It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO2 emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explained why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enabling the rapid adoption of low-carbon energy sources and drastically reducing CO2 as quickly as possible. Part 4 discusses why adaptation through innovation is central to preparing for the impacts of a warmer world and buying us time to drastically cut emissions.
The door is closed to mitigating away all of the potentially dangerous impacts of climate change. We’ve simply waited too long to take sweeping action and provide a cheap and viable clean energy substitute to fossil fuels. In Part 1 of this series, we discussed that even so, the key objective of climate mitigation efforts is still the same – we must drastically cut emissions as quickly as possible (and Part 2 and Part 3 discussed how).
Yet the warmer world we have locked ourselves into does inform other policy choices. In particular, building our resilience to extreme weather and increasing our adaptive capacity is now equally as important as mitigation and should be treated as such. Advocating for adaptation and mitigation is nothing new – in fact it’s common place. The argument here is that adaptation must now be a cornerstone of all climate policy choices – domestic or otherwise.
When it comes to climate adaptation policymaking, a lot of work needs to be done, as it’s still a topic that has been largely ignored by U.S. decision makers. In fact, the most immediate hurdle is for decision makers to stop paying lip-service to the need for an adaptation policy and begin aggressively implementing real resilience efforts.
It is time to take stock of our current climate trajectory, and consider what it means for climate policy. In Part 1 of this week long series, we argued that our current climate trajectory means we must 1) redouble efforts to reduce CO2 emissions as quickly as possible, and 2) we must proactively build resilience to the uncertain impacts of a changing climate. Part 2 examined why voluntary economic contraction is a not a viable strategy for reducing emissions “as quickly as possible.” Part 3 explains why implementing a robust clean energy innovation strategy is the key way to making clean energy cheaper than fossil fuels, thus enable rapid adoption of low-carbon energy sources and drastically reducing CO2 as quickly as possible.
As we wrote in Part 1 and Part 2 of this series, our current climate trajectory and global political economy dictates that the only way we can limit potentially dangerous climate change impacts, above the dangerous impacts we’re already locked into, is to redouble efforts to reduce global CO2 emissions as quickly as possible. To rapidly decarbonize the economy requires greatly accelerating the replacement of fossil fuels with low or zero-carbon clean energy substitutes. Implementing the right strategies to do so raises numerous stark policy choices and issues.
The most fundamental issue is that energy is largely a fungible commodity – the electricity coming out of your wall socket doesn’t have any immediately tangible differences whether it comes from a coal plant or a wind farm. The only immediate difference is cost. This key reality means that the rate of adoption for new clean energy technologies is largely moderated by two principal levers:
(1) The level of public tolerance for paying for the cost of cleaner energy in the form of higher energy costs, subsidies, or reduced economic welfare; and
(2) The cost competitiveness of clean energy compared to fossil fuels.
The Great Recession has given way to a less-than-great recovery and the pressure is on for Washington to respond. In an upcoming debate, two leading economic thinkers will go toe to toe on whether Keynesian economics offers a credible economic growth agenda.
In the first issue of Breakthrough Journal, ITIF President Rob Atkinson takes traditional Keynesians to task for pushing for additional demand-side public pump priming and for what he sees as their focus on distribution of the economic pie rather than the growth of the pie. In a response, Dean Baker, co-director of the Center for Economic and Policy Research, rejects Atkinson's critique and calls it a "potshot" that dismisses research showing that economic growth is in fact demand-driven.
The two have agreed to hash out their differences in a public debate co-sponsored by ITIF and Breakthrough Journal. Is traditional stimulus spending and assistance to individuals a useful but inadequate response to the Great Recession? Does the slow recovery suggest something more is needed to restore U.S. competitiveness, such as corporate tax reform that encourages innovation and investments in high-end manufacturing, more rigorous trade enforcement, and government support for R&D? Where do today's Keynesians and innovation economists find common ground? Join us for a thought-provoking and candid exploration of progressive economic policies at a historic crossroads.
Debate: Progressive Economics and the Great Recession Date and Time: Wednesday, February 1, 2012, 9:30-11:00 AM Location: ITIF, 1101 K Street NW (Suite 610A) Washington, DC 20005
Participants:
Robert D. Atkinson
President, Information Technology and Innovation Foundation (Presenter)
Dean Baker
Co-Director, Center for Economic and Policy Research (Presenter)
John Dimsdale
Washington, D.C. Bureau Chief, American Public Media (Moderator)
Before adjourning to watch yule logs and eat holiday hams, Congress actually managed to pass a 2012 budget bill. ITIF's Matthew Stepp provided us with an early analysis of the bill's impact on energy innovation funding. Funding for key Department of Energy (DOE) innovation offices are up by a modest 2.5 percent relative to the 2011 budget, with impacts on specific programs summarized in the table below...
The Fiscal Year 2012 budget dedicates $768 million to the DOE Office of Nuclear Energy, a nearly 6 percent increase from FY2011 levels. As with overall funding for DOE innovation offices, the 2012 budget thus halts and begins to reverse the declines in federal energy innovation funding initiated in the 2011 budget, which saw nuclear energy funding fall 15 percent (or $132 million) from 2010 budget appropriations.
By Matthew Stepp, Clean Energy Policy Analyst at the Information Technology and Innovation Foundation and 2010 Breakthrough Generation Fellow." Originally published at the ITIF Blog.
The FY2012 Omnibus Appropriations bill, passed through the House and Senate conference committee last week, provides a small 2.5 percent increase in DOE energy innovation investment-related Offices and programs compared to FY2011. The budget includes key investments for new Energy Innovation Hubs, next-generation small modular nuclear reactor (SMR) RD&D and licensing programs, as well as a boost in funding for ARPA-E. Compared to the roughly $800 million cut to energy innovation investments in FY2011 and the additional cuts sought in the House version of the appropriations bill, the FY2012 budget provides renewed, albeit modest, government support for developing affordable and viable clean energy technologies.
To be clear, the 2012 federal budget still falls short of FY2010's peak in energy innovation investments made through the Stimulus and represents only 72 percent of what the President requested for next year. It's vital that more work is done to increase public investments in clean energy innovation, as the government must play an energetic role in supporting the development of next-generation technologies. However, the FY2012 budget does take steps to stabilize, and in some cases boost, high-impact clean energy investments (Figure 1, below). Below are a few of the highlights:
By Mark Caine, Research Officer at the London School of Economics, Co-ordinator for the Hartwell Group, and 2010 Breakthrough Generation Fellow
Ideas Whose Times Have Come
Something profound is happening in the world of energy and climate policy.
In the wake of another tepid COP conference that, once again, failed to put the world even "on a path to solve the climate problem", previously heterodox ideas are entering mainstream thinking.
From the inadequacy of the Kyoto protocol and the immediate imperative for adaptation to an innovation-centric climate policy, no-regrets action on non-CO2 forcers, and energy access for all: a set of pragmatic ideas that the Breakthrough Institute, Breakthrough Senior Fellow Roger Pielke Jr., the authors of The Hartwell Paper, and others have advocated for years -- often to an onslaught of cynical opposition -- are now being promoted as front-line strategies to manage our complex set of energy and climate challenges.
Take the Kyoto protocol, which despite its well-documented structural flaws has been treated for years as the only game in town--the plan A for which "there really is no plan B". Now, realizing that the modest agreement reached at Durban is little more than a face-saving maneuver that means, at best, an eight year punt on universally binding emissions reductions, commentators are beginning to sing a different tune.
"Kyoto was built to fail," reports left-of-center UK paper The Guardian. The process has faltered, writes John Broder in the New York Times, because it taken on "too great a task." Political analyst Andrew Charlton reports from down under that there is, in fact, a plan B, consisting primarily of policy prescriptions that will sound remarkably familiar to anyone who has read Fast, Clean, and Cheap, The Hartwell Paper, The Climate Fix, or a growing body of books and academic articles advocating innovation-centric energy policies combined with robust adaptation measures and a commitment to universal energy access.
Perhaps more than any, this last issue has sailed from the margins to the mainstream. A key tenet of the 2010 Hartwell Paper, the imperative to empower the world's poor through the provision of universal energy access -- and bring energy poverty to the center of energy and climate debates -- has become a cause celebre at the UN Foundation. Did you know that 2012 is the International Year of Sustainable Energy for All? Finally, something everyone from Ban-Ki Moon to nu metal band Linkin Park can agree on!
In all seriousness though, the global community's newfound support for universal energy access is a heartening development--not least for the 1.3 billion people lacking electricity and the 2.7 billion people burning dung and sticks to cook and heat their homes. To be sure, the emissions implications of empowering these people using available technology remain inconclusive: the IEA's rosy estimate of a .7% increase in global CO2 emissions defines 'access' for rural denizens at a paltry 250 kWh/year, 1/55th of the US average and 1/32nd that of ultra-efficient Japan (World Bank data). Yet any steps to bring modern energy to the energy-poor are justifiable in their own right on basic principles of equity, not to mention their contingent benefits for public health, education, economic opportunity, andenhanced resilience to future climate impacts.
Post-"Post-pollution"
In his New York Times review of the shifting dynamics in the energy and climate debate, Andrew Revkin cites both Roger Pielke Jr. and the authors of The Hartwell Paper, crediting them for helping spread this "post-pollution" emphasis on climate resilience, energy modernization, and strategic public and private investment in clean energy innovation. Revkin is nearly alone amongst journalists in tracing back the roots of these approaches, but a frequent lack of attribution is predictable. Indeed, the broad, uncoordinated adoption of these "post-pollution" framings and policy approaches may have been inevitable, a reflection less of their progenitors than their sensibility.
As these framings and policy ideas become more widely accepted, the challenge for those of us who have long advocated these positions, including the Hartwell Group network which I work to coordinate, will begin to shift. As once-heterodox problem definitions and policy approaches from the Breakthrough Institute, the Information Technology and Innovation Foundation (ITIF), the Hartwell Group, and others enter mainstream discussion, what can we offer going forward?
Arguably, the most important thing we must do now is deliver top-quality research and analysis on the hard questions of innovation that are not yet being addressed in most climate policy discussions. Though many have accepted rapid innovation as a necessity, few have actually opened up the "black box" of innovation to understand what specific kinds of innovation we need, how to fund and scale them, and how to overcome persistent challenges such as rent-seeking behavior, energy efficiency rebound and backfire, and the "valleys of death" that plague the innovation and commercialization process. Understanding the need for innovation is not the same as knowing how best to do it.
The Breakthrough Institute has already taken up this effort, backing up its long-standing support for innovation as an energy and climate solution with detailed analysis of the mechanics of how innovation works and, by extension, how to spark, accelerate, direct, fund, and scale it. And the Hartwell Group is working to coordinate a network of international scholars and analysts to further develop key recommendations for actionable and pragmatic climate solutions.
This work alone won't solve the myriad complex, interconnected energy and climate challenges that face us. But it will help lay the foundation for a safer, more prosperous, and more equitable future--a future in which the essential functioning of the earth system is preserved and all people have access to safe, reliable energy and protection from the vagaries of extreme weather, whatever its cause.
"An oftentimes myopic focus on the budget deficit has obscured the fact that America actually faces three deficits--the budget deficit, the trade deficit, and the investment deficit--that, if left unchecked, could total over $41 trillion in the next 10 years. Reducing all three deficits, not just the budget deficit, is critical to future economic prosperity."
