President Obama’s exclusion of “climate change” from the State of the Union, combined with Carol Browner’s exit as the administration’s top climate advisor, has sparked wide debate across the climate movement. On one hand, many climate advocates are backing the president’s strategy. As Senator Barbara Boxer (D-Calif.) put it, “He’s trying to unify … I think it was very smart of him.”

On the other hand, climate advocates like Joe Romm of Climate Progress and David Roberts of Grist are criticizing the president for not using climate change as a central justification for his clean energy proposals. Unfortunately, even after the collapse of cap-and-trade legislation, Roberts and other critics continue to follow a type of policy literalism [PDF] that has undermined environmentalists and climate advocates for years.

The argument goes something like this. First, Roberts claims that without climate change as the central justification, the case for federal investment in the clean energy industry “is no stronger than the argument for supporting pharmaceuticals, or telecom, or any other industry that’s likely to be big in the 21st century.” (Roberts wrote partly in response to Norris’ article on the rise of “innovation hawks.”)

However, as the American Energy Innovation Council and the President’s Council of Advisors on Science and Technologyrecently explained in their reports, other industries like pharmaceuticals, aerospace, and computer electronics spend far more on research and development than the energy industry, due to a variety of market and non-market barriers. The underinvestment is dramatic: Whereas pharmaceuticals invest about 18.7 percent of sales in R&D, the U.S. energy industry only invests 0.3 percent. The federal government already invests over $30 billion annually in health research, and $80 billion on military R&D, but only $3-5 billion in energy R&D.

Moreover, the current economic challenge from China and other “rising tigers” in clean-tech is clearer than any other industry, and it remains one of the most powerful motivating factors for the U.S. public and policymakers alike (analysts predict the global clean-tech market could surpass $600 billion by 2020). The importance of clean energy technology for the Department of Defense, and for saving the lives of American troops, is creating a new imperative in the defense community. Rising oil prices and instability in the Middle East are simultaneously strengthening the energy security consensus to reduce U.S. reliance on oil. And disasters like Deepwater Horizon and Massey Energy continue to highlight the public health and environmental benefits of reduced fossil fuel consumption.

So much for the argument that only climate change can seriously justify major federal investment in clean energy technology over other industries. The case for expanding these investments for economic competitiveness, national security, and public health reasons is stronger than ever before. (And beyond domestic concerns, cheaper forms of clean energy can help alleviate the poverty of billions who lack electricity access and already suffer from the vagaries of the climate.)

The second reason Roberts criticizes President Obama is that he believes “The only way that well-worn partisan division can be transcended is through reference to climate change.” In another reaction to Obama’s decision, Roberts asserts that “telling the truth about climate change is also good politics.”

Could it be true that only climate change can transcend partisan divisions? Was the president wrong to appeal to a broader set of public interests to advance clean energy RD&D investment and a portfolio standard? Let’s revisit the latest public opinion analysis. In a recent report titled “Little Change in Opinions about Global Warming: Increasing Partisan Divide on Energy Policies,” the Pew Research Center concluded:

Views about climate change continue to be sharply divided along party lines … Among Republicans, only 38 percent agree the earth is warming and just 16 percent say warming is caused by humans … Just 14 percent of Republicans say global warming is a very serious problem and 27 percent view it as a somewhat serious problem; only about a quarter (24 percent) think it requires immediate action by the government … Among Republican registered voters who agree with the Tea Party, fully 70 percent do not think there is solid evidence that the average temperature on earth is warming.

No wonder Republican strategists have successfully used climate change as a wedge issue to rally their base and tarnish Democrats. Even with cap-and-trade gone, the Republican leadership sees opposition to EPA greenhouse gas emissions authority as a major linchpin of its 2012 election strategy.

How could Roberts and others possibly get the idea that focusing on climate change is good politics in this environment? Contrary to their assertions, a focus on climate change would only serve to undermine the possibility of clean energy reform, fueling an ever-greater climate war and potentially contributing to another major Democratic defeat in 2012.

Based on this data, the recent collapse of cap-and-trade, and the current state of climate change politics, we conclude that the president’s choice made sense. Although climate change remains extremely divisive, Gallup and Pew polling continues to indicate that federal investment in clean energy technology remains one of the most popular forms of energy policy. These investments will drive down the price of low-carbon energy and pave the way for stronger deployment efforts — perhaps even including a strong carbon price at some point — both here and in the developing world, where the vast majority of future emissions will originate.

