Energy R and D in Germany

Germany's total national (i.e., combined public and private sector) funding for R&D stood at $42 billion in 1997. The private sector accounted for nearly 62% ($24 billion) of the total, while the public sector accounted for approximately 38%. Since the late 1970s, when the public and private sectors each funded roughly half of Germany's R&D, the private sector has steadily assumed a larger and larger role as the dominant supporter of R&D activity, while overall government funding has remained essentially flat for much of the past two decades. In addition to declining relative to private R&D expenditures, public R&D expenditures in Germany declined by 4% in real terms between 1991 and 1997, to approximately $15 billion. The reduction in R&D investments in the public sector can be attributed in large part to the financial challenges associated with German reunification and related shifts in social priorities including efforts to address high unemployment and to rebuild basic infrastructure in the eastern states. R&D expenditures have also declined as a percentage of the total public budget, from a peak of 3.4% in 1985 to 2.7% in 1996. Energy R&D has been the hardest hit of all major socioeconomic areas of R&D expenditure funded by the German government. Between 1981 and 1997, public energy R&D fell from approximately $1.6 billion to $400 million--a 75% real decline. The $850 million reduction in Germany's fission R&D budget (which constituted two-thirds of government R&D investment in 1985) explains some 90% of the funding decline. Negative public perceptions regarding the safety and environmental impacts of nuclear energy have reduced nuclear power's viability as a long-term energy option for Germany. Discussions of a complete nuclear phaseout are now under way. At the same time, the German government has slashed its investments in fossil energy R&D by more than 90%. While energy efficiency and renewable energy technologies have fared relatively well in comparison with other energy technology areas, government support for all areas of energy R&D has declined in absolute terms since 1990. Remaining public and private sector energy R&D investments focus increasingly technology demonstration and commercialization efforts with relatively short time horizons