Clean Energy Innovation: A Way to Crack America’s Frozen Climate Debate?

On Nov. 4, the Paris Climate Agreement will enter into force, less than a year after the final negotiations wrapped up. It commits the nations of the world to keep global average temperatures from rising by more than two degrees Celsius. This goal sounds simple but it implies an extraordinary transformation of the world’s energy system — the end of coal, oil, and natural gas as we use them today — in less than 40 years.

The stark truth is that we do not yet have the technologies and systems that we will need to make this transformation. A transportation system that runs on electricity or hydrogen or zero-carbon biofuels. An electricity system that runs on renewables or nuclear power or plants that capture and sequester carbon pollution. Hospitals, schools, offices, factories, and homes that use radically less energy than today’s without compromising quality. Innovation is the only way to get there. Low-carbon energy innovation is an idea that a broad coalition ought to get behind: right, left, and center.

To be sure, we can make some progress toward the Paris goal with the solar panels, green buildings, nuclear plants, and other capabilities in today’s energy toolkit. The United States, in fact, ought to hit and even exceed its interim target of 26 to 28 percent reductions in carbon emissions by 2025. But interim success isn’t good enough. Interim reductions, as impressive as they may seem, still essentially pluck low-hanging fruit. System transformation is hard, very hard, especially on a global scale and in nations that cannot afford to pay a price premium for clean energy. And, if the world doesn’t get all the way there by 2050 or thereabouts, the environmental consequences will be very bad indeed.

The Paris negotiators were aware of this dilemma, and they signed another lesser-known agreement that seeks to accelerate the development of better, cheaper, and more reliable low-carbon energy systems. “Mission Innovation” commits many of the world’s largest nations, including the United States, to double their investments in low-carbon energy research and development by 2020. It also involves a global group of deep-pocketed entrepreneurs, led by Bill Gates, who will provide billions in follow-on investments to take energy innovations to market.

A year on, Congress remains embroiled in partisan bickering over fulfilling the United States’ commitment. But there are glimmers of hope across the ideological spectrum that might be realized once this endless election season is finally over.

An emerging “eco-right” accepts the reality of human-caused, potentially catastrophic climate change. This young, boisterous movement takes global stewardship as an article of faith. While skeptical of government and heavy-handed regulation, the eco-right recognizes that markets will not by themselves trigger the low-carbon transformation. Public investments that support innovation and entrepreneurship, properly designed, would advance the eco-right’s conservative values.

The environmental left calls for regulating carbon emissions while subsidizing the deployment of renewables on a massive scale. A key assumption of this approach is that the costs of renewables will continue to decline as rapidly as they have in the past. That is a high-risk gamble — at a minimum, increased federal research and development spending provides insurance against unexpected obstacles that might flatten the cost curve. And even if the curve stays steep, integrating renewables into the power grid on a large scale and electrifying transportation will remain huge challenges. Creating a smart, interactive, transportation-linked grid will require system-level innovations that greens ought to support with enthusiasm.

The pragmatic center worries about the high cost and inefficiency of subsidizing higher-priced clean energy, but has been frustrated that the simpler approach of pricing carbon pollution has been rejected by Congress and the public. Innovation and carbon pricing are complementary, as many economists have shown. Investing in innovation in the short run promises to make a carbon price more acceptable in the long run. Rather than banging their heads on the carbon price wall one more time, the pragmatists should see the virtue of scaling innovation programs that already exist, are popular, and don’t cost that much.

In fact, the cost of fulfilling the United States’ Mission Innovation commitment is only $6.4 billion when fully ramped up in fiscal 2021. The Obama administration has proposed a $1.3 billion down payment in the current fiscal year. By comparison, tax incentives for oil and gas production alone cost the Treasury about $6 billion each year.

This rather modest investment in innovation now will pay big dividends later, although it must be coupled with reforms of our national laboratories, electric utilities, and other institutions for its full value to be unlocked. It might even pay big political dividends now, if agreement on the common objective of accelerating low-carbon energy innovation can thaw America’s frozen climate policy debate.


David Hart (@ProfDavidHart) is a senior fellow at the Information Technology and Innovation Foundation, the leading U.S. science and tech policy think tank. Hart is also the author of the new report, “Rescuing the Low-Carbon Energy Transition From Magical Thinking.”

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