30 Apr 2009: Opinion

To Make Clean Energy Cheaper,
U.S. Needs Bold Research Push

For spurring the transformation to a low-carbon economy, the federal and state governments, universities, and the private sector must join together to create a network of energy research institutes that could speed development of everything from advanced batteries to biofuels.

by mark muro and teryn norris

Energy Secretary Steven Chu recently called for “Nobel-level” breakthroughs and a “second industrial revolution” in energy technology to overcome the world’s interlinked energy and climate challenges.

Chu’s implication: We currently lack the technologies we need to fully avert catastrophic global warming. His admonition: America must dramatically accelerate the development of clean energy technology.

Chu has it right.

The task is clear: To renew the U.S. economy, respond to global climate change, foster the nation’s energy security, and help provide the energy necessary to sustainably power global development, America must transform its outdated energy policy. Innovation and its commercialization must move to the center of energy system reform. The nation must move urgently to develop and harness a portfolio of clean energy sources that are affordable enough to deploy on a mass scale throughout the U.S. and the world. In short, we must make clean energy cheap.

Putting a price on carbon will take us part of the way, but not nearly far enough. To make the revolutionary shift to a low-carbon economy, we propose a bold new research paradigm: the creation, over time, of several dozen renewable energy research hubs around the nation. These centers — known as energy discovery-innovation institutes, or e-DIIs — would be established with a combination of federal, state, university, and private funds and would take the lead in accelerating the development of reasonably priced alternative energy technologies and bringing them to the marketplace.

The Brookings Institution’s Metropolitan Policy Program — joined by a number of leading universities, regional alliances, and corporate partners

Institutes within the network that make clean energy breakthroughs would grow. Those that did not, would die.

— has laid out a detailed plan for launching a network of energy innovation institutes around the country. In the Southwest, the institutes might focus on advancing solar technologies. Centers in the Great Lakes region might speed development of advanced battery technology or hydrogen fuel cells. Energy innovation institutes in the Great Plains might focus on developing sustainable, non-food sources of biofuels.

Individual energy innovation institutes would vary not only by theme but also size, with some centers operating with budgets as small as $10 million to $15 million per year, while others — the most successful and ambitious — might see their budgets grow to as large as $100 million to $200 million a year, making them as robust as large academic medical centers. Those energy research institutes that “delivered the goods” in terms of clean energy breakthroughs within 5 to 10 years would grow; those that did not, would die. Ultimately, total federal investment in the energy research institutes could grow to $6 billion per year.

Such an ambitious plan is needed to meet the enormous challenges we face: Over the next four decades, global energy demand is expected to triple. At the same time, global greenhouse gas emissions must fall rapidly, decreasing at least 50 to 85 percent by mid-century to avert disruptive climate change.

Most of the growth in energy demand will occur in the developing world, as nations like China, India, and Brazil continue to lift their citizens out of poverty and build modern societies. Overall, that’s a very good thing: Increased access to energy brings electricity to pump and treat potable water, lights to read and study by, access to modern health care, relief from backbreaking physical labor, and much more.

The problem, however, is that fossil fuels remain cheap and abundant. That means that in the absence of similarly affordable and large-scale clean energy sources, the nations of the developing world will turn to coal and other fossil fuels to power their development, just as we in the United States have done. And that would virtually assure massive climatic destabilization, regardless of what occurs in the developed nations of the world.

Hence the dominant climate policy agenda of our time: Captivated by market logic and sophisticated regulatory schemes, mainstream climate policy advocates have focused above all on utilizing market-based mechanisms and price signals — such as carbon taxes and cap-and-trade plans — to make dirty energy more expensive. According to this approach, the resulting price signals would spur private-sector investment and innovation in clean energy alternatives and secure the energy technology transformation we need.

But there is one complication: Policymakers and the public alike are reluctant to increase the price of energy significantly through higher prices on carbon emissions. At a time of deep economic recession, public tolerance for higher energy prices wanes.

