Jumpstarting a Clean Energy Revolution: A Gathering Global Consensus

Today, the United States faces a nation-defining challenge and opportunity - getting America running on clean energy. In the past, the United States has confronted other significant obstacles by making a national commitment to invest the resources necessary to overcome it. In light of the clean energy, climate, and economic challenges we now face, the Breakthrough Institute and Third Way will release a report detailing why the U.S. must make just this sort of national commitment, once again, by scaling-up clean energy R&D on the order of $15 billion per year and creating a National Institutes of Energy to expand our clean energy innovation capacity and jumpstart a clean energy revolution.

This Thursday September 17, the Breakthrough Institute, Third Way, and U.S. Senator Sherrod Brown (D-OH) will be holding a forum on Capitol Hill to reveal, Jumpstarting a Clean Energy Revolution with a National Institutes of Energy, and to discuss how a focused innovation program will lead to a prosperous clean energy economy by making promising clean energy technologies a reality.

The Breakthrough Institute and Third Way report is the latest among a growing chorus of expert voices advocating the importance and urgency of both a dramatic increase in federal investments in clean energy R&D and the implementation of new models for federal innovation. The following is a selection of recent reports and recommendations, all part of the gathering consensus that the U.S. currently lacks both the structure and the financial commitment necessary to spur the dramatic clean energy innovation necessary to meet critical national economic, energy and climate objectives.

Brookings Institution, Metropolitan Policy Project (February 2009)
Energy Discovery-Innovation Institutes - A Step Towards America's Energy Sustainability
This major report, co-authored by experts from the university and research communities, argues that the U.S. energy innovation system is currently mired in "an obsolete research paradigm" and invests far too little in clean energy innovation. The private sector suffers from multiple market failures that curtail necessary innovation, while state governments lack the consistent resources necessary to adequately fund clean energy R&D, the report argues. Federal action is needed to remedy this situation, and the report calls for the establishment of "a national network of regionally based energy discovery-innovation institutes (e-DIIs) to serve as hubs of a distributed research network" that would "join the unique capabilities of America's research universities to those of corporate R&D and federal laboratories." This new network of e-DIIs should be established as part of a larger effort to move clean energy "innovation and its commercialization to the center of national reform" and dramatically scale up federal investment in energy R&D to $20-30 billion per year. Roughly $6 billion of which would fund the network of e-DIIs, providing core federal support of up to $200 million per year to each institute.

Federation of American Scientists (July 2009)
"34 U.S. Nobel Laureates Urge Inclusion of President Obama's $150 Billion Clean Energy Technology Fund in Climate Legislation"
A group of 34 U.S. Nobel Laureates joined together to call on President Obama and Congress to include $150 billion in funding for clean energy R&D through a Clean Energy Technology Fund in any climate legislation approved by Congress. "This stable R&D spending is not a luxury," the distinguished group of scientists and researchers added. "t is in fact necessary because rapid scientific and technical progress is crucial" to achieving U.S. climate and energy policy objectives, and to doing so at an affordable cost. The Nobel Laureates noted that President Obama has proposed to use proceeds from federal cap-and-trade legislation to fund a $15 billion per year investment in clean energy R&D over ten years, and noted that the much smaller clean energy R&D investments in the House-passed American Clean Energy and Security Act constituted "a dangerous omission."

The Climate Group and the Office of Tony Blair (July 2009)
Breaking the Climate Deadlock - Technology for a Low Carbon Future
"[N]ew technologies - many available but not yet commercially proven - will be needed" to achieve long-term climate and energy transformation objectives, this report argues, calling for much greater clean energy R&D investments to develop "future options, such as carbon capture and storage (CCS), new generation nuclear, concentrated solar power (CSP) and electric vehicles, and the infrastructure, such as smart grids, necessary for them to operate at scale." The world's developed nations should "agree to at least double public research, development, and demonstration (RD&D) for low-carbon technologies by 2015 and quadruple it by 2020," the report advocates; the U.S. share of this commitment would amount to investing over $10 billion per year by 2015 and more than $20 billion annually by 2020. These near-term investments in clean energy R&D are particularly important to control the costs of decarbonizing the world's economy in coming decades, the report says, noting that "without CCS technology, for example, the cost of decarbonization will be over 70% higher in 2050." The report argues that market failures prevent the private sector from properly investing in clean energy R&D and that a carbon price "alone is not enough," calling for "the implementation of practical and collaborative technology policies both nationally and internationally."

Center for American Progress and Global Climate Network (July 2009)
Breaking Through on Technology - Overcoming the barriers to the development and wide deployment of low-carbon technology
Focusing primarily on upcoming UN climate change negotiations, this report argues current "low-carbon policies are woefully inadequate" throughout the world and calls for an "urgent boost to R&D initiatives." Citing responses from more than 100 experts from government, private firms, academic institutes and non-government organizations in eight countries - Australia, Brazil, China, Germany, India, Nigeria, South Africa and the United States - the report argues that "the absence of a long-term low-carbon policy framework or coherent set of policies appears to be a major impediment to the development and deployment of low-carbon technologies." In all eight nations, interviewees supported strong "government intervention to address technology barriers and most felt that domestic low-carbon strategy with strong political support ... was essential" to meet energy, climate and economic objectives.

