Recent Success of Renewable Energy
Just a couple of weeks ago, the National Geographic published an article describing how wind and solar energy sources are thriving, despite the decline in prices of fossil fuels. Regardless of oil prices reaching a 12-year low, the clean energy market continues to boom (Koch 2016). While the profits of fossil fuel industries are crippling, renewable energy source investment in 2015 was almost six times as high compared to 2004 (Koch 2016). While fossil fuels are cheap and expendable, renewable energy sources such as windmills have a huge capacity for storing and converting energy. Regardless of the stigma that renewable energy sources are very costly, renewable energy sources are becoming more and more cost efficient, which gives more incentive for stakeholders to “go green.” Using the Stakeholder Analysis to compare the power, attitude, proximity, and interests (PAPI) of the stakeholders involved will explain the positive trend of renewable energy in 2015. First I will conduct a PAPI analysis on the stakeholders, then I will explain and compare their different motivations, and lastly I will give evidence of the recent success of renewable energy.
Because tangible costs carry a lot of political weight, different stakeholders have different perspectives on switching to renewable energy sources. The main stakeholders in this trend are Americans, the government, companies that use fossil fuels, and environmentalists. As a whole, Americans are close to the issue, are not influential, are somewhat supportive, and have a medium interest. The government on the other hand is very close to the issue, influential, supportive, and interested. Companies that use fossil fuels are close to the issue, somewhat influential, not supportive, and have a strong interest. Lastly, environmentalists are close to the issue, somewhat influential, very supportive, and have a strong interest.
Companies that use cheap coal and other fossil fuels are likely to resist the switch to renewable energy because of high costs, while environmental organizations such as the EPA are likely to support the switch because of strong interests in promoting the environment. Although reducing air pollution will benefit all Americans by increasing their overall quality of life, everyday citizens cannot directly change policy. International policy also affects government decisions. Recently in Paris, many developed countries met to increase environmental standards, and the U.S. government agreed to cut emissions of greenhouse gases nation-wide (Koch 2016). Following the conference in Paris, the Obama administration is requiring American power plants to cut fossil fuel emissions 32 percent by 2030 (Koch 2016).
Because the government is a powerful stakeholder that has recently been incentivized to cut fossil fuel emissions nationally, the current prosperity of renewable resources has become a more recent phenomenon. While “coal is facing steeper costs partly because of tighter U.S. regulations, and gas is already using technologies that are highly efficient” (Koch 2016), renewable resources continue to improve in cost efficiency. Koch (2016) states that while gas prices have been low, the sales of SUVs have gone up, but the sales of electric vehicles are also rising globally. In addition, electric vehicles are becoming more desirable for consumers because of high battery life, dedicated parking spots, and use of HOV lanes (Koch 2016).
The momentum of “going green” is increasing because of the change in stakeholder opinions. Increased governmental and public support explains why the success of renewable energy is finally becoming successful, even when gas and oil prices are low. While companies that use cheap fossil fuels are generally against the high costs of renewable energy, the increase in cost efficiency and in consumer support as well as the long-term price cuts of switching to renewable energies will likely attract them. If the benefits of renewable energy can outweigh the costs in relation to fossil fuels, all stakeholders will be much more likely to support the switch. The Stakeholder Analysis demonstrates that just because some stakeholders, such as companies or environmentalists, may have a strong interest or attitude toward a certain issue, doesn’t mean they will have more influence on the issue. Likewise, American stakeholders are close in proximity to the issue but are not influential until a great number of them come together as a more forceful unit. Ultimately, the government stakeholders have had the most influence on the recent success of renewable energy sources because they directly affect company quotas to cut green house emissions, which also encourages technological advances and increased cost efficiencies in the renewable energy sector.
Koch, Wendy. 2016. “Why Solar And Wind Are Thriving Despite Cheap Fossil Fuels.”