In the developing world, the message is even clearer, summed up by one Chinese official, Lu Xuedu, of the Office of Global Environmental Affairs. “You cannot tell people who are struggling to earn enough to eat that they need to reduce their emissions,” declared Lu.

None of which means that putting a price on carbon is a bad idea. Internalizing the many costs of burning dirty fuels is long overdue. But in the midst of a recession, any carbon-pricing scheme the current Congress manages to enact will likely price carbon at levels far below those needed to adequately stimulate rapid deployment of clean energy technologies.

Moreover, price signals alone can only do some of the work, because even ambitious pricing will not fully address the many non-price-related market failures standing in the way of a cleaner and more efficient energy system.

Nowhere is this clearer than in the innovation game. Private energy firms chronically under-invest in energy R&D because they cannot fully capture the future returns of their innovations, which spill over to their competitors. And in contrast to the consumer electronics, pharmaceutical,

We can’t rely solely on market signals to make clean energy cheap. The government must play a more active role.

and computer industries, too few early adopters in the energy-sector are willing to pay five times more to own the latest, greatest gadget, which means that emerging energy technologies must become competitive much more quickly to survive. That makes private companies reluctant to make bets on new clean energy technologies. The energy industry remains one of the least research-intensive industries in the economy. The upshot: private-sector investment in energy R&D will almost certainly proceed more slowly than the climate challenge demands.

Which bring us to the crux of the matter: If we can’t rely solely on market signals to make clean energy cheap, the national government must play a more active role. Once again, as it did in laying down the railroads and highways and stimulating the electronics and biotech explosions, the federal government must make significant investments in activities and infrastructure. This includes supervising the construction of a modern, nationwide smart grid that will open the way for private investments in new energy sources by allowing the flexible distribution of renewable power. The government must also make direct investments to support the deployment of emerging clean energy technologies, driving economies of scale, and bringing down prices. And, finally, the government must increase the federal R&D budget by an order of magnitude while deploying some of its investments in radically new ways.

Current federal spending on non-defense, energy R&D remains far too small. The current outlay of about $4 billion is less than half of the amount spent, in real dollars, in 1980. New infusions in the recent economic stimulus package will boost the current figure, as will an additional $15 billion a year to be set aside for clean-tech investments from the cap-trade system projected by President Obama’s recent budget outline. Still, such investments will likely come in below the $20 billion to $30 billion per year in federal clean energy R&D that many analysts believe is needed to address the climate and security threats posed by the nation’s fossil fuel dependence.

At the same time, federal energy research remains outdated and fragmented. To begin with, the U.S. Department of Energy (DOE) really isn’t even in the energy innovation business. The bulk of the department’s funding and operational competence remain focused on managing — and cleaning up after — the nation’s sprawling nuclear weapons system. Otherwise, what energy research efforts do exist within DOE remain insular, focused largely on weapons development, and generally organized around an “energy technology of the year,” instead of the integrated approach demanded by the nation’s complex array of energy challenges. The bulk of DOE’s research activities — despite excellence in certain areas — remain too removed from the marketplace to quickly develop and commercialize clean energy innovations.

To fully mobilize the entire national research enterprise — universities, federal laboratories, and corporate R&D centers — the nation needs to begin creating a network of energy innovation institutes. Developed by the National Academy of Engineering, the energy innovation concept is characterized by institutional partnerships, interdisciplinary research, technology commercialization, education, and outreach. The institutes would place a high priority on collaboration, commercialization, and performance.

What sort of research would likely be conducted at the energy innovation institutes? One or two would surely mount an aggressive push on new

The institutes would draw on local workforces, scientists, and businesses to rapidly deploy new technologies.

materials and designs for low-cost solar panels. Others might lead the charge on the development of massive, cost-effective energy storage; new battery chemistry that will lead to truly viable electric vehicles; better plant growth and biotechnology conversion to provide affordable biofuels; superconductive transmission lines for efficient electrical power distribution; new techniques for sequestering carbon or even capturing it from the air; and much more.

