September 03, 2014
Time to Move Beyond Clean Tech Boom and Bust: NYT
Consensus Builds Around Energy Innovation Imperative
In yet another sign of a growing consensus in support of energy policies that prioritize innovation, the New York Times on Sunday endorsed the recommendations of "Beyond Boom and Bust," a recent report by experts at the Breakthrough Institute, the Brookings Institution, and the World Resources Institute.
The Times urged Congress to reform federal energy subsidies to "reward lower costs and better performance" in order to drive low-carbon technologies towards unsubsidized cost competitiveness and end the cycle of boom and bust that threatens the vital clean tech sector.
"The idea is not to prop up clean tech industries forever. It is to get them to a point where they can stand on their own," the paper said. The Times called the report "a timely effort to attach real numbers to an increasingly politicized debate over energy subsidies."
Federal support for clean tech is headed for a cliff. Without congressional action, funding is set to drop 75 percent from its 2009 peak of $44 billion to just $11 billion in 2014, according to the report.
Public investments have paid off - and garnered massive private investments to grow the sector. Clean tech was one of the few sectors to add jobs during the Great Recession, and significant gains were made in the cost and performance of clean energy technologies, especially in wind and solar generation.
In an analysis of the clean tech investment horizon, also on Sunday, Ed Crooks of the Financial Times writes:
Although renewable energy - not derived from fossil fuels - still accounts for less than a tenth of total US energy use, it has been growing fast. Between 2006 and 2011 renewable electricity generation, excluding hydro power, doubled to 195m megawatt hours: enough to power 17m American homes, roughly one in every seven.
Nevertheless, Crooks notes, clean tech remains dependent on policy support:
Most of these technologies are unable to stand on their own commercially, particularly in competition with a resurgent natural gas industry that has created a supply glut and driven prices to 10-year lows. Without a change of direction in Washington, the US renewable energy industry faces shrinking markets, business failures and tens of thousands of job cuts.
The debate over clean energy has become highly politicized. But some Republicans - including Senators Lisa Murkowski, Richard Lugar and John Thune - have suggested that the path forward may lie with innovation-centered reforms. Policy makers should see the increasing maturation of clean energy technologies and the impending drop in federal investment as an opportunity to enact smart reforms that drive technological progress, create jobs, and use taxpayer resources wisely.