The Economics Of Renewable Energy - 3177 Words

This paper reports on the microeconomic aspect of obtaining the energy that is present in the environment. A number of factors including the rapidly growing demand for energy to fuel economic development, the need by countries to diversify their energy production into environmentally sustainable supply sources while concurrently taking into careful consideration climate change, energy security and economic factors have all served to greatly contribute towards the current accelerated private and public investment in renewable energy. While numerous countries around the world have been able to design attractive incentive structures that aim at inducing private investment in obtaining the renewable energy that is present in the environment,†¦show more content†¦The cost of producing renewable energy from the environment has undergone a significant decrease of the past 15-20 years as a result of drastic enhancements in not only the economies of scale, but also the technology tha t is related to production. Renewable energy’s future prospects are noted to be even more promising in light of the continually falling costs involved in producing this energy as well as the growing awareness of the energy and environmental security benefits that these technologies provide. Renewable energies have variously been defined as those energies that are easily derived from simple natural process and can be constantly replenished from these sources without exhausting these sources. This form of energy is usually derived either indirectly or directly from the sun or from the geothermal heat that is that present from deep within the earth (Jordan-Korte, 2011). The growing global concerns pertaining to the issue of climate change and the effect that this is having on the planet have led to growing interest in the renewable energy technologies. This is exemplified by the fact that a number of industrialized countries have over the years moved to make significant investments in developing countries aimed at developing renewable energy sources under the provisions of the Clean Development Mechanism that was included in the Kyoto Protocol (UNEP, 2008). Developing countries are investing in renewable