The institutes would be geared toward rapid technology transfer designed to maximize the economic and social impact of new renewable technologies. Breakthrough inventions could be protected by intellectual property laws. Depending on the region, energy innovation institutes could take shape at university campuses, through national labs, at other institutes, or even virtually. A competitive awards process would seek to target the best proposals from wherever they originate. And the regional nature of the centers is key: the institutes would draw on local workforces, scientists, businesses, and other resources to rapidly deploy new technologies that respond to local challenges and stimulate local economic development.

Successful examples of effective, practical collaboration among universities, government, and industry already exist. One such enterprise is the Energy Biosciences Institute, a renewable energy research group involving the University of California at Berkeley, the University of Illinois at Urbana-Champaign, Lawrence Berkeley National Laboratory, and the oil giant, BP.

In important ways, the energy innovation institute concept represents a contemporary adaptation of the research paradigm created through the land-grant acts passed by Congress in the 19th century. Then, federal investments established a network of university-based agricultural and engineering experiment stations, augmented by extension services capable of interacting directly with the marketplace. That program was instrumental in developing and deploying the technologies necessary to build a modern industrial nation for the 20th century, while stimulating local economic growth.

Today, the U.S. needs a similarly bold campaign to enlist America’s universities, laboratories, and companies in solving one of the most complex and important problems — the transition to a clean-energy economy — that the nation has ever faced.

David Warren, a research analyst at the Brookings Institution, and Jesse Jenkins, director of energy and climate policy at the Breakthrough Institute, also contributed to this article.

POSTED ON 30 Apr 2009 IN Business & Innovation Energy North America

Print Email Digg Del.icio.us Reddit Mixx Facebook

COMMENTS

Thanks a lot for the positive and creative approach for facing the present crisis. Fortifying the whole cities against the bulging sea or air conditioning it can't be the real solution. The best solution is alternative and cheap energy. Being dependent mainly on the limited store of fossil fuel itself was a blunder in the past. Why not to explore the unlimited and clean sources of solar and bio energy. But necessarily it should be cheap.

Posted by Padam Pande on 19 Sep 2009

It is very true that consumers want what is affordable. Becoming energy efficient is great and to many, very important. However, the fact remains that money rules most decisions when it comes to families who have to think about their spending on a daily basis. Making clean energy more affordable for all is the way to go.

Posted by Austin DWI Attorney on 02 Nov 2009

POST A COMMENT

Comments are moderated and will be reviewed before they are posted to ensure they are on topic, relevant, and not abusive. They may be edited for length and clarity. By filling out this form, you give Yale Environment 360 permission to publish this comment.

ABOUT THE AUTHORS
Mark Muro, left, is a fellow and director of policy at the Metropolitan Policy Program at the Brookings Institution. He is a co-author of the Brookings report, “Energy-Innovation Institutes: A Step toward America's Energy Sustainability.” Teryn Norris is a project director at the Breakthrough Institute, a Oakland, Calif.-based think tank that, among other issues, focuses on making the transition to a clean-energy economy.

Print

Email

Tweet This

Digg

Del.icio.us

Reddit

Mixx

Facebook

Stumble Upon

Pervasive Plastics: Why the U.S.
Needs New and Tighter Controls
Long a ubiquitous part of modern life, plastics are now in everything from diapers to water bottles to cell phones. But given the proven health threats of some plastics — as well as the enormous environmental costs — the time has come for the U.S. to pass a comprehensive plastics control law.
READ MORE

The Pursuit of New Ways
to Boost Solar Development
The solar power boom in Germany, Spain, and parts of the United States has been fueled by government subsidies. But now some U.S. states — led by New Jersey, of all places — are pioneering a different approach: issuing tradable credits that can be sold on the open market. So far, the results have been promising.
READ MORE

