Green protectionism will slow the energy transition

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under strain. Wind-turbine supply chains have struggled as manufacturers rushed out bigger and more powerful models. Last month Siemens Energy was rescued by a loan guarantee from the German government.

Rising costs, caused partly by higher interest rates, have led developers to abandon once-profitable projects. Five offshore-wind developments have been cancelled in America this year. There is a bigger problem, too.

At a meagre 6%, the average return on capital for solar and wind developers will not entice the $8trn or so of investment needed over the rest of this decade to honour the 11,000GW pledge. One obstacle is slow approval, which delays projects for years and can needlessly tie up capital, lowering returns. In September, in a bid to speed up permits, the European Parliament designated the development of renewables to be of “overriding public interest".

Yet such diktats have not worked in the past; European Union rules already require permitting to take no longer than two years, a limit that member states often breach. Reforms to federal permitting have been proposed in America, but will do little to ease delays at the state or local level. Better to streamline approvals across all tiers of government.

Another obstacle is that, not counting China, too little development is happening in the global south, even though the demand for electricity there is surging. Investors want a premium when putting money to work in emerging markets. One fix is to blend in government funding that takes on some of the risk.