The only way to reduce the three deficits, we argue, is to increase productive public investments in innovation, productivity, and competitiveness, while making targeted cuts to areas of consumptive government spending.
More economic experts are embracing the idea that the only way to both climb out of our economic doldrums and close the budget deficit, is through growth-enhancing public investments.
In last week's Washington Post, Fareed Zakaria argues that federal investment is central to long-term economic growth. Yet over the last two decades America has failed to make long-term investments to sustain economic prosperity. In "Taking on the Three Deficits," we estimate that America's "investment deficit" now totals $2.5 trillion and may grow to $5 trillion by 2020. "If we want the next generation of growth," Zakaria writes, "we need a similarly serious strategy of investment."
You can read the full "Taking on the Three Deficits" report here.
In a new report from the Breakthrough Institute Energy and Climate Program, we document the challenges facing American energy entrepreneurs seeking to commercialize advanced energy technologies to enhance US energy, economic, and environmental security. Innovative public policy solutions are needed to support private sector innovation and overcome the "valleys of death" that trap too many promising advanced energy ventures.
The United States faces an urgent national imperative to modernize and diversify its energy system by developing and deploying clean, and affordable advanced energy technologies. Domestically, developing new energy supplies and ensuring affordable energy prices will bolster American competitiveness and economic growth. Reducing the cost of advanced energy technologies is the key to finally ending a dependence on volatile global oil markets that holds the American economy hostage, compromises our foreign policy, and bleeds more than a billion dollars a day out of the US economy.
Abroad, the military has already begun deploying innovative clean energy technologies to reduce the high cost, paid in both lives and money, associated with transporting fossil fuels across war zones. Moreover, the impending risks posed by climate change compel the accelerated improvement and widespread deployment of low-carbon energy technologies. Countries around the world are already recognizing the critical need for new advanced energy technologies and are positioning themselves to lead the next wave of energy innovation.
Global energy demand is rising steadily, straining the ability of conventional energy systems to keep pace. For security, economic, and environmental reasons, the global energy system is thus modernizing and diversifying. Developing and developed nations alike are seeking new forms of advanced energy technologies that reduce dependence on foreign nations, insulate economies from volatile energy markets, and are cleaner and thus less costly from a public health perspective. Supplying this $5 trillion global energy market with reliable and affordable clean energy technologies thus represents one of the most significant market opportunities of the 21st century.
Despite this clear energy innovation imperative, the United States and the world remain overly reliant on conventional fuels and exposed to the price volatility and persistent public health impacts that reliance entails. The necessary course of energy modernization remains impeded by the high cost and barriers to scalability of today's clean energy technologies. These are barriers that only innovation can overcome.
However, two obstacles currently block the progress of energy innovation, obstacles which can only be addressed through effective public policy. Due to pervasive market barriers, private sector financing is typically unavailable to bring new energy innovations from early-stage laboratory research to proof-of-concept prototype and on to full commercial scale. This leads to two market gaps that kill off too many promising new energy technologies in the cradle. These gaps are known as the early-stage "Technological Valley of Death" and the later-stage "Commercialization Valley of Death." This pair of barriers is endemic to most innovative technologies yet is particularly acute in the energy sector. As a result, many innovative energy prototypes never make it to the marketplace and never have a chance to compete with established energy technologies. These valleys of death particularly plague capital-starved start-ups and entrepreneurial small and medium-sized firms, the very same innovators that are so often at the heart of American economic vitality.
In effect, the current lack of public policy to address this pair of barriers acts to protect today's well entrenched incumbent technologies from full market competition, while hamstringing American entrepreneurs and innovative ventures seeking to develop and deploy advanced energy technologies. The implementation of creative policies to effectively deal with the Technological and Commercialization Valleys of Death will foster vibrant competition in the energy sector and help drive technological innovation and job creation throughout the economy as a whole.
In the past, the United States has driven immense and far-reaching technological transformations. As the pioneering global innovator of the 20th century, the United States built the world's largest economy because of the ingenuity and creative enterprise of its entrepreneurs and citizens. Each step of the way, proactive public policy has played a crucial role in driving American innovations, from railroads and jet engines to microchips, biotechnology, and the Internet, unleashing long waves of economic growth and shared prosperity. New and advanced clean energy technologies afford the same opportunities to the United States today--if public policy is shaped in a way that allows American innovators to thrive once again.
Energy Secretary Steven Chu will appear today before the House Energy and Commerce Subcommittee on Oversight and Investigation to answer questions on the DOE Loan Program Office. While there are important questions to answer regarding the role of government in technology investment and energy innovation, these questions are unlikely to be the main subject of today's hearing.
What was the original purpose of the Section 1705 loan guarantee program, and what was the expected impact on federal budgets and taxpayers?
In 2009, Section 1705 was added to the DOE Loan Programs Office (LPO), established by the bipartisan Energy Policy Act of 2005. The program was originally appropriated $6 billion in federal funds to provide reserves to cover expected losses on a portion of the loans issued by the agency. This $6 billion would be leveraged to offer a significantly higher loan guarantee volume, unlocking substantial debt finance that would be supplied by private banks. The original $6 billion in funding was raided by Congress to provide funds for the Cash-for-Clunkers program in 2009, however, and ultimately 1705 ended up with a $2.5 billion pool to cover expected loan losses.
Congressional investigators should prioritize clean energy commercialization solutions over political grandstanding and focus on identifying key lessons from the experience of the Loan Programs Office. Congress should put these lessons to immediate use to reform federal involvement in clean energy commercialization and establish a new Clean Energy Deployment Administration.
Step right up to see the latest chapter in the ongoing political circus surrounding the bankruptcy of solar manufacturer and federal loan guarantee recipient Solyndra. Today's main attraction: Secretary of Energy Steven Chu's long-awaited appearance before the eager Republican members of the House Energy and Commerce Committee.
Key questions remain about the ill-fated solar manufacturer's dramatic demise earlier this year. Unfortunately, investigations on the Hill long ago veered into the realm of political point-scoring, rather than a serious inquiry designed to improve federal support for nascent and nationally-critical clean energy technologies.
Taking a step back from the circus on the Hill, let's make two things very clear.
First, the global energy system is modernizing and diversifying. For an array of motivations from public health and climate change to security and economic growth, today's economies demand a 21st century suite of clean and reliable energy technologies to supply the $5 trillion-and-growing global energy market.
Second, the DOE Loan Programs Office was never particularly well equipped to effectively address the "Commercialization Valley of Death"--the persistent lack of risk-tolerant capital that plagues American innovators and entrepreneurs working valiantly to improve the nation's energy, economic, and environmental security.
In the wake of Solyndra's failure, pundits have latched on to a simple, compelling narrative: government can't do energy right.
From synfuels to solar panels to "clean coal" (written, inevitably, with knowing quotation marks), demonstration projects funded by the Department of Energy are described as one failed white elephant after another. Today the DOE is the agency everyone loves to hate (and, at least in Texas Gov. Rick Perry's case, the agency to forget).
What gets left out (and forgotten) is that virtually every one of today's major energy technologies exists thanks to sustained US government investments in research, development, and demonstration. Consider:
Solar panels were pioneered by NASA, and have seen massive price declines thanks to government research, development, and deployment. Industry leader First Solar is a direct descendant of DOE research as are Nanosolar and GE's thin film solar division.
The global market for clean energy products grew to $243 billion in 2010, a year in which China and Germany both captured a greater share of this global investment than the United States. That has led many (myself included) to worry about the erosion of US competitiveness in a set of clean energy technology products--from solar and wind to nuclear and advanced batteries--originally invented in America.
Yet this growing market for clean tech is almost entirely dependent upon public subsidy and policy support. To be blunt: today's clean energy markets are artificial, and without perpetual policy support, conventional clean energy products could not compete in most global energy markets.
Across the globe, cash-strapped governments and recession-hit publics are pulling back clean energy subsidies, revealing the ephemeral nature of today's clean tech markets. In the last year, Spain, Italy, and the United Kingdom have all slashed feed-in tariffs for solar and certain other clean energy technologies. In America, expiring tax credits and fading stimulus investments are set to send federal clean tech expenditures plunging 75 percent from 2009 to 2014, according to our research.
There are a hostof reasons why targeted policies and smart public investments in emerging clean tech sectors are justified. But clean tech business leaders and policymakers alike must be crystal clear: the true economic rewards in clean energy industries will not come from producing technology for subsidy-created markets that vacillate wildly with the public mood and the business cycle.
Without substantial innovation to improve the performance and reduce the cost of clean energy technologies, the promise that the clean energy sector might become economically viable, much less a cornerstone of American economic revival, will never be realized. The real clean energy race is thus to invent, commercialize, progressively improve, and mass-produce cheap and reliable clean energy technologies that can compete on cost not just with international competitors but also with fossil fuels.
In short, the race is to make clean energy cheap and subsidy-independent.
A new report by the Breakthrough Institute and Third Way argues that the United States needs to rethink its approach to manufacturing to incentivize and enhance next generation "advanced manufacturing" and worker training.
Stagnant and out-dated policy debates in Washington are the reason that advanced, high-tech products are mostly manufactured outside of the United States, according to a new paper jointly issued by two think tanks. The report, from the Breakthrough Institute and leading moderate think tank Third Way, argues that American manufacturing could experience a resurgence with a focus on complicated and technology-intensive manufacturing products.
"The Kindle has revolutionized how people read, but even though it was born in Silicon Valley, Amazon makes it in Taiwan," said Director of Third Way's Economic Program and the report's co-author, Ryan McConaghy. "When looking for the precision needed to build the e-reader, Amazon had to look abroad for experienced manufacturers because the technology was no longer available here. It's a huge missed opportunity."
By Alex Trembath. This post was originally published at Energetics.
The last few weeks have been pretty cool, if your definition of cool, like mine, involves a bevy of new reading materials extolling the benefits of public investment in technology innovation.
New report from the American Energy Innovation Council (already blogged about here and here), featuring the wisdom and research of Bill Gates, John Doerr, Jeff Immelt, and other titans of American industry. The report refutes the notion that deficits require paring back our investments in science and technology, and explicitly calls for increased federal funding for energy innovation as well as the creation of new public-private partnerships to bring clean energy technologies to commercial scale.
Mitt Romney's new economic plan, released yesterday, places him in the company of a growing club of conservative innovation hawks who support public investment in energy technology and an innovation agenda.
In an effort to distinguish themselves from the pack, and in anticipation of tonight's debate, the various Republican presidential candidates are stepping forward with their own well-tailored plans to spur economic recovery and "renew American greatness." In the process, Mitt Romney stands out in favor of federal investment in innovation, particularly in the clean tech sector, joining a growing cadre of influential conservative "innovation hawks" who advocate sensible and bipartisan policies for growing the economy.
Mitt Romney, former Massachusetts governor and leading Republican candidate for president, released his economic plan yesterday. The hefty report, "Believe in America," (PDF) comes in at 160 pages and describes Romney's 59-point plan to "revitalize our economy and to reignite the job-creating engine of the United States." One of his seven central areas of focus is energy, and his proposed policies go beyond the boilerplate "drill, baby, drill" and "cap-and-tax" GOP rhetoric. Indeed, Romney's energy plan adopts an encouraging agenda centered around innovation, R&D, and limited direct public investment.
