European Commission Calls for Massive Renewable Energy Investment

(MoneyWatch)  Hoping to break its reputation as a low-innovation zone, the European Commission is recommending that the area spend almost 8 billion euros yearly between 2010 and 2020 on renewable energy technologies, raising its competitiveness with the United States and Asia.

The EU is coming in behind similar efforts from its two major competitors, the US and China. In the US, the recession provided an excuse to pump a massive amount of stimulus funding into the renewables industry. China has spent less on a dollar-for-dollar basis, but has numerous policies to encourage growth in cleantech companies with high R&D budgets.

For the moment, it's just a recommendation, but the EU is undoubtedly feeling the competitive pressure. Reuters has the full breakdown, but here are the top three areas the Commission wants to spend on:

• Solar power -- Solar comes in at the top of the heap, with 16 billion euros in new incentives for better solar panel manufacturing and improved concentrated solar technology.
• Clean coal -- Carbon capture and storage at coal plants needs 13 billion euros for research, according to the EC, to make the process economical by 2020.
• Smart cities -- This actually includes a number of sub-areas, including transportation, buildings and energy systems; in all, the EC wants to provide 11 billion euros for 25-30 "pioneer cities".

Bioenergy, nuclear and the power grid split another 18 billion euros.

Overall, the plan fits into an increasingly popular solution for climate change: spending a lot on "breakthrough" energy concepts. Yesterday, a group of economists released the latest report pushing tech investment, saying that one to three percent of global GDP per year could lower greenhouse emissions to acceptable rates.

But just throwing money at a problem doesn't mean it will be solved. In the US, second-generation ethanol mandates are failing miserably; bureaucrats were simply wrong about what scientists could accomplish. The same may be true of other energy technologies, especially as-yet unproven schemes like carbon capture.