Creating a Clean Energy Century: Recapturing the Lead in Clean Tech Innovation
By Josh Freed, Sam Hodas, Sarah Collins, and Stephanie Praus
While the energy market has always been driven by fossil fuels, it is moving slowly, but inevitably, toward clean energy as countries decide they can no longer tolerate the pollution costs and security risks of conventional energy or the threat of global warming. The great hurdle is making clean energy as cheap as fossil fuels. This will require major breakthroughs. Existing clean energy sources are too expensive and have technical limitations. The payoff is that the countries that are home to this next generation of affordable clean energy technologies will likely dominate the 21st century economy.
As clean energy use expands, we can import foreign innovations, made in foreign factories, or we can create, build and sell them here at home. The United States can emerge as the dominant economy of the 21st century, just as it was in the 20th century. But we will not get there unless we change course and do so rapidly.
The report’s key findings:
- Innovation is needed now, because while the world is moving to clean energy, today’s technology is neither cheap enough nor reliable enough to replace fossil fuels.
- The United States has a lot of catching up to do, thanks to market failures in the private sector and too little leadership, organization or investment from the federal government.
- There is a roadmap for American innovation leadership if we create a true public-private sector partnership to make clean energy cheap, reform existing structures, and commit to investing the necessary resources to get the job done.
1. Provide direction for clean energy innovation through a reformed federal clean energy infrastructure. This would start with restructuring federal innovation under a National Institutes of Energy, with the singular mission of developing the affordable, commercial clean energy technologies of the future. This would enhance the innovation programs that are already working at the national labs, Department of Defense, and Advanced Research Projects Agency-Energy (ARPA-E). Creating an Inter-Agency Innovation Emissary would help cut through the federal bureaucracy and ensure we capitalize on good ideas.
2. Create the early markets for private sector clean energy technologies until they are brought to scale and become affordable. There are two critical steps for this.
1) The U.S. should leverage the Department of Defense’s large procurement budget and demand for clean energy to create an initial market for new technologies that meet both tactical defense needs and have potential for widespread commercial use.
2) It should provide access to capital for companies that want to move new technologies from the lab to the market and small and medium-sized businesses to develop and purchase clean technologies.
3. Ensure that new clean energy technologies are manufactured in the United States and that every region of the country reaps the benefits. The government can work with business by providing tax incentives and investments to companies that will manufacture clean technologies in the U.S. or retool their manufacturing processes. We also need to ensure that American-made clean energy goods have access to overseas markets by strengthening our export promotion and protection programs. Finally, to help transition conventional energy states and localities, the U.S. should create Innovation Clusters that would foster public-private clean energy research efforts in every state and incentivize clean energy businesses to move to areas economically disadvantaged by the transion.
4. Educate the next generation of scientists and technicians to help America make the leap to clean energy. To accomplish these goals, we are going to have to rebuild the next generation of engineers and scientists. The U.S. must assist schools in strengthening their science, technology, engineering and math programs. Federal policy could also provide colleges and universities incentives to retool their science and math programs to focus on developing innovative technologies and reward researchers who commercialize their ideas. Finally, to draw bright graduates to dedicate time to working on important clean energy technology problems, it could create a Peace Corps-style organization that would seed public, non-profit and emerging private sector institutions.
5. Invest $15 billion in clean energy research, development, demonstration and deployment to bridge the capital gap in the private sector. This funding would ensure that the U.S. could compete in the global clean energy marketplace by increasing the supply of innovative clean energy technologies for purchase around the world, and we can do it without increasing the deficit through a combination of funding streams. This could include an energy modernization fee on electricity, the redirection of some fossil fuel subsides, or even by setting a low price on carbon.