The following was written by Matthew Stepp, Clean Energy Policy Analyst at the Information Technology and Innovation Foundation, and is cross-posted from the Innovation Policy Blog.
There's no telling what the future of new U.S. clean energy policy holds. Congress and the White House are stalled in legislative gridlock over the debt ceiling. And clean energy programs are taking a beating in 2012 budget negotiations. But even so, some legislators are taking it upon themselves to offer cohesive clean energy innovation initiatives that are an excellent framework for future energy policy debates. Case in point, Senator Debbie Stabenow (D - MI) proposed the Battery Innovation Act of 2011(BIA) - a comprehensive advanced electric vehicle battery initiative.
As it stands, affordable, energy dense batteries that can travel long distances on a single charge are a key barrier to widespread electric vehicle adoption. And as I've discussed in an earlier post, the current advanced battery technology strategy at DOE is more disparate than coordinated. So BIA is a welcomed and excellent first step in addressing this weakness in U.S. energy policy.
BIA addresses the full range of advanced vehicle battery technology development. The most significant standout in the proposal is its focus on addressing the numerous stages of technology development. BIA supports battery innovation from basic research through manufacturing as well as attends to the growing need for rare, but critical materials in battery production. For instance it orders the Department of Interior to conduct a much needed analysis of the raw materials used in vehicle batteries with special attention on U.S. supply and reliance on those materials. The reliance on rare materials, such as cerium and yttrium, in current electric vehicle battery designs puts the United States at a significant disadvantage. China currently produces 97 percent of the these materials, meaning that without significant domestic supply or the innovation of viable substitute materials we could be trading in our reliance for foreign oil in exchange for a reliance on foreign rare materials. This study would be in line and complementary to DOE's critical materials strategy released late last year.
A pragmatic strategy to restart stalled global climate efforts through the pursuit of energy innovation, climate resilience, and no regrets pollution reduction (Report Overview)
Climate Pragmatism, a new policy report released July 26th by the Hartwell group, details an innovative strategy to restart global climate efforts after the collapse of the United Nations Framework Convention on Climate Change (UNFCCC) process. This pragmatic strategy centers on efforts to accelerate energy innovation, build resilience to extreme weather, and pursue no regrets pollution reduction measures -- three efforts that each have their own diverse justifications independent of their benefits for climate mitigation and adaptation. As such, Climate Pragmatism offers a framework for renewed American leadership on climate change that's effectiveness, paradoxically, does not depend on any agreement about climate science or the risks posed by uncontrolled greenhouse gases.
The new report brings the Hartwell framework into an American perspective, and it is authored by a broad group of 14 international scholars and analysts representing a diverse range of political and ideological positions -- from the conservative American Enterprise Institute to moderate Democratic think tank Third Way and the liberal Breakthrough Institute.
Climate Pragmatism is the third paper released by the Hartwell group, an informal international network of scholars and analysts dedicated to innovative strategies that uplift human dignity through mitigation of climate risk, enhancement of disaster resilience, improvement of public health, and the provision of universal energy access. Previous publications include The Hartwell Paper (May 2010) and How to Get Climate Policy Back on Course (July 2009).
Climate Pragmatism also builds on the limited and direct energy technology innovation strategy outlined by the Breakthrough Institute along with scholars at the American Enterprise Institute and Brookings Institution in the October 2010 policy report, Post-Partisan Power.
As the report's authors explain:
The old climate framework failed because it would have imposed substantial costs associated with climate mitigation policies on developed nations today in exchange for climate benefits far off in the future -- benefits whose attributes, magnitude, timing, and distribution are not knowable with certainty. Since they risked slowing economic growth in many emerging economies, efforts to extend the Kyoto-style UNFCCC framework to developing nations predictably deadlocked as well.
The new framework now emerging will succeed to the degree to which it prioritizes agreements that promise near-term economic, geopolitical, and environmental benefits to political economies around the world, while simultaneously reducing climate forcings, developing clean and affordable energy technologies, and improving societal resilience to climate impacts. This new approach recognizes that continually deadlocked international negotiations and failed domestic policy proposals bring no climate benefit at all. It accepts that only sustained effort to build momentum through politically feasible forms of action will lead to accelerated decarbonization.
Twenty-three years ago, Ronald Reagan addressed the nation to defend federal investments in research and development, even amidst dire budgetary constraints, prefacing the innovation hawks of today. The following is excerpted from Reagan's 1988 national address:
Federal funding for science is in jeopardy because of budget constraints. That's why it's my duty as President to draw its importance to your attention and that of Congress.
...The remarkable thing is that although basic research does not begin with a particular practical goal, when you look at the results over the years, it ends up being one of the most practical things government does... Major industries, including television, communications, and computer industries, couldn't be where they are today without developments that began with this basic research.
...one thing is certain: If we don't explore, others will, and we'll fall behind. This is why I've urged Congress to devote more money to research. After taking out inflation, today's government research expenditures are 58 percent greater than the expenditures of a decade ago. It is an indispensable investment in America's future.
...Some say that we can't afford it, that we're too strapped for cash. Well, leadership means making hard choices, even in an election year. We've put our research budget under a microscope and looked for quality and cost effectiveness. We've put together the best program for the taxpayers' dollars. After all, the American tradition of hope is one we can't afford to forget.
It's not often that we agree with Ronal Reagan's policy prescriptions. But even Reagan recognized the difference between productive government investment and government spending, and called for increased investments in science and innovation even at a time of tight fiscal concerns. Reagan's speech stands in stark contrast to the ideology of modern-day Congressional Republicans, who continue to push cuts to critical federal investments in energy innovation, wholly disregarding the critical role that federal investments in innovation have played in driving the nation's economic growth.
The 2012 Energy and Water Appropriations bill, passed on Friday by the House of Representatives, would cut federal energy innovation funding by 12 percent of the levels put in place by the FY11 Continuing Resolution, 37 percent below the White House's FY12 budget request. The bill would cut the Department of Energy (DOE)'s budget by $2.5 billion over FY2010 funding levels.
Overall, the House's plan would cut about $644 million from the combined budgets of the five major DOE offices engaged in energy innovation activities (see Figure 1 and Table 1 below). However, these new cuts are relative to FY11 budget levels, already diminished by spending reductions included in a Continuing Resolution passed by Congress in April to fund the government through the end of the year. All told, the 2012 Appropriations bill would see funding levels for the five core DOE energy innovation agencies tumble $1.4 billion below FY10 levels and a precipitous $3 billion below President Obama's budget request for FY12.
Figure 1, below, and accompanying Table 1, present the House budget in comparison to the funding levels for these offices in FY10, FY11, and previous Administration budget requests.
For exact figures, see Table 1 at the end of this post.
A new report provides detailed evidence that the clean economy is here. Keeping it here will require a national and regional policy framework for driving innovation.
This morning the Brookings Institution's Metropolitan Policy Program released a comprehensive new report, "Sizing the Clean Economy," which takes a detailed look at the United States' ongoing transformation toward a low-carbon future. The report, co-produced with Battelle Technology Partnership, presents the most detailed data available on jobs and establishments in the clean economy, and finds that the clean economy accounts for 2.7 million jobs, more than both the biosciences and fossil fuel sectors, and a little over half the size of the IT sector. (Also check out the new interactive map that accompanies the report)
However, "clean energy" jobs account for only a fraction of the 2.7 million clean economy jobs calculated by Brookings/Battelle. Indeed, the majority of jobs are in more traditional "environmental" sectors like waste management and treatment, mass transit, and conservation. The jobs we usually think of as clean energy jobs--those in renewables, nuclear, smart grid, fuel cells, batteries, energy efficiency and electric vehicle technology--account for just 20 percent of this 2.7 million. While the rest of the clean economy has generally lagged the overall economy in terms of job growth, these newer clean energy industries have experienced explosive job growth, albeit from small bases.
The clean tech sector is headed for a major crash, as the subsidies required to make clean energy artificially cheaper are becoming unsustainable. Avoiding future crashes will require reorienting our energy policies to drive innovation, rather than simply deploying existing technologies that can't compete without subsidy.
The global clean energy industry is set for a major crash. The reason is simple. Clean energy is still much more expensive and less reliable than coal or gas, and in an era of heightened budget austerity the subsidies required to make clean energy artificially cheaper are becoming unsustainable.
Clean tech crashes are nothing new. The U.S. wind energy industry has collapsed three times before, first in the mid 1990s and most recently in 2002 and 2004 when Congress failed to extend the tax credit that made it profitable. But the impact and magnitude of the coming clean tech crash will far outstrip those of past years.
Two recent articles show that an innovation and investment-centered paradigm for addressing climate change is advancing in other countries around the world.
After 20 years of dominance, the pollution paradigm--the idea that we could solve climate change similar to the way we've addressed conventional pollution problems--irretrievably failed in 2010. At the end of 2009, the collapse in Copenhagen spelled the end of efforts to enact legally binding emissions caps at the international level. In the United States, cap and trade failed for the fourth time in ten years and is politically dead for decades.
Carbon pricing and emissions trading schemes are also in retreat in other nations around the world, including Canada and Australia. Recognizing both the political difficulties associated with carbon pricing and its failure to reduce emissions where it has been tried, more scholars and opinionmakers in other countries are advancing an innovation and investment-centered climate agenda developed over the years by the Breakthrough Institute and its allies.
Last week, Vice President Joe Biden vowed that the country will lead the global clean energy revolution by harnessing its citizens' entrepreneurial spirit and innovative capacity. Speaking at the National Renewable Energy Laboratory (NREL), Biden emphasized the vital role public-private partnerships have historically played in unleashing transformative innovations, and the critical nature of this collaboration in sparking breakthrough clean energy technologies.
Biden's speech, excerpted below, can be watched in full here.
Now, more than ever, America's future competitiveness depends on our ability to innovate and our capacity to live up to our rich history of technological advancement. This kind of public-private partnership fosters extraordinary innovation, allows brilliant ideas to develop, and gives businesses the tools they need to bring technology to the market.
What we've realized is sometimes it takes a national investment and a national vision to spark private sector investment. The government never does it. But the government can spark it on occasion. And over and over it again it has been that American model of innovation that has allowed us to lead the world in technological advances over the last 150 years. It's part of our nation's DNA. It's embedded in our nation's history.
Whether it was government collaborating with private industry to make rifles that had interchangeable parts during the revolutionary war, or Congress helping Samuel Morris build a transmission facility, the line that he could not afford to build, to demonstrate that his invention worked, proving it would go over long distances and turning it into what ended up being the telecommunications industry we know today. Or President Lincoln paying any private railroad who'd lay 40 miles of track on the transcontinental railroad in $16,000 in government treasury bonds which they would not have done otherwise to carry commerce across America and having now a $380 billion rail industry in America.
Or President Eisenhower investing in what he called beyond the horizon ideas at ARPA in the late 50s creating the internet and so much more. That's America's story. That's the history of the journey of the country.
Drum draws our attention to some "eye popping" figures for price elasticity of demand for oil from the IMF. According to Drum, these elasticities mean that, in the short term, a 50 percent increase in price leads to a 1.2 percent decrease in consumption. In the long term, it leads to a 4.7 percent decrease.