Amid Mounting Pessimism,
A Voice of Hope for Copenhagen
With skepticism growing about the chances of reaching a climate agreement next month in Copenhagen, Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change, says he is “cautiously optimistic” that a treaty can still be signed. But in an interview with Yale Environment 360, Pachauri says the global community may have to move ahead without any commitment from the United States.
READ MORE

Pulling CO2 from the Air:
Promising Idea, Big Price Tag
Of the various geoengineering schemes being proposed to cool an overheated planet, one approach — extracting carbon dioxide from the atmosphere using “artificial trees” — may have the most potential. But both questions and big hurdles remain before this emerging technology could be widely deployed.
READ MORE

New York City Girds Itself
for Heat and Rising Seas
By the end of the century, New York’s climate could resemble that of present-day Raleigh, North Carolina and its harbor could easily rise by two feet or more. Faced with this prospect, the city is among the first urban centers to begin changing the way it builds its infrastructure — and the way it thinks about its future.
READ MORE

Apocalypse Fatigue: Losing
the Public on Climate Change
by ted nordhaus and michael shellenberger
Even as the climate science becomes more definitive, polls show that public concern in the United States about global warming has been declining. What will it take to rally Americans behind the need to take strong action on cutting carbon emissions?
READ MORE

Pervasive Plastics: Why the U.S.
Needs New and Tighter Controls
by john wargo
Long a ubiquitous part of modern life, plastics are now in everything from diapers to water bottles to cell phones. But given the proven health threats of some plastics — as well as the enormous environmental costs — the time has come for the U.S. to pass a comprehensive plastics control law.
READ MORE

Coping With Climate Change:
Which Societies Will Do Best?
by gaia vince
As the world warms, how different societies fare in dealing with rising seas and changing weather patterns will have as much to do with political, social, and economic factors as with a changing climate.
READ MORE

The Greenest Place in the U.S.
May Not Be Where You Think
by david owen
Green rankings in the U.S. don’t tell the full story about the places where the human footprint is lightest. If you really want the best environmental model, you need to look at the nation’s biggest — and greenest — metropolis: New York City.
READ MORE

The Economic Case for
Slashing Carbon Emissions
by frank ackerman
Amid a growing call for reducing atmospheric concentrations of CO2 to 350 parts per million, a group of economists maintains that striving to meet that target is a smart investment — and the best insurance policy humanity could buy.
READ MORE

The Other Inconvenient Truth:
The Crisis in Global Land Use
by jonathan foley
As the international community focuses on climate change as the great challenge of our era, it is ignoring another looming problem — the global crisis in land use. With agricultural practices already causing massive ecological impact, the world must now find new ways to feed its burgeoning population and launch a "Greener" Revolution.
READ MORE

A Timely Reminder of
the Real Limits to Growth
by bill mckibben
It has been more than 30 years since a groundbreaking book predicted that if growth continued unchecked, the Earth’s ecological systems would be overwhelmed within a century. The latest study from an international team of scientists should serve as an eleventh-hour warning that cannot be ignored.
READ MORE

What Makes Europe
Greener than the U.S.?
by elisabeth rosenthal
The average American produces three times the amount of CO2 emissions as a person in France. A U.S. journalist now living in Europe explains how she learned to love her clothesline and sweating in summer.
READ MORE

Why I Still Oppose
Genetically Modified Crops
by verlyn klinkenborg
Introduced more than a decade ago, genetically modified crops are now planted on millions of acres throughout the world. But the fundamental questions about them remain — both about their safety and their long-term impact on global food security and the environment.
READ MORE

Pumping Up the Grid:
Key Step to Green Energy
by michael noble
The U.S can build all the wind turbines and solar arrays it wants, but until it does something about improving its outmoded electricity grid, renewable energy will never reach its potential. What we need is a new electricity transmission system, with the costs shared by all.
READ MORE