they will always choose growth, productivity, and lower costs. 3. **Price and performance both matter to P3**. Wind and solar are price competitive in some regions with fossil energy, but only when the wind is blowing or the sun is shining. Parity would require that renewables meet the price and reliability of fossil fuels, and not just for eight hours a day. 4. **We don’t have all the technologies needed to solve climate change at a price competitive with existing fossil fuel-based energy.** Despite the claims of many advocates that we have all the technologies needed to solve global warming, many of those technologies still require large subsidies at the point of delivery, and even fewer are ready to be scaled up to replace all or nearly all dirty fuels. 5. **Differentiate technology pathways using P3**. The P3 lens helps policymakers distinguish between technologies and define appropriate government policies. While some technologies are on the path to P3 and may need government help to move down the cost curve, other technologies may never achieve P3 no matter the scale of production. They require a different approach focused on technological innovation that can shift the cost curve entirely. So, a clean energy technology policy to drive innovation is central. The report uses several case studies to highlight the benefits of this approach and provide more context for determining which technologies are most likely to achieve P3 and which ones aren’t. Technologies like sustainable aviation fuel and hydrogen are analyzed, looking at the potential pathways when increased RD&D could be most helpful. “Without the P3 framework, clean energy policies will be futile,” said ITIF President Robert D. Atkinson, who co-authored the report. “The only effective way to tackle climate change is to acknowledge economic and political realities and by adopting a policy framework that uses them to our advantage.” [Read the report.](https://itif.org/publications/2023/07/10/beyond-force-a-realist-pathway-through-the-green-transition/) --- *Source: Information Technology & Innovation Foundation (ITIF)* *URL: https://itif.org/publications/2023/07/10/itif-calls-for-new-approach-to-climate-change/*