Conservative blogger Jim Manzi rightly points out that, with elasticities as low as these, a gas tax at any politically realistic level is not going to reduce our dependence on fossil fuels.
Specifically, to the extent that we continue to progress in making non-fossil-fuels technology cheaper and more effective for an ever wider array of applications, we can accelerate the ongoing de-carbonization of our economy. The idea of economists to use artificial scarcity pricing to do this is aggressively marketed in blogs, magazines and TV shows, but is extremely unlikely to work, because the current price elasticity of oil is so low. The work of engineers and physical scientists, however, is likely to be determinative.
Newt Gingrich has joined a growing group of innovation hawks in recognizing the importance of federal innovation investments in driving U.S. economic growth. Speaking at a Brookings Institution conference, the former Speaker of the House argued against making across-the-board cuts to government spending and acknowledged that we need to preserve key federal investments in science and technology research.
'One of them [the Republicans' ideas for addressing the deficit] is cutting investment in science and research,' Mr. Gingrich told a Brookings Institution conference. 'It's essentially like saying I want to save money on your car [so] we're not going to change the oil. And for about a year I can get away with it, then the engine will freeze, and we have to change the engine.'
In short, Mr. Gingrich argued: All government spending is not created equal. All government spending is not evil. And Washington's approach to budgets is imprudently starving the future.
In advocating for critical federal investments in innovation, Gingrich echoes the innovation-centered federal strategy outlined by President Obama is his State of the Union speech earlier this year.
Gingrich is strongly critical of the parts of his party's recently released 2012 budget proposal that would strip critical funding for innovation across the federal government.
It's not too late for President Obama to return to the clear path to "winning the future" articulated in his State of the Union. But righting the nation's economic trajectory demands a concerted and consistent effort to help Americans understand and embrace the difference between spending and investment, and to recognize that a growing economy fueled by new innovations, new technologies, and new industries is an essential component of any strategy to tame the debt.
"The first step in winning the future is encouraging American innovation. ... We'll invest in biomedical research, information technology, and especially clean energy technology, an investment that will strengthen our security, protect our planet, and create countless new jobs for our people."
With those remarks at the heart of his State of the Union address - and a 2012 Budget proposal to back them up - President Obama drew a line in the sand and articulated a vision of American economic renewal fueled by key investments in the kind of public-private partnership that brought us the railroads and jet aviation, microchips and the Internet, countless biomedical breakthroughs and a portfolio of clean energy alternatives.
As we wrote in January, "Obama's [State of the Union address] was a rejection of proposals to cut federal spending across the board, as he finally made the case before the American people about why public support for innovation is critical for the country's long-term prosperity."
It was a plan to "win the future" and restore American prosperity that embraced the crucial distinction between government spending - consumptive, transitory, and sometimes even wasteful - and public investment - that small portion of our federal budget that catalyzes the enduring innovation, entrepreneurship, and economic growth that makes this nation strong. We hailed the speech as "Obama's breakthrough" moment.
But that was January...
Today, we're veering closer to a very different vision of America's budgetary future, one that seems to embrace the logic of "across-the-board" spending cuts proffered by Republicans, including decreasing budgets for major national research agencies and clean energy innovation programs.
Budget Deal Cuts Investment in Innovation
Late on April 8th, President Obama's negotiators gave his imprimatur to a compromise to fund the government through the remainder of the 2011 fiscal year that would see federal investments in energy innovation fall by nearly 11% (or $325 million) below 2010 levels while stripping over $1 billion from the budgets of the nation's major non-defense research agencies.
These cuts amount to a veritable funding cliff, when one considers the nearly simultaneous expiration of the temporary investments flowing to innovation agencies in 2009 and 2010 under the American Recovery and Reinvestment Act.
If this is the opening battle in the war to win America's future, it is a clear defeat.
Two more influential voices have joined the growing ranks of innovation hawks on both sides of the political spectrum in urging against cuts in federal investment in science and technology. Noted political commentator Mort Kondrake writes that the GOP budget would "torch America's seed corn," while Duke Energy CEO Jim Rogers writes that Congress should increase funding for energy research to make clean energy cheap.
As the Congressional Republicans continue to push cuts to critical federal investments in innovation, two more prominent voices have joined a growing group of innovation hawks on both sides of the aisle seeking to preserve or even increase federal funding for science and technology.
The first is noted political commentator Mort Kondrake, who wrote recently in Roll Call that the GOP is threatening to "torch America's seed corn" by cutting federal technology investment. Kondrake, a long-time contributor to Fox News and Executive Editor of Roll Call, notes that the Republicans' budget bill would cut funding for scientific research agencies by more than 33 percent, at a time when countless science and technology experts argue that we must increase such investments to spur economic growth. As Kondrake notes, the GOP budget proposal would abandon the long, bipartisan history of federal investment in American innovation:
Republican priorities represent not just a repudiation of President Barack Obama's proposed increases for science -- 10 percent for energy, 13 percent for the NSF, 15 percent for NIST -- but of a bipartisan process started in 2005 to secure a doubling of hard science research.
China is on a roaring path towards single-handedly swamping any hopes of climate stability. The nation's current climate pledges appear lackadaisical rather than ambitious and just as likely to trigger significant rebounds in energy use than real CO2 reductions. The only way to avert potential climate catastrophe is to de-link economic growth from carbon emissions by fueling China -- and the world -- with clean, affordable, and massively scalable energy technologies. Our current menu of technological options is dangerously short, and there's no time to waste: we must make clean energy cheap, and fast.
I've said it before and I'll say it again: when it comes to the global climate challenge, as goes China, so goes the world.
Driving that aphorism home, co2scorecard.org, a not-for-profit project that closely tracks global greenhouse gas emissions, now reports that China's CO2 emissions increased by 906 million tons in 2009 -- the second largest annual increase for any country in recorded history. China's soaring emissions were enough to completely offset the drop in emissions wrought by the economic havoc plaguing much of the Western world (see graphic below).
China's unprecedented surge in CO2
As Goes China, So Goes the World: Soaring CO2 emissions from energy use in China drive global greenhouse gas trends (click image to enlarge; source: co2scorecard.org)
Over the last decade, China's annual emissions of climate destabilizing CO2 jumped by 5 billion tons per year. According to Shakeb Afsah, President and CEO of co2scorecard.org, that's "the highest [increase in annual CO2 output] for a single country in recorded history, representing an average annual emissions increase of almost 12%--more than four times the rate observed [for China] the previous decade."
To put this unprecedented 5 billion ton increase in annual CO2 emissions in context, Mr Afsah and colleague Kendyl Salcito note that during the 14-year long post-war boom period of 1959-1973, during which U.S. CO2 emissions rose each year, America's annual output of CO2 jumped by only 2 billion tons.
As Congress begins to debate whether the DOE deserves a funding increase to support innovation initiatives, a look at its record over the last two years will become a key point of contention. Organizations such as ARPA-E and the Energy Frontier Research Centers (EFRCs) will come under particular scrutiny with regard to their cost and effectiveness.
Programs of any nature, whether public or private, will always have a mixed record of successes and failures. It is equally inevitable that proponents and opponents of a given program will focus on certain elements of that program in order to make the strongest possible case for their position. This disagreement can be healthy when it helps policy makers to get a complete and revealing assessment of that program. Once each argument is made in full, a productive debate can begin and the most effective policy can be crafted. However, the increasing polarization between proponents and opponents of government financial support for innovation is, at times, preventing this healthy debate from occurring.
Last week, a group of Senate Democrat leaders unveiled their plan to build off of the innovation-centered budget proposal released by the President two weeks ago, including several important investments in energy innovation, advanced manufacturing, and infrastructure.
Senate Majority Leader Harry Reid introduced the proposal as an effort to simultaneously "create jobs, promote growth and help America win the future by making smart investments in education, innovation and infrastructure while cutting spending to live within our means."
The Senate Democrats' plan to judiciously invest in innovation and infrastructure while cutting wasteful spending elsewhere in the budget stands in sharp contrast to the Continuing Resolution bill passed by the House this weekend. The House bill budget would cut more than $60 billion from the federal budget to fund the government through FY2011, slashing several important energy innovation initiatives.
The House Republican's Continuing Resolution proposal to fund the government through the rest of Fiscal Year 2011 (FY11, ending Sept. 30) would slash energy innovation investments across federal agencies. The bill, H.R. 1, was introduced last Friday as the GOP's attempt to reduce the deficit and restore "fiscal responsibility," yet would nevertheless strip highly leveraged dollars from important federal programs, while representing merely a drop in the bucket of the $1.3 trillion federal deficit.
The Continuing Resolution as it stands would slice over two billion dollars from the DOE's budget alone and would have detrimental impacts on the state of American energy innovation. The budget cuts would force the layoffs of scientists and engineers, shrink the capabilities of laboratories and universities to perform the most critical cutting-edge energy research projects, and, by cutting funds for highly-leveraged loan guarantee programs, steer private sector funds away from American entrepreneurs and small businesses looking to demonstrate and deploy their innovative energy technologies on American soil.
The Continuing Resolution proposes cuts of at least 17% as compared to FY10 levels in each of the most innovation-oriented offices in the Department of Energy:
The agency which would be hardest hit would be the Advanced Research Projects Agency-Energy (ARPA-E), which funds both the riskiest and most transformative, early-stage energy innovation projects, and would lose a staggering 75% of its budget under H.R. 1.
The Office of Energy Efficiency and Renewable Energy (EERE), which was responsible for roughly 34% of the DOE's energy innovation investments in 2010, would lose 35% of its FY10 budget.
The Office of Science, which funds critical early-stage energy innovation research, would see a 20% decline in its budget. Office of Science devoted 20% of its 2010 budget to energy innovation funding, while supporting additional fundamental physical science research.
The Office of Nuclear Energy, which devoted 41% of its funds to energy innovation projects in 2010, would lose 23% of its budget.
Meanwhile, the Office of Fossil Energy would see an 11% reduction in its budget. 43% of the office's 2010 budget was devoted to energy innovation efforts.
Today's E&E News covered the release of the Breakthrough Institute's most recent report, "Energy Emergence: Rebound and Backfire as Emergent Phenomena", pointing to the report's conclusion that "increasing the efficiency of our power systems and gadgets will not necessarily yield great reductions in energy use and could lead to using even more juice". The article is excerpted below (subscription required).
In a new review of energy efficiency literature, researchers at the Oakland, Calif.-based think tank found that a "rebound effect" means that implementing low-cost efficiency improvements can increase overall energy consumption and can even lead to a higher net energy use in what they describe as a "backfire effect."
"The implications are serious for climate and energy policy," wrote Michael Shellenberger, the institute's president, in a description of the study. "Energy efficiency measures that pay for themselves are good for the economy but are not guaranteed to reduce energy consumption or emissions, and may in fact increase them."
The study's conclusion is not that policymakers should steer clear of efficiency improvements, which the institute's researchers say are good for economic growth, but that such improvements should not be counted on to reduce energy use or associated emissions.
The study points to several mechanisms that contribute to the rebound effect. More efficient use of energy leads to higher production, with that increased economic output tied to higher energy use overall. Efficiency also leads to the substitution of energy inputs for others like labor and capital with a resulting increase in energy use.
