Developing and deploying affordable, high-performance clean energy technologies are one of the great challenges of our time. It’s central to reducing global greenhouse gas emissions, improving the U.S. balance of trade, and bolstering national security. And yet over the last 40 years, U.S. energy policy has been marked by government underinvestment in R&D and prolonged policy debates on what would have ultimately proved to be ineffective carbon pricing schemes. And the recent temporary spike in clean energy investment through the Stimulus was focused too much on deploying uncompetitive existing generations of technologies instead of working to develop better transformative technologies.
But implementing new clean energy policy has never felt so far from reality. Political gridlock is fueled in part by high-profile bankruptcies of government-supported clean energy firms that weren’t ready for prime-time and/or were undercut by Chinese green mercantilist policies. Many on the left have doubled down on their “green jobs” narrative by supporting the renewal of subsidies for low-risk uncompetitive technologies. Many also remain steadfast in support for carbon caps, although some grudgingly have accepted carbon pricing as a secondbest solution. Meanwhile, many on the right insist the private sector will develop cheap energy technologies and that government intervention, with perhaps the exception of a modest, revenue neutral carbon tax, is doomed for failure.
The next administration needs to put aside these obsolete assumptions and recognize that transformative, next-generation clean energy innovation is not going to arise from a price on carbon, subsidizing what are essentially today’s clean energy “Edsels,” or even the profit motive of an expected $2 trillion-dollar a year global clean energy market. Instead, developing the needed clean energy breakthroughs requires a national strategy, with significant public investments in R&D and cohesive policies to unleash private sector innovation.