Copenhagen Consensus on Climate (August 2009)
An Analysis of a Technology-led Climate Policy as a Response to Climate Change
This new research paper argues that a technology-focused approach to climate policy is both a necessary and effective means of tackling climate change and building a low-carbon global energy system. Substantially reducing global greenhouse gas emissions and halting climate change will "require a technological revolution," the report argues, and "the magnitude of the technology challenge is huge." The policy response to climate change should therefore put "the up-front emphasis on energy R&D, infrastructure, and deployment of ready technologies," the report argues, calling this response "intuitively sensible and workable." A relatively low carbon price of $5 per ton could raise the $30 billion in annual clean energy technology investment necessary in the United States, the report says, with a global fee raising significantly more funding for clean energy research and development worldwide.

Congressional and Administration Proposals

In addition to the broad consensus among clean energy innovation experts, the Obama Administration and the U.S. Congress have advanced several proposals for new energy innovation institutions and programs including:

Department of Energy, Advanced Research Projects Agency for Energy (ARPA-e)
Initially authorized by the 2007 American COMPETES Act, ARPA-e was first funded by the American Recovery and Reinvestment Act in 2009 and is in the process of selecting the first recipients of grants for potentially transformational clean energy RD&D projects. Modeled after the successful Defense Advanced Research Projects Agency (DARPA), responsible for a number of breakthrough inventions including the Internet and GPS, ARPA-e shares a similarly lean bureaucratic structure, does not perform any in-house R&D and "will uniquely focus on high risk, high payoff" applied R&D and demonstration projects, providing grants ranging from $500,000 to $10 million, typically over a three-year period, to seed the development of "technologies promising true energy transformations." ARPA-e received $400 million in funding through ARRA and just $15 million in funding in FY2009 appropriations, with only $10 million requested in the DOE's FY2010 budget request. The House American Clean Energy and Security Act would dedicate one percent of cap and trade revenues to fund ARPA-e, equivalent to $772 million per year at an average CO2 allowance price of $15 per ton.

Department of Energy, Energy Frontier Research Centers
Supported through both American Recovery and Reinvestment Act funds ($277 million) and the FY2009 Department of Energy Budget ($100 million), an April 2009 DOE announcement pledged $377 million in five-year grants to establish 46 new Energy Frontier Research Centers at universities, national laboratories, nonprofit organizations and private firms across the country. Each center will receive $2-5 million in annual funding to focus on basic science research challenges that expand the frontiers of knowledge in areas critical to transformational clean energy innovation, part of "an effort to lay the groundwork for fundamental advances in solar energy, biofuels, transportation, energy efficiency, electricity storage and transmission, clean coal and carbon capture and sequestration, and nuclear energy."

Department of Energy, Energy Innovation Hubs
In their FY2010 budget request to Congress, Secretary of Energy Steven Chu and the Obama Administration proposed the establishment of eight Energy Innovation Hubs, "multi-disciplinary, highly collaborative teams ideally working under one roof to solve priority technology challenges." Described as "little 'Bell Lablets'" the Hubs would pursue the energy "breakthroughs we need," said Secretary Chu. Secretary Chu and the Obama Administration requested $280 million in the FY2010 budget to establish eight Energy Innovation Hubs within the DOE Office of Science and each of the applied energy research offices (EERE, Fossil, Nuclear, etc.) to perform work that "will span from basic research to engineering development to commercialization and a hand off to industry." Much smaller than the Energy Discovery-Innovation Institutes envisioned by the Brookings Institution or the National Institutes of Energy centers called for by Breakthrough and Third Way, these hubs would be funded at just $25 million per year, with $10 million in additional funding in the first year to cover set up costs. The FY2010 House Energy and Water Appropriations Bill provided $35 million in funding for just one Energy Innovation Hub and the Senate Energy and Water Bill funded just one hub as well, while authorizing transfer of stimulus funds to establish up to two other hubs.

American Clean Energy and Security Act, Clean Energy Innovation Centers
The House-passed American Clean Energy and Security Act provides funding for the establishment of regional Clean Energy Innovation Centers similar to the Energy Innovation Hubs proposed by Secretary Chu. Just 0.5% of the bill's cap and trade revenue, or $331 million at an average CO2 price of $15 per ton, would be dedicated to establish eight energy research centers, competitively selected by the Secterary of Energy. Funding would be awarded to "consortiums consisting of research universities, private research entities, industry, and relevant state institutions," and each energy innovation center would have a unique technology focus to which at least 40% of support would be directed."