Over at FrumForum, Republicans for Environmental Protection's Jim Dipeso argues that while the GOP's budget plans aim to slash energy innovation spending across-the-board, there's a more productive way to address the fiscal deficit, specifically, the way outlined by the report "Post-Partisan Power", published by a coalition of scholars at the Breakthrough Institute, Brookings Institution, and American Enterprise Institute.
[The House Republican's] proposed budget resolution, setting spending levels for the remainder of fiscal year 2011, has knives out for energy science and technology research - for example, a 35 percent chop from 2010 levels for energy efficiency and renewables, and a 15% cut for nuclear R&D.
Yes, a fair argument could be made that all federal programs need to share the pain, but energy science and technology research doesn't amount to a teaspoon in a hurricane. All of the some $5 billion allocated to energy R&D each year could be zeroed out and the accountants at Treasury would hardly notice.
More importantly, energy R&D is long-range tech development that likely would not be picked up by private sector CFOs seeking more near-term returns for their risk capital. Once promising lines of inquiry are bunged up by federal budget politics, innovations that might have spawned new industries and smarter ways to use America's energy resources would fall by the wayside.
President Obama released his fiscal year 2012 budget proposal this morning, a solid endorsement of the necessity to increase public investment in energy innovation amidst proposals to indiscriminately cut discretionary spending across all federal programs. The President's budget proposal builds off of the innovation-centered economic growth strategy presented in the State of the Union Address last month and the White House Innovation Report released two weeks ago.
On the energy investment front, the budget proposal aims to increase the DOE's budget by 11.8 percent over FY2010's current appropriation levels, or $3.1 billion dollars, a comparatively small increase in an overall budget proposal of $3.7 trillion that proposes reducing the projected deficit by roughly $110 billion per year for the next ten years.
This budget increase is a vital step towards meeting the scale of the energy innovation challenge long-underlined by the Breakthrough Institute and by a general consensus of leading energy innovation experts, think tanks, and policymakers.
However, not all of these increases lie with funding for energy innovation. Using the Energy Innovation Tracker, a tool that compiles federal energy-innovation funding across nine federal agencies for the years 2009-2011, inclusive of ARRA, we've broken out investments in energy innovation (defined in the tracker as Basic Science, RD&D, and Education investments) from general energy investments in measures such as deployment, facility construction, and program management.
In a recent column, Innovation Conservative David Brooks calls out both Democrats and Republicans as perpetuating "mirages" for advocating cuts to discretionary spending as deficit reduction measures, and argues that those advocating for increased investments in productive areas need to band together to address entitlements, as growing entitlement spending will impose constraints on those investments in the future.
On Monday, I appeared on an hour-long webinar hosted by theEnergyCollective.com on China and Energy, diving into questions of energy innovation, competitiveness, and the challenge of meeting China's soaring demand.
Carolyn Bartholomew, a commissioner on the US-China Economic Security and Review Commission joined myself and moderator Marc Gunther to dive into the issues at stake.
We discussed how China can be both the world leader in clean and dirty energy, simultaneously leading the world in the production of clean energy technologies and global contributions to climate-destabilizing carbon dioxide and coal consumption; the economic stakes of the global clean energy race and China's rising prowess in clean tech innovation and production; and the huge scale of energy demand in the rapidly developing nation.
Listen to the audio - "China and Energy" webinar, 1/31/11: (length 01:01:10)
China will be the second largest global R&D investor in 2011 while U.S. investment in R&D will slow, according to a new survey by Battelle and R&D Magazine.
Growth in U.S. R&D investment will slow this year, while China is expected to eclipse Japan for second place among all nations in R&D investment, according to a new analysis released by Battelle and R&D Magazine.
The United States is still far and away the global leader in terms of total investment, and is expected to invest $405 billion in 2011. The Battelle team predicts that increases in U.S. R&D investment will slow to 2.4% in 2011, however, equal to the median global rate.
China has increased R&D investment by 10% each year for the last 10 years, sustaining this rapid growth rate through the global recession. Battelle estimates that China will invest $154 billion in R&D in 2011, passing Japan's $144 billion.
While the United States continues to lead in overall funding, in the last decade R&D has become increasingly globalized, as foreign governments boost their investment in R&D and innovation capacity, and multinational corporations have decentralized R&D activities across both advanced and emerging economies.
With last night's State of the Union address, President Obama has shifted the debate from the partisan climate wars to an expansive energy innovation policy which has the potential to draw support from across the political spectrum.
With last night's State of the Union address, President Obama has shifted the debate from the partisan climate wars to an expansive energy innovation policy which has the potential to draw support from across the political spectrum.
"In embracing breakthrough innovation for solar and nuclear power alike -- for economic competitiveness rather than climate reasons -- President Obama took a bold first step toward a national commitment to energy innovation that is in the long tradition of bi-partisan support for science and technology," wrote Breakthrough Institute co-founders Michael Shellenberger and Ted Nordhaus in a statement. "While the road forward will not be easy, at least it is one America has traveled before."
In a State of the Union speech framed centrally around restoring America's global economic leadership, President Obama argued forcefully for increasing federal investment in energy innovation, declaring that "breakthrough" technologies have driven decades of innovation that "created new industries and millions of new jobs."
Obama's speech was a rejection of proposals to cut federal spending across the board, as he finally made the case before the American people about why public support for innovation is critical for the country's long-term prosperity:
In tonight's State of the Union Speech, President Obama will call for increased federal investment in education, science, technology and infrastructure. In doing so, he will join a long list of Republican Presidents who recognized that such investments are key to America's economic vitality and a hallmark of true fiscal responsibility. The question now is whether today's Republican leaders will don this mantle, or will continue to recklessly pursue cuts to America's most productive public investments?
Tonight, President Obama is prepared to call for renewed federal investment in infrastructure, research, education, and clean energy technology in his State of the Union Address, according to his advisers. He is likely to argue that new productive investments in education and technology are central to generating jobs and laying a new foundation for economic prosperity. Indeed, the long, bipartisan history of American innovation is one of federal investment in new technologies--even in tough economic times.
But as Republicans in Congress continue their campaign to cut everything in sight (except for what might reduce the growing federal debt -- defense and entitlement spending), with seemingly little regard for the difference between spending and smart investment, it may be difficult for Obama to enact policies that could seriously address the deficit by growing the economy.
Update 1/31/11: If you missed Michael Shellenberger, Ted Nordhaus, and Steve Hayward at Duke last week, check out the video of their full lecture, "Hitting the Reset Button on Energy Policy," below:
Next week Breakthrough's Michael Shellenberger and Ted Nordhaus begin a university speaking tour focused on taking a look at energy policy beyond the climate wars. The duo will discuss "Post Partisan Power," an October 2010 report co-authored by think tanks on the left, right, and center, which calls for $25 billion in federal funding to accelerate energy innovation.
The first leg of the tour will take them to Duke and NYU, along with Steve Hayward of the American Enterprise Institute, a co-author of the "Post-Partisan Power" report. Later in February, Ted and Michael will extend their tour with an event at the University of Wisconsin-Madison.
On January 26, the two stop at Yale for a special retrospective on "The Long Death of Environmentalism." Michael and Ted last visited Yale in 2005 to defend their thesis that the modern environmental movement was incapable of effectively addressing the planet's most serious ecological challenge, global warming, and will return to discuss the evolution of the environmental movement and where we stand today.
Bucking the conventional D.C. wisdom of the day, Senator Kerry delivered a rousing speech Tuesday calling for a major bipartisan investment strategy for infrastructure, technology, research, and education to keep the United States competitive.
On Tuesday, Senator John Kerry (D-MA) delivered a major speech in Washington that may be remembered as one of the most important political responses to the Tucson shooting and as a powerful new post-partisan vision for restoring American vitality and leadership in the 21st century.
As Ezra Klein of Washington Post noted, "Frankly, it's the speech President Obama should be giving." In this moment of national reflection, the speech should be read by Americans of all political stripes and serve as a model for Democratic and Republican leaders alike.
In short, Senator Kerry argued that today's violent and divisive political dialogue -- which may or may not have contributed to the event in Tucson -- is damaging U.S. global leadership and preventing us from making the critical investments we need to stay prosperous and secure. Unless Democratic and Republican leaders can wake up and come together around a new agenda for strategic public investments -- including infrastructure, technology, research, and education -- we will not be able to maintain our place in the world.
Third Way's Josh Freed takes a look at what Republican budget cuts might mean for America's ability to compete in the burgeoning clean energy sector. It's not pretty.
Over at the Huffington Post, Josh Freed, the Director of Third Way's Clean Energy Program, takes a look at what the Republican plan to cut 20% of all non-defense discretionary funding might look like if spread equally across clean energy programs. It's not pretty:
-- A $1.6 billion cut in the federal loan guarantee program would potentially cripple the much-needed nuclear renaissance at a time when China is planning a five-fold expansion over the next decade. Without loan guarantees, it's unlikely we'd be building first nuclear power plant in the US in almost 30 years, and creating as many as 3,500 jobs, in Georgia today.
-- $60 million less for ARPA-E's already meager $300 million budget, gutting funding for advanced energy storage, next generation nuclear power and micro-battery technology that could also be used by the US military.
-- Eliminating almost $500 million in grants to companies innovating in renewable energy, advanced vehicle technology, and battery storage. This could kill emerging clean energy businesses that have the potential to become the 21st century's Google, General Electric or Exxon.
-- Slicing $20 million from R&D investments to schools like Purdue University, Penn State, University of Wisconsin, and Iowa State University, which are developing the next generation of innovators and ideas that could spawn new businesses and jobs across the U.S.
As Freed notes, even well known and well respected conservative commentators like George Will are warning Congressional Republicans to exchange their budget hatchets for scalpels and preserve or even strengthen key science and technology investments.
Clean energy is certainly one of the global growth sectors that could help lead an industrial revival in the United States. But Republican budget cutting mania could hamper U.S. competitiveness in the sector even as other nations like China, Japan, and South Korea increase their investments. Will Innovation Conservatives be able to forestall such an outcome?
Nobel Laureate physicist Dr. Burton Richter discusses the three dimensions of the global energy challenge - economy, security, and environment - in his keynote at the "Energy Innovation 2010" conference in December.
"Energy Innovation 2010" keynote presentation delivered by Nobel laureate physicist Dr. Burton Richter on December 15, 2010.
(Richter's Keynote begins at 5:56 in the video below)
I have been asked by the organizers to be provocative at this discussion of energy innovation - the more provocative the better, I was told. So far, the talks have focused on the need for innovation to get the technologies of the future developed and deployed so that the issue of climate change can be effectively addressed. We all know that the country is not getting the action on the Federal front that the issue warrants, and thinking about how we might do better leads me to three questions.
1. Have we focused so exclusively on climate change as a justification for action on energy that we have excluded potential allies?
2. Have we emphasized ultra-green technologies that are not yet ready for the big time, and so had our desire for the perfect drive out the available good?
3. Have we pushed policies that are so narrowly targeted as to prevent much larger and less costly emissions reductions to be made in the nearer term than have been made with the renewables?
On December 15th 2010, hundreds of leading thinkers, scientists, public officials, and innovators gathered in Washington, DC for the Energy Innovation 2010 Conference to initiate a new conversation on a new energy policy paradigm for the 21st century
For 35 years, government and the market have been trying and failing to get energy policy right. Congress has failed to pass large-scale clean energy and climate legislation, while China and other competitors are moving aggressively to take the lead in new energy technology. And the market has failed to create needed low-carbon technology on its own. Meanwhile, the nation's dependence on oil and coal deepens and global temperatures continue to rise. To address these issues, we need to get past the old energy policy paradigm - and we just may be turning the corner.
