The Breakthrough Institute

Mark Muro, a fellow and director of policy at the Metropolitan Policy Program at the Brookings Institution, commented in The New Republic on the disappointingly low levels of clean energy R&D investments allocated by the latest draft of the Kerry-Boxer climate bill, the Senate version of House passed ACES. Muro, who has previously joined the Breakthrough Institute in writing about the need to make clean energy cheap, notes that while R&D investment under Kerry-Boxer is slightly higher than under Waxman-Markey's ACES, it still does not approach the $15 billion per year that Brookings, the Breakthrough Institute, and President Barack Obama have suggested is needed to transition to a clean energy economy.

Today, in The New Republic he writes:

Turning to investments in clean technology and energy innovation, the adjustments are minimal and quite disappointing. Looking broadly to clean tech, Boxer-Kerry would reserve some 12.6 percent of its permit value, or $8.6 billion a year at EPA-projected allowance prices, for clean tech purposes such as investments in renewable energy and energy efficiency, clean vehicle technology, building codes and efficiency retrofit programs, and R&D. By contrast, the Waxman-Markey promises 13.8 percent for clean tech, or roughly $9.7 billion a year--a bit more. Focusing more narrowly on pure R&D, the comparison is a better--but not enough better. Boxer-Kerry on this front would reserve some 1.9 percent of the revenue it raises (or about $1.4 billion a year) for clean energy R&D pursuits, such as the Advanced Research Projects Agency (ARPA-e) and what are termed "Clean Energy Innovation Centers," which is the latest moniker for the high-intensity energy innovation and commercialization institutes we and others have been proposing. These numbers compare favorably with the Waxman-Markey plan, which reserves just 1.5 percent of allowance revenue or just under $1 billion a year for R&D investments. However, in the larger scheme of things, they count as a major disappointment given that Metro Program analysis holds that the nation needs to be spending at least $15 billion a year on energy R&D, of which it least $10 billion a year might reasonably be expected to come out of the cap-trade system.

In sum, an only marginally different starting point in the Senate from where the House ended does not bode well for the changing the trajectory in Congress on the nation's energy and climate response. An acceptable regulatory response is falling badly short on applying sufficient quantities of revenues to the essential cause of energy innovation.