Applied Materials and Breakthrough Institute: Closing the Clean Energy Gap with Asia

March 1, 2010 | Michael Shellenberger, Ted Nordhaus,

Originally published at the Austin Statesman

Charlie Gay, Michael Shellenberger and Ted Nordhaus, Special Contributors

A race is on to lead in the burgeoning clean energy sector. While the United States might be behind for now, we are far from the finish line.

America once led the global solar business, but manufacturing scale is shifting to Asia. Strong, targeted government incentives supported markets for solar technology in Japan, a country almost completely dependent upon imported energy.

At the same time, public investment in research and innovation helped build the technical prowess needed to establish solid manufacturing capabilities. The Chinese government, along with numerous entrepreneurs, is developing manufacturing and technical capabilities for solar and other clean energy technologies that will combine economies of scale with a growing market, which many project could be the largest in the world in five years.

Asia's current momentum is not exclusive to solar power. A Breakthrough Institute report, "Rising Tigers, Sleeping Giant," found that America lags behind Asia's rising "clean tech tigers" -- China, South Korea and Japan -- in producing virtually all clean energy technologies, from wind to nuclear power, from high-speed rails to plug-in hybrid cars and the advanced batteries that power them.

The governments of these three nations are expected to invest more than $500 billion over the next five years to extend their lead in clean technology products and applications. That's enough to out-invest the U.S. by a 3-to-1 margin unless this country establishes a national clean energy competitiveness strategy. Devising a strategy and fulfilling the vision is feasible, and there is historical precedent to prove it.

When the U.S. faced global competitors willing to invest enormous sums to dominate defense and information technologies during the Cold War, the nation's response was bold and proactive.

Our government introduced procurement programs, policies and incentives that provided strong demand for emerging information technology, semiconductor and computing technologies, while U.S. investments in research and education provided the human capital needed to block the threat. These investments sparked the IT revolution and helped create economic clusters such as Silicon Valley that have given the U.S. an enduring competitive edge.

Today, government investment is determining the location of the new "Silicon Valleys" of clean technology -- in China. One Chinese city, Baoding, is home to more than 200 renewable energy companies. Dubbed "Electricity Valley," the city is a national clean energy hub, linking manufacturing to research institutions and public policy.

In contrast to the investments made by the U.S. government during the Cold War era, the U.S. response to today's clean energy race has not been mobilized, threatening the promise of a new wave of American prosperity fueled by emerging clean energy industries and jobs.

On Jan. 8, President Barack Obama announced $2.3 billion of funding from the economic stimulus for the "domestic manufacturing of advanced clean energy technologies," according to an administration official. While these steps toward a clean energy economy are potentially consequential, energy and climate legislation working its way through Congress is more focused on limiting pollution than continuing the investments needed to secure our nation's competitiveness.

We need an integrated strategy, combining the insights and vision of industry, government, academia, utilities and consumers. This approach will facilitate the investment climate required to ensure stability and long-term demand for renewable energy.

There's room for another "Silicon Valley" of clean technology outside of China. The U.S. can close the investment gap with Asia and provide direct support for its clean tech research and innovation, manufacturing capacity and domestic markets if we pursue a long-term national clean energy competitiveness strategy. Robust and targeted public investments such as the ones committed recently by Obama can pave the way to a new era of U.S. technology leadership and economic prosperity -- but only if we act now.

Gay is president of Applied Solar at Applied Materials. Shellenberger is president and Nordhaus is chairman of the Breakthrough Institute.