On December 15th 2010, hundreds of leading thinkers, scientists, public officials, and innovators gathered in Washington, DC for the Energy Innovation 2010 Conference to initiate a new conversation on a new energy policy paradigm: one that recognizes the central role of innovation in resolving the world's looming energy challenges and boosting American competitiveness. Climate change aside, we can't rely on carbon-based fuels for the next 150 years the way we did for the last 150. And we can't create the transformational energy innovations we need without putting innovation front and center.
"Energy Innovation 2010" merely begins a new national energy dialog that must continue well into the coming years. Breakthrough Institute and our partners will continue to spearhead this conversation as we seek new strategies to address the multifaceted energy challenges facing America and the world.
In case you missed the conference, held before a packed house at the National Press Club, or if you simply want to revisit the top notch presentations delivered throughout the packed day, videos from the full conference can be viewed below.
From hybrid crops to blockbuster drugs, nuclear power to wind power, and microchips to the Internet, government support was critical to the productive public-private partnerships that spawned so many revolutionary American technologies.
This presentation was delivered by Jesse Jenkins (Director of Energy and Climate Policy, Breakthrough Institute) and Daniel Sarewitz (Director, Center for Science, Policy, and Outcomes, ASU; Breakthrough Institute Senior Fellow) at the Energy Innovation 2010 Conference, December 15th, 2010.
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Apple, Amgen and General Electric. Bill Gates, Thomas Edison, and Alexander Graham Bell.
We are all familiar with these genius inventors and titans of industry.
Yet most of us remain unaware of the almost constant presence of a silent partner in American innovation: the federal government.
We might recall something about microchips and the space race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of government support for technology innovation.
As we gather today to consider how to drive forward the dramatic innovation needed to deliver cheap, clean and massively scalable energy sources to power world, we would do well to pause and take a look back at the United State's long history of limited but energetic public investment in breakthrough technologies.
Where do good technologies come from? The history of American innovation shows that an active partnership between the public and private sectors has been key to developing breakthrough technologies, which have driven generations of economic prosperity. In an updated report, the Breakthrough Institute explores this partnership through a set of case studies in American innovation.
Driving directions from your iPhone. The cancer treatments that save countless lives. The seed hybrids that have slashed global hunger. A Skype conversation while flying on a Virgin Airlines jet across the continent in just five hours.
Where did these everyday miracles come from?
As soon as the question is asked we know to suspect that the answer is not as simple as Apple, Amgen, or General Electric. We might recall something about microchips and the Space Race, or know that the National Institutes of Health funds research into new drugs and treatments.
But most of us remain unaware of the depth and breadth of American government support for technology and innovation. Our gratitude at being able to video chat with our children from halfway around the world (if we feel gratitude at all) is directed at Apple, not the Defense Department. When our mother's Neupogen works to fight her cancer, we thank Amgen, not NIH or NSF.
By Rob Atkinson, Ted Nordhaus, and Michael Shellenberger
For forty years, presidents and policymakers have promised and planned for a new energy future just over the horizon. While the rationales have varied - reducing dependence on imported oil, stopping global warming, reducing air pollution, creating clean energy jobs - the song has largely remained the same: America has most, if not all, of the technologies needed today to make a quick and relatively painless transition away from fossil fuels.
Yet America is more dependent upon fossil fuels than ever before. U.S. oil consumption rose from 15 to 20 million barrels a day between 1970 and today, while coal still provides about 50 percent of our electricity. U.S. carbon emissions continue to rise unabated, as efforts to cap them have repeatedly foundered in the face of daunting political, economic, and technological obstacles. And renewable technologies like wind and solar only meet a tiny fraction of America's energy needs despite several decades of efforts to subsidize their deployment.
When experts convene in Washington next week to discuss energy policy at the Energy Innovation 2010 conference, they will do so in the wake of yet another failed federal effort to pass legislation to support a transition away from fossil fuel-based energy.
Breakthrough Institute and other leading think tanks sponsor day-long conference rethinking energy innovation in the United States: getting to scale, making clean energy cheap, securing American leadership.
After
two years of often-tumultuous debate in Congress, the national debate
over energy and climate change policy has now been altered: cap and
trade policy efforts have run aground in Congress, perhaps fatally, and
Republicans are ascendant, reshaping the national political landscape.
Meanwhile, with economic recovery the top priority for the public and
policymakers alike, America's clean tech competitors are surging ahead,
raising the stakes for energy policy.
Against this backdrop,
support is growing on both right and left for new national investments
in energy innovation that can help address some of the most urgent
imperatives of our time - renewing the economy, improving energy
security and public health, and overcoming key environmental challenges.
A growing chorus of voices thus counsels a renewed national commitment to develop breakthrough energy technologies - and to the reform of America's energy innovation system itself.
In
recent months, energy experts have advised policymakers to: take a page
from the nation's long history of successful military research and
procurement; build on the success of agricultural research stations and
the National Institutes of Health by establishing new innovation
institutes and clusters nationwide; promote the right mix of both
competition and collaboration to spur innovation and productive
knowledge spillover; reform energy subsidies to reward innovation; and
restructure business taxes to promote investment in the building blocks
of an innovation economy.
On December 15th, a group of America's leading policy think tanks will host a day-long conference in Washington D.C. to rethink energy innovation.
Energy Innovation 2010,
held at the National Press Club, will bring together leading experts
from government, think tanks, academia, and business to ask hard
questions about how energy innovation efforts can be brought to scale,
how the innovation system must be restructured and reformed, and how to
renew the kind of active partnerships between the public and private
sectors that were responsible for so much of America's prior
technological innovation and economic strength.
Breakthrough Institute is proud to organize and sponsor this free, day-long conference, along with the Information Technology and Innovation Foundation and with sponsoring partners the American Enterprise Institute, Third Way, Clean Air Task
Force, Consortium for Science, Policy and Outcomes, Securing
America's Future Energy, and the Brookings Institution. We are pleased to
welcome TheEnergyCollective.com and Yale Environment 360 as media sponsors for the event.
Facing renewed international challenges to American technological and economic leadership, the United States "cannot cut back on those investments that have the biggest impact on our economic growth," including science, technology and education, President Obama declared at a speech in Winston-Salem, North Carolina this week.
Echoing his Secretary of Energy and chief science and technology advisers (as well as a pairof familiar op eds from 2008), President Obama told audiences in North Carolina today that the United States faces a new "Sputnik moment" - a challenge to American technology and economic leadership akin to the global race to dominate nascent aerospace, computing, and information technology fields during the Cold War Era.
The United States responded to the 1957 launch of the Soviet Sputnik satellite with a series of major investments in science and education, including the National Defense Education Act and the creation of the Apollo Space Program. Maintaining economic competitiveness in the 21st century similarly demands a renewed national commitment to invest in the building blocks of a dynamic innovation economy, the President said.
Research and innovation on energy storage and transmission technology must proceed in parallel as the nation ramps up use of renewable energy, according to a new report from the American Physical Society.
New innovations in energy storage, transmission, and the integration of variable electricity sources are necessary to enable renewable energy sources to contribute significantly to the U.S. energy supply, according to a new report from the American Physical Society.
Establishing national policies to spur the deployment and adoption of renewable electricity sources, such as wind and solar power, are important, but the scientists warn that research and innovation must also proceed in parallel on better energy storage technologies, new strategies for integrating the varying and intermittent output of these energy sources, and improved technologies for the long-distance transmission of renewable electricity.
A new report by Third Way and an op-ed by three U.S. Senators add to the gathering consensus for a technology and innovation-led strategy for clean energy progress and economic renewal.
America can recapture the lead in the global clean energy race if it commits itself to a major public-private effort to spur clean energy innovation.
That's the message of a new report released today by Democratic think tank Third Way. The report, "Creating a Clean Energy Century," is the first in a series of reports from Third Way's new project on energy innovation, co-chaired by U.S. Senators Mark Udall (D-CO), Kay Hagan (D-N.C.), and Debbie Stabenow (D-MI).
The report begins with clear-cut premises. Clean energy is still too expensive and unreliable relative to fossil fuels. Other countries are moving toward clean energy more quickly than the United States. Countries that are able to make clean energy cheaper than fossil fuels will gain the greatest economic benefits, by capturing more of the rapidly growing domestic and global markets for clean energy.
Over at theEnergyCollective.com, Tyler Hamilton dives into the International Energy Agency's newly released forecast of global energy trends (exec sum here [pdf]) focusing on the disparity in global subsidies for renewables and fossil fuels:
The International Energy Agency put out its annual World Energy Outlook today and urges strong and sustained government support for the deployment of renewable energy. The agency pegs 2009 subsidies for renewables at $57 billion and calls for that to increase to $205 billion by 2035. "The share of modern renewable energy sources, including sustainable hydro, wind, solar, geothermal, modern biomass and marine energy, in global primary energy use triples between 2008 and 2035 and their combined share of total primary energy demand increases from 7 per cent to 14 per cent," according to the agency. Fossil fuel subsidies stood at $312 billion in 2009 and the agency urged that they be eliminated to accelerate the transition to renewables.
I applaud the IEA's call for major public investments in clean energy RD&D and deployment and certainly support the agency's calls to phase out fossil fuel subsidies -- excepting where doing so would expand the already deplorable share of the global population (about 2.4 billion) locked in energy poverty.
But while Hamilton and others focus on the disparity between total subsidies for fossil energy and renewables, the IEA figures are actually a stark reminder of the major price gap that persists between mature fossil energy sources and newer, costlier clean energy alternatives.
Neal Lane, of Rice University former science advisor to President Bill Clinton, showed the slide above in a recent talk at the University of Colorado (which he provided to me today, Thanks Neal!). It shows a number of technologies somehow connected to federal innovation investments and their relationship to the iPod, discussed in an earlier post today.
Apple has long boasted of its culture of innovation, and how this led to such products as the original Mac and the iPod. However, it turns out that, at least in the case of the iPod, Apple had a hidden ally: the US government. During a speech at Tuskegee University, President (and iPod user) George W. Bush told his audience, "the government funded research in microdrive storage, electrochemistry and signal compression. They did so for one reason: It turned out that those were the key ingredients for the development of the iPod." While we have to gratefully acknowledge the efforts of government agencies such as DARPA in some of the fields mentioned by the President, we also feel obligated to point out the accomplishments of private companies in the US and abroad, including IBM, Hitachi and Toshiba -- not to mention the Fraunhofer Institute, which developed the original MP3 codec, and codeveloped (with Sony, AT&T and others) the AAC format used by Apple in the iPod.
In a recent interview with NPR's Robert Siegel, Breakthrough Senior Fellow Roger Pielke Jr. discusses why cap and trade policy collapsed under the weight of its political and practical limitations. He proposes a new path forward focused on making clean energy cheap, instead of continually trying to make fossils fuels more expensive.
Below is an excerpt from the interview transcript. Click here to listen to the full interview and read the entire transcript:
The United States and Australia have inked a new partnership to pursue joint solar energy research designed to make solar energy cheap enough to compete with fossil fuels.
