Will the Academic and the Regulator Invest?

December 10, 2008 |

By Jesse Jenkins and Adam Zemel

Barack Obama made public today his intentions to appoint Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy and Carol Browner, former EPA Administrator and current transition team advisor for energy and environment, as the administration's new "Energy and Climate Czar."

Breakthrough gives Obama's selection of Dr. Steven Chu a preliminary thumbs up, while the selection of Browner - who seems to see regulations as the primary driver of innovation - raises concerns about the kind of counsel Obama will receive from his new point person on energy and climate change.

Steven Chu, a Nobel laureate clean energy expert, is well known for turning the Berkeley Lab into a center of clean energy and efficiency innovation, forging the Berkeley Lab-British Petroleum partnership, sitting on the Copenhagen Climate Council, and winning a Nobel Prize in physics in 1997. His appointment is probably most notable for the sharp contrast between the capable, knowledgeable academic and the past military officers, oil industry consultants and utilities executives who have served in the position.

Last year, Chu was the co-chair of an InterAcademic Council Paper entitled Lighting the Way: Toward a Sustainable Energy Future. The report proposes "best practices for a global transition to a clean, affordable and sustainable energy supply in both developing and developed countries," focusing on policies to support the development and deployment of technologies "that can transform the landscape of energy supply and demand around the globe." If Lighting the Way is reflective of Chu's understanding of the energy challenge, he clearly sees it as a technology-driven global development challenge, a good sign that Chu is the right pick to head up DOE and it's many energy RD&D programs.

Speaking at this summer's National Clean Energy Summit convened by Senator Harry Reid, Dr. Chu also evidences a keen understanding of the potentials of energy efficiency and the need for breakthrough renewable energy technologies. "Another myth is [that] we have all the technologies we need to solve the energy challenge. It's only a matter of political will," he says. "I think political will is absolutely necessary... but we need new technologies to transform the [energy] landscape." He then goes on to discuss the work on breakthrough solar and biomass technologies pursued under his leadership by LBNL's new Helios Project.

Coming, as he does, from within the National Labs system itself, it will be interesting to see if Chu will advocate the sweeping reforms to America's energy technology innovation system we need. It's also unclear if Chu's academic acumen will translate well to a more political stage. But what does seem to be clear is that in Dr. Chu, Obama has found an able technologist with a keen grasp on both the technical and political challenges of creating a new global energy economy.

Browner, on the other hand, gives reason for concern. The former Administrator of the EPA during the Clinton years, Browner seems to be a strong proponent of regulations as a driver of innovation. In a panel discussion hosted by the Center for American Progress on December 1st, she recycles well-worn myths about regulations driving innovation:

"As a former regulator -- and I can cite you any number of stories --when the government steps up and says there's a requirement, that we're going to have to take sulfur out of diesel fuel, you're going to have to get rid of CFCs (chlorofluorocarbons) by a date certain, what the government is doing is creating a market opportunity.

...And so, while [Pennsylvania Governer Ed Rendell] has been talking very importantly about how we need to make investments, those investments, when they are partnered with a government requirement -- a regulation that we're going to reduce greenhouse gas emissions, that we're going to reduce this climate pollutant -- the upside is phenomenal, more than we can possibly imagine in this room."

Unfortunately, it's just not the case that regulation is a primary driver of innovation, no matter how many times these myths are repeated. In the case of CFCs, the debates over the Montreal Protocol took so long that Dupont invented new, low cost alternatives before the treaty was ever signed; indeed, the treaty was made politically possible by the emergence of these new technologies, not the other way around. Likewise, new smokestack scrubbers and affordable supplies of low-sulfur Powder River Basin coal existed prior to the passage of the 1990 Clean Air Act amendments that established a successful cap and trade program to reduce sulfur dioxide pollution, a main contributor to acid rain.

What we see time and time again is that regulations - which may work well as "tech pull" policies that pull already existent technologies into the marketplace - will do little to drive the development of new technologies ("tech push" policies). Only public investment and an active partnership between government, academia and business will drive the development of the clean, affordable and massively scalable energy sources we'll need to overcome the global climate challenge.

Let's also hope that Browner has the political sense to understand the sheer amount of political capital Obama would squander if he inaugurates his new administration by championing carbon pricing right out of the gate, not to mention a sensitivity for the economic effects a carbon price would have on the economy during this deep recession.

So a Nobel laureate is leaving the Bay Area to play big league politics in the nation's capital, and a former regulator is coming back for another tour inside the Beltway. The real question here is: will they be champions of investment and innovation?

With Chu, it's hard to be sure. Will clear-eyed academic acumen translate into bold and visionary clean energy innovation policy? Initial signs at least are promising, and we're excited to see what Chu advocates in his new position on the national stage.

As for Browner, as of December 1st, 2008 (9 days ago at the time of publication), investment doesn't seem to be her top priority. Will she counsel Obama to push hard for carbon regulations to "create a market opportunity" and (try to) spur innovation? Or will she learn a thing or two from her new colleague, Dr. Chu, about the state of energy technology and the real history of environmental technology innovation? Only time will tell. Stay tuned...