November 18, 2009
Strengthening Clean Energy Competitiveness: Opportunities for America COMPETES Reauthorization
In response to numerous reports documenting a sharp decline in U.S. clean energy competitiveness, experts at three leading U.S. think tanks have issued a new policy report calling on Congress to strengthen U.S. innovation and competitiveness policies in this key industry through the reauthorization of the America COMPETES Act. The report, "Strengthening Clean Energy Competitiveness: Opportunities for America COMPETES Reauthorization," was released today by the Breakthrough Institute, the Information Technology and Innovation Foundation (ITIF), and the Brookings Institution Metropolitan Policy Program.
Congress first passed this flagship competitiveness legislation in 2007 in response to concerns that the United States was losing its ability to compete economically with other nations. On May 28, 2010, the U.S. House of Representatives passed the COMPETES reauthorization by a vote of 262-150 and the bill is set to be debated in the Senate. The reauthorization comes at a time when the United States seeks new sources of growth in a fiscally constrained environment. The clean energy market is one such growth industry--expected to surpass $600 billion by 2020--but the U.S. faces unprecedented global competition.
In "Rising Tigers, Sleeping Giant," an authoritative report on international clean energy competitiveness, the Breakthrough Institute and ITIF recently demonstrated how U.S. leadership on a number of clean energy competitiveness metrics has declined in the last decade. The United States' historic lead in energy innovation is slipping as other countries implement national innovation strategies. America now lags economic competitors in Asia and Europe in the manufacture of virtually all clean energy technologies. And the U.S. lags its economic rivals in preparing its future workforce with critical science, technology, engineering and math education (STEM).
The new report argues that to regain leadership in the global clean energy market, the United States must prioritize major investments in clean energy technology and embrace bold new paradigms in clean energy education, innovation, and production and manufacturing policy.
"Meeting the aggressive challenges to U.S. clean energy leadership will require both increased funding for critical education and technology programs as well as new ideas for how the federal government can foster innovation in the clean energy industry, from basic research to full-scale commercialization," said Mark Muro, Director of Policy at the Brookings Institution Metropolitan Policy Project.
To strengthen clean energy competitiveness through the reauthorization of America COMPETES, the report calls on Congress to:
- Increase funding for clean energy education programs to train a new generation of energy scientists, engineers, and innovators;
- Ensure a scheduled increase in the research budgets for key science and technology agencies;
- Authorize funding for innovative clean energy innovation programs like Energy Frontier Research Centers (EFRCs), DOE Energy Innovation Hubs and the Advanced Research Projects Agency for Energy (ARPA-E);
- Support domestic clean energy manufacturers by establishing a new industrial innovation institute, creating a new manufacturing supply chain initiative, and providing low-cost loans for the retooling and expansion of clean energy manufacturing facilities; and
- Catalyze the development of clean energy industry clusters through funding new regional cluster initiatives and clean energy research consortia.
Although America COMPETES does not address tax policy, the authors also urge Congress to enact a more robust R&D tax credit and extend the 48C tax credit for advanced energy manufacturing.
"Each of these four areas--education, research and innovation, manufacturing, and industry cluster initiatives--are core components of a comprehensive clean energy competitiveness strategy that should be supported by Congress," said Jesse Jenkins, Director of Climate and Energy Policy at the Breakthrough Institute.
Accelerating the pace of clean energy innovation is also critical to affordably reducing greenhouse gas emissions, an important priority for policymakers. "Making clean energy cheap is essential to addressing climate risks," noted Jenkins.
The authors also address policymakers' concerns about rising federal deficits and identify a number of potential funding sources for these critical clean energy competitiveness programs, including sunsetting existing subsidies for fossil fuels or dedicating revenues from carbon permits or fees, an electricity wires charge for energy modernization, or federal revenues from oil and gas production.
"Ultimately, returning the federal budget to long-term solvency will require smart public investments today to strengthen U.S. competitiveness in emerging industries and lay the foundation for economic growth," said Rob Atkinson, President of the Information Technology and Innovation Foundation. "It is precisely because of our difficult fiscal situation that the investments outlined in this report are a critical priority."
Read the report here.
Click here to see a two-page summary comparison of the House-passed America COMPETES reauthorization bill with the key recommendations of the report.