Prime Minister Julia Gillard and US Secretary of State Hillary Clinton made the announcement in Melbourne on Sunday, with the Australian government set to commit up to $50 million towards the program.
Ms Gillard said the aim was to make solar power as cheap as conventional energy sources.
"One of the greatest barriers to a broader commercial take up of solar power is its cost and that is specifically what this joint research initiative will address," Ms Gillard told reporters.
"The joint project with the United States is part of an aggressive effort to bring the sales price of solar technology down by two to four times."
Ms Clinton said the program aimed to make solar power competitive with conventional energy sources by 2015.
The price had dropped by 50 per cent in the past three years but there was more work to be done, she said.
"Under this initiative our two governments will share both the costs and the benefits of research and development which will speed up innovation," she said.
Secretary Clinton also pledged a $500,000 grant from the U.S. State Department to support a global survey to identify opportunities to reuse carbon dioxide emitted by power plant and industrial processes, headed up by the Global Carbon Capture and Storage Institute, a recently established research center co-funded by the Australian government.
Solar Powerhouse? Solar irradiation in Australia is among the highest in the world, as this color-coded map from NASA illustrates (darker red areas have the most incoming solar energy). Source: The Age/Reuters
Australia, with perhaps the greatest solar energy potential in the world, has an obvious interest in pursuing affordable, scalable solar power solutions, and has also maintained several long-standing solar research efforts. Can the two new partners accelerate efforts to make solar energy cheap?
In an effort to develop a truly effective post-cap and trade climate strategy, policy is not the only aspect that requires deep reflection - philanthropists, too, must reconsider the best way to channel grants in order to successfully fund solutions to climate and energy challenges. Breakthrough's Director of Climate and Energy Policy Jesse Jenkins recently spoke to a foundation about re-thinking philanthropic efforts in a post-cap and trade policy environment, offering insight into how policy makers, activists, and philanthropists, alike, must re-orient away from the focus on limits and toward an approach that harnesses human ingenuity to directly confront the scale of the global climate and energy challenge.
Breakthrough Institute Chairman Ted Nordhaus gives the keynote address at the World Climate Solutions conference at the Bella Center in Copenhagen, Denmark, the very building where international climate negotiations collapsed less than one year ago.
In late September, Breakthrough Institute Chairman Ted Nordhaus gave the keynote address at the World Climate Solutions conference--northern Europe's biggest annual clean tech event. The conference was held in Copenhagen, Denmark in the Bella Center, the very place where the international climate negotiations collapsed less than one year ago.
Nordhaus was introduced by Anders Eldrup, CEO of DONG energy. What follows is a video of the introduction and speech, as well as each speaker's full remarks.
Despite rising national debts, would national governments be wise to borrow today to fund investments in infrastructure, clean energy, and innovation to be enjoyed by -- and paid back by -- a richer, more well-off generation tomorrow?
Here's an interesting argument from our friends across the pond at the UK-focused Political Climate blog, making the case that despite rising deficit concerns and austerity measures in the UK and elsewhere, borrowing from the future may still actually be an appropriate way to pay for clean energy innovation today:
Against this background, it may sound mad to argue for more public borrowing in order to pay for investments in low carbon technologies and infrastructure, but that is what I am going to do in this post.
Let's start with the rationale. ... The starting point is that in advanced economies successive generations tend to get better off over time. For example, at the depths of the 1930s depression Keynes observed that despite the general gloom, he was confident that 100 years in the future, people might be eight times better off in real terms. And indeed average GDP per capita in the UK is now already about 5 times what it was in the 1930s. By extension, we would normally expect future generations to be better off than us in GDP terms.
... [Furthermore, if] we in this generation mitigate climate change, we will allow future generations to have a higher standard of living than they would have if we did nothing. We are very slowly beginning to do this, with policies being introduced to encourage us to invest less in conventional capital (e.g. fossil fuel power stations) and more in investments that effectively maintain natural capital (like renewable energy).
At the moment we are paying for these more expensive investments through reduced consumption, in the form of higher energy bills. If instead we were to borrow a certain amount of money from future generations (who will have to repay through their taxes) and use this money to pay the extra cost of renewables, carbon capture and storage and so on, then the theory says it should be possible to make both our generation and future generations better off. ...
Support for a technology-first approach to America's energy and climate needs is rapidly growing in the wake of the October 14 release of the "Post-Partisan Power" proposal by scholars at the Brookings Institution, AEI and Breakthrough Institute. Here is a sampling of the many reactions and widespread discussion generated by the report...
Joshua Green, Atlantic Monthly & Boston Globe: "Unlike most of what gets introduced just before an election, this was not a soon-to-be-forgotten political ploy, but a long-term project to accomplish what Congress and the president could not: put the country on the path to a clean energy future."
David Leonhardt, New York Times: [T]he death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Tim Mak, Frum Forum (a site started by former Bush speechwriter David Frum): "If Americans want to fight the challenges of climate change and reduce their dependence on foreign oil, this piece sets a good baseline for discussion."
Ezra Klein, Washington Post: "It's not that PPP is a sure thing, nor that it will pass Congress anytime soon. The Tea Party Republicans will need to sow their wild and crazy oats for awhile before they feel any need to tack to the center. But when they do, they aren't going to embrace cap and trade. They might, on the other hand, embrace a limited and direct approach to energy innovation."
Michael Levi, Council on Foreign Relations: [T]his idea may well make a lot of sense... most of the paper is actually a smart and thoughtful discussion of how to do energy innovation policy right".
Kirsten Powers, New York Post: " If America wants to remain the leader of the world economy, Washington has to attack this issue."
Bryan Walsh, TIME Magazine: "A truly bipartisan approach on energy and climate won't be easy--sometimes, especially right before an election, it seems completely impossible--but it's the only approach we can hope for, if we still hope."
Nature: "[G]iven the lack of consensus in other areas, long-term R&D intended to bring the cost of clean energy down might well be one area where lawmakers will be able to agree."
Case Western professor Jonathan Adler writes: "While not without flaws, the proposal represents a serious alternative to politically-moribund cap-and-trade proposals and the regulate-everything mindset that produced the Waxman-Markey bill."
Newsweek: "Cap-and-trade is on life support, but its weakness is giving other ideas room to breathe. Emerging proposals focus on investment in clean energy, pitched to the public with a narrative that omits a doomsday point of view about global warming and instead focuses on more practical considerations like job creation or the need to stop certain types of pollution."
All that convergence around a politically centrist, technology-first approach alarmed some climate warriors on left and right.
Climate skeptic Steven Milloy of Green Hell blog (and Junkscience.com) wrote: "The left isn't oscillating at all. They are focused on establishing a one-world socialist paradise. Whatever path gets the comrades there, they'll follow. Global warming has just been there most successful gambit to date."
Said Grist.org's David Roberts: "The Republican Party don't want to spend government money on clean energy, Hayward notwithstanding."
Joe Romm, ClimateProgress.org: [It] should also be obvious we're not going to get a massive federal clean energy program either."
Not all long-time climate warriors were sour on the proposal.
While EDF chief economist Nathaniel Keohane reiterates that "we need both cap and trade and sustained investment in clean energy R&D," he went on to tell the New York Times' David Leonhardt, "if it turns out that we can't get cap and trade in the near term, we need R&D investment all the more."
Harvard's Robert Stavins still insists "there is no other feasible approach that can provide meaningful emissions reductions" beyond cap and trade, but he acknowledges: "New path-breaking technologies will be needed to address climate change, and public support for private-sector or public-sector R&D will be crucial to meet this need."
MIT's Michael Greenstone, a long-time cap and trade supporter, isn't so sure about the real-world viability of the policy he once advocated. "The first best hope was getting a world price for carbon, and that now looks remote in the coming years," he told Leonhardt. "But there are ways in which the other options may be preferable to a price only in the U.S." Greenstone endorses the need for $25 billion in clean energy R&D investments and rightly explains, "All the action is really going to be occurring in developing countries" who will need clean and affordable energy to power their economic growth.
In a second post, Washington Post's Ezra Klein looks the realpolitik in the face as well and concludes: "The best of all worlds would've been a price on carbon married to a big investment in clean-energy research. But this is not the best of all worlds. This is our world. And this [technology-first proposal] ... might be our last, best chance to protect it."
Update The Washington Post editorial page endorses Post-Partisan Power's call for a bipartisan energy innovation strategy, noting: "Even if cap-and-trade had passed, the logic goes, the government would still have had to invest in scientific research to make green energy affordable; might as well make those investments, anyway ... incremental action is better than none."
When policies on emissions reductions collide with policies focused on economic growth, economic growth will win out every time. Climate policies should flow with the current of public opinion rather than against it, and efforts to sell the public on policies that will create short-term economic discomfort cannot succeed if that discomfort is perceived to be too great. Calls for asceticism and sacrifice are a nonstarter.
The "iron law" thus presents a boundary condition on policy design that is every bit as limiting as is the second law of thermodynamics, and it holds everywhere around the world, in rich and poor countries alike. It says that even if people are willing to bear some costs to reduce emissions (and experience shows that they are), they are willing to go only so far...
To succeed, any policies focused on decarbonizing economies will necessarily have to offer short-term benefits that are in some manner proportional to the short-term costs. In practice, this means that efforts to make dirty energy appreciably more expensive will face limited success.
...
The unavoidable reality is that policy makers and those they represent are committed to sustaining economic growth, bringing populations out of poverty, and expanding access to energy. Emissions reduction goals will not be achieved by policies that seek to stimulate innovation by constricting, much less by reducing, economic activity.
Yesterday, scholars from the American Enterprise Institute, the Brookings Institution, and the Breakthrough Institute released a joint report proposing a post-partisan way forward on climate and energy policy that moves beyond the framework of cap and trade. The report, "Post-Partisan Power," ignited a firestorm of discussion.
To answer some of major questions about the report, E&E News OnPoint TV host Monica Trauzzi invited Breakthrough Institute Director of Climate and Energy Policy Jesse Jenkins and Brookings' Senior Fellow and Director of Policy for the Metropolitan Policy Program to join her show.
Throughout American history, federal investments in areas like science and technology have been a long-term driver of national prosperity under presidents both Democrat and Republican.
Throughout American history, strategic government investments in areas like education, technology, infrastructure, and energy catalyzed the entrepreneurship and innovation that has paved the way for so many of the great American technological and economic successes of the 20th century. In the words of conservative New York Times columnist David Brooks, the American story is one of "limited but energetic governments that used aggressive federal power to promote growth."
The new report calls for increasing federal innovation investment from roughly $4 today to $25 billion annually, and using military procurement, new, disciplined deployment incentives, and public-private hubs to achieve both incremental improvements and breakthroughs in clean energy technologies. The authors point to America's long-history of bi-partisan support for innovation.
Writes David Leonhardt in today's New York Times, "the death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Mark Muro of Brookings tells Politico the proposal's four parts "are broadly popular, provide a very broad and appealing American vision of economic transformation and are certainly far more doable than a global pricing system at this point." Added Steve Hayward of American Enterprise Institute, "The entire climate and energy agenda that we've been talking about for several years now has hit a dead end, so it's time to hit the reset button."
The new report calls for increasing federal innovation investment from roughly $4 today to $25 billion annually, and using military procurement, new, disciplined deployment incentives, and public-private hubs to achieve both incremental improvements and breakthroughs in clean energy technologies. The authors point to America's long-history of bi-partisan support for innovation.
Writes David Leonhardt in today's New York Times, "the death of cap and trade doesn't have to mean the death of climate policy. The alternative revolves around much more, and much better organized, financing for clean energy research. It's an idea with a growing list of supporters, a list that even includes conservatives -- most of whom opposed cap and trade."
Mark Muro of Brookings tells Politico the proposal's four parts "are broadly popular, provide a very broad and appealing American vision of economic transformation and are certainly far more doable than a global pricing system at this point." Added Steve Hayward of American Enterprise Institute, "The entire climate and energy agenda that we've been talking about for several years now has hit a dead end, so it's time to hit the reset button."
As the Times's Leonhardt explains the new post-partisan proposal, and the growing energy innovation consensus surrounding it, "reflect[s] the political reality that raising the cost of dirty energy is unpopular, especially when the economy is so weak. Finding the money to make clean energy cheaper, even when government budgets are tight, will probably be an easier sell."
While cap and trade legislation became embattled by partisan wars over climate science and compromised to the point of inefficacy, Leonhardt reminds readers that there is a successor strategy waiting, if one only turns to the long, bipartisan history of American technological leadership.
"[H]istory shows that government-directed research can work," Leohardt writes.
"The Defense Department created the Internet, as part of a project to build a communications system safe from nuclear attack. The military helped make possible radar, microchips and modern aviation, too. The National Institutes of Health spawned the biotechnology industry. All those investments have turned into engines of job creation, even without any new tax on the technologies they replaced.
"We didn't tax typewriters to get the computer. We didn't tax telegraphs to get telephones," Breakthrough Institute's Michael Shellenberger told the Times. "When you look at the history of technological innovation, you find that state investment is everywhere."
And in that history, lies a new path forward to deliver clean cheap energy, economic productivity, and national prosperity.
By Steven F. Hayward, American Enterprise Institute; Mark Muro, Brookings Institution; Ted Nordhaus and Michael Shellenberger, Breakthrough Institute
If ever there were a time to hit the reset button on energy policy, it is today. Congress is set to adjourn without taking substantive, long-term action on either climate or energy. While conservatives may be celebrating the death of cap and trade, the truth is that the right's longstanding hopes for the expansion of nuclear power and oil production have also run aground, foundering on the high cost of constructing new nuclear plants and the impacts of the devastating oil spill in the Gulf of Mexico. As a result, energy policy is at a standstill, despite overwhelming public support for accelerating the move to clean, affordable energy sources and tapping fast-growing clean energy industries to create jobs and wealth in the United States.
At a time of continued economic distress, America should embrace regional innovation clusters as a new paradigm for collaboration, innovation, and economic prosperity.
As new reports confirm a stark decline in long-term U.S. economic competitiveness, the United States needs a new economic paradigm to refocus economic policy and rebuild its damaged economy. That new paradigm should focus on strengthening America's "regional innovation clusters," according to a new report authored by Mark Muro and Bruce Katz of the Brookings Institution Metropolitan Policy Program.
First defined by Harvard Business School professor Michael Porter twenty years ago, clusters--geographic concentrations of interconnected firms, suppliers, educational institutions and other supporting organizations--have staged a comeback in economic policymaking at different levels of government and are now widely viewed as important to accelerate innovation and therefore economic growth. According to the new study, The New Cluster Moment: How Regional Innovation Clusters Can Foster the Next Economy, clusters offer an attractive new economic paradigm for three particular reasons.
A new report by the National Academies paints a grim picture of U.S. economic competitiveness in the 21st century knowledge economy. Major and sustained public investments in education, research, and innovation are key to reversing a long-term decline in global competitiveness.
A new National Academies report released last week confirms what many concerned with U.S. economic competitiveness have warily suspected: America's competitive standing in the 21st century global economy has deteriorated markedly in the last five years.
The outlook has only worsened since the publication of the original report, according to the Gathering Storm committee, which includes leading academics, CEOs, and science and technology experts. For those concerned about America's ability to create lasting, high-paying, high-quality jobs in a time of economic distress, the report's conclusion is disheartening:
"America's competitive position in the world now faces even greater challenges, exacerbated by the economic turmoil of the last few years and by the rapid and persistent worldwide advanced of education, knowledge, innovation, investment, and industrial infrastructure. Indeed the governments of many other countries in Europe and Asia have themselves acknowledged and aggressively pursued many of the key recommendations of Rising Above the Gathering Storm, often more vigorously than has the U.S."
The failure of cap and trade and Kyoto has driven many on both the right and left toward a new consensus energy policy framework centered on making clean energy cheap. As a new energy innovation agenda is debated and refined in the coming months, true clean energy and climate progress may yet be realized.
On the right, Bjorn Lomborg, long a leading skeptic of efforts to address climate change, has wholeheartedly embraced a new clean energy innovation agenda, calling for massive global investments--on the order of $100 billion per year--in energy R&D. New York Times conservative commentator David Brooks has also acknowledged that the government should invest much more--around $25 billion per year--in research and development.
On the left, the Center for American Progress (CAP), the Democratic think tank whose spokespersons have in the past attacked Breakthrough's proposal to "Make Clean Energy Cheap," appears to be embracing just such a strategy -- at least rhetorically. According to a recent news report, Democratic lawyer Reed Hundt, former chairman of the Federal Communications Commission, is working with CAP and Al Gore's Alliance for Climate Protection on a new energy bill for the next Congress that focuses first and foremost on "lowering the cost of clean."
Hundt and CAP/Gore are also talking about measures to scale out the "breakthrough technologies" that the Department of Energy has funded.
In an effort to combat the hysterical, anti-government ideology that is taking root within the Republican Party, NYT commentator David Brooks reminds fellow conservatives that government has always partnered with the private sector to catalyze entrepreneurship and growth, and that such partnerships will once again be critical to secure the nation's economic future.
It is fashionable these days to paint the government as a useless yet ravenous institution, the expansion of which will turn America into a third world country - or, worse yet, France.
Even the Economist, a respected, moderate publication, has recently taken to framing the government as a hideous Leviathan consuming private business, and everything else in its path.
But according to a new column by conservative commentator David Brooks, the hysterical, anti-government ideology that has taken root within even mainstream corners of the Republican Party is driven by an "oversimplified version of American history, with dangerous implications."
The simple mathematics are that the world needs one nuclear-plant equivalent of carbon-free energy coming on line every day between now and midcentury. The reality is that scaling clean energy sources at that pace is going to require serious technological innovation and sustained commitment to fielding and improving clean energy technologies.
Pacala and Socolow (8) analyzed a scenario that envisioned stabilizing atmospheric concentrations of CO2 at 500 ppm within 50 years. They found that reaching that goal required the deployment of seven existing or nearly existing groups of technologies, such as more fuel-efficient vehicles, to remove seven "wedges" of predicted future emissions (the wedge image coming from the shape created by graphing each increment of avoided future emissions). Those seven wedges, each of which represents 25 gigatons of avoided carbon emissions by 2054, are cited by some as sufficient to "solve" climate change for 50 years (9).
Unfortunately, the original wedges approach greatly underestimates needed reductions. In part, that is because Pacala and Socolow built their scenario on a business as usual (BAU) emissions baseline based on assumptions that do not appear to be coming true. For instance, the scenario assumes that a shift in the mix of fossil fuels will reduce the amount of carbon released per unit of energy. This carbon-to-energy ratio did decline during prior shifts from coal to oil, and then from oil to natural gas. Now, however, the ratio is increasing as natural gas and oil approach peak production, coal production rises, and new coal-fired power plants are built in China, India, and the United States (10).
The enormous challenge of making the transition to carbon-neutral power sources becomes even clearer when emissions-reduction scenarios are based on arguably more realistic baselines, such as the Intergovernmental Panel on Climate Change's "frozen technology" scenario ( 11, 12). Capturing all alternate energy technologies, including those assumed within this BAU scenario, means that a total of ~18 of Pacala and Socolow's wedges would be needed to curb emissions (13) (see the figure). And to keep future warming below 2°C, even under the Davis et al. age-out scenario, an additional 7 wedges of emissions reductions would be needed-- for a total of 25 wedges (see the figure).
Last week's The Economistleader and cover story, "Picking winners, saving losers", painted an insidious picture of governments' increasing intervention in market economies, arguing that the hideous Leviathan of the state was gobbling up one sector after another and warning that "picking industrial winners nearly always fails." Now, put aside the fact that the government was forced into some sectors--such as automobiles and financial services--only after mammoth market failures and pleas for rescues from capitalism's chieftains. The more important fact is that the article feeds a Socialism-is-coming hysteria and ignores how picking winners--within limits--has worked in the past for the United States (and Japan, South Korea, etc.) and is needed more than ever to bolster our long-term competitiveness.
Of course, the debate about the appropriate role between the state and the private sector in market economies has raged for centuries. The debate is marred in part by vague terminology, and The Economist perpetuates this problem by throwing around a slew of terms--"picking winners", "industrial policy", "innovation policy"--without adequately distinguishing between them but while uniformly indicting them as inappropriate manifestations of government economic intervention.
It would be more constructive to envision a continuum of government-market engagement, increasing from left to right in four steps from a "laissez faire, leave it to the market" approach to "supporting factor conditions for innovation (such as education)" (which The Economist endorses, as, certainly, does ITIF) to going further by "supporting key technologies/industries" to at the most extreme "picking specific national champion companies", that is, "picking winners." And while it is generally inadvisable for governments to intervene in markets to support specific national champion companies, ITIF believes there is an appropriate role for government in placing strategic bets to support potentially breakthrough nascent technologies and industries.
Instead of raising the price of fossil fuels, Gates argues that the time has come to shift our attention to raising the revenues necessary to fuel innovation and make clean energy cheap.
In a new interview with Technology Review, Bill Gates nails the global energy and climate challenge and discusses the need for dramatic increases in energy innovation funding to make clean energy cheap.
In a climate discourse dominated by emissions targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.
In this new interview, Gates discusses why dismissing the difficulty of the challenge is counter-productive, and argues that carbon pricing can never drive the dramatic innovation required to transform the global energy system. Instead of raising the price of fossil fuels, Gates argues that the time has come to shift our attention to raising the revenues necessary to fuel innovation and make clean energy cheap.
Below the fold, you can find excerpts from Gates' interview, which can be read in full here.
For more, the NYTimesAndy Revkin and TIME magazine's Bryan Walsh each spotlight the interview here and here, respectively.
The American Recovery and Reinvestment Act has funded breakthrough innovation and new growth industries that are driving down the cost of clean energy and building the foundation for competitive 21st century U.S. industries, according to a new White House reportreleased today on the impacts of the U.S. stimulus bill.
Yet while the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.
There's been some change over at WhiteHouse.gov's energy and environment page, but probably not the kind we had in mind when we heard President Obama's oft-repeated campaign slogan, "Change You Can Believe In."
A number of (as yet unfulfilled) energy and environmental policy pledges have been removed from the WhiteHouse.gov page in recent weeks.
Chief among them: President Obama's pledge to "invest $150 billion over ten years in energy research and development to transition to a clean energy economy," once a central plank in Obama's energy and environment platform, and a feature of his first national budget proposal (in FY2009).
The following was originally submitted to the National Journal discussion "