The question is not whether climate change is an important reason for action on clean energy. That is obvious. The question is what type of political and policy strategy can successfully expand the national clean energy consensus and begin shifting us in the right direction. In this context, the role of effective leaders is not just to “speak truth to power,” but to bridge our divides to achieve the outcomes we need.

We can agree to disagree on the role of climate and focus on policy achievements in the
near and medium term. Climate change will eventually get its moment in American politics. Until then, Obama and his administration have outlined a new approach, and climate advocates would be wise to get behind it.

Teryn Norris is president and Daniel Goldfarb is program director at Americans for Energy Leadership.

President Obama’s exclusion of “climate change” from the State of the Union, combined with Carol Browner’s exit as the administration’s top climate advisor, has sparked wide debate across the climate movement. On one hand, many climate advocates are backing the president’s strategy. As Senator Barbara Boxer (D-Calif.) put it, “He’s trying to unify … I think it was very smart of him.”

On the other hand, climate advocates like Joe Romm of Climate Progress and David Roberts of Grist are criticizing the president for not using climate change as a central justification for his clean energy proposals. Unfortunately, even after the collapse of cap-and-trade legislation, Roberts and other critics continue to follow a type of policy literalism [PDF] that has undermined environmentalists and climate advocates for years.

The argument goes something like this. First, Roberts claims that without climate change as the central justification, the case for federal investment in the clean energy industry “is no stronger than the argument for supporting pharmaceuticals, or telecom, or any other industry that’s likely to be big in the 21st century.” (Roberts wrote partly in response to Norris’ article on the rise of “innovation hawks.”)

However, as the American Energy Innovation Council and the President’s Council of Advisors on Science and Technologyrecently explained in their reports, other industries like pharmaceuticals, aerospace, and computer electronics spend far more on research and development than the energy industry, due to a variety of market and non-market barriers. The underinvestment is dramatic: Whereas pharmaceuticals invest about 18.7 percent of sales in R&D, the U.S. energy industry only invests 0.3 percent. The federal government already invests over $30 billion annually in health research, and $80 billion on military R&D, but only $3-5 billion in energy R&D.

Moreover, the current economic challenge from China and other “rising tigers” in clean-tech is clearer than any other industry, and it remains one of the most powerful motivating factors for the U.S. public and policymakers alike (analysts predict the global clean-tech market could surpass $600 billion by 2020). The importance of clean energy technology for the Department of Defense, and for saving the lives of American troops, is creating a new imperative in the defense community. Rising oil prices and instability in the Middle East are simultaneously strengthening the energy security consensus to reduce U.S. reliance on oil. And disasters like Deepwater Horizon and Massey Energy continue to highlight the public health and environmental benefits of reduced fossil fuel consumption.

So much for the argument that only climate change can seriously justify major federal investment in clean energy technology over other industries. The case for expanding these investments for economic competitiveness, national security, and public health reasons is stronger than ever before. (And beyond domestic concerns, cheaper forms of clean energy can help alleviate the poverty of billions who lack electricity access and already suffer from the vagaries of the climate.)

The second reason Roberts criticizes President Obama is that he believes “The only way that well-worn partisan division can be transcended is through reference to climate change.” In another reaction to Obama’s decision, Roberts asserts that “telling the truth about climate change is also good politics.”

Could it be true that only climate change can transcend partisan divisions? Was the president wrong to appeal to a broader set of public interests to advance clean energy RD&D investment and a portfolio standard? Let’s revisit the latest public opinion analysis. In a recent report titled “Little Change in Opinions about Global Warming: Increasing Partisan Divide on Energy Policies,” the Pew Research Center concluded:

Views about climate change continue to be sharply divided along party lines … Among Republicans, only 38 percent agree the earth is warming and just 16 percent say warming is caused by humans … Just 14 percent of Republicans say global warming is a very serious problem and 27 percent view it as a somewhat serious problem; only about a quarter (24 percent) think it requires immediate action by the government … Among Republican registered voters who agree with the Tea Party, fully 70 percent do not think there is solid evidence that the average temperature on earth is warming.

No wonder Republican strategists have successfully used climate change as a wedge issue to rally their base and tarnish Democrats. Even with cap-and-trade gone, the Republican leadership sees opposition to EPA greenhouse gas emissions authority as a major linchpin of its 2012 election strategy.

How could Roberts and others possibly get the idea that focusing on climate change is good politics in this environment? Contrary to their assertions, a focus on climate change would only serve to undermine the possibility of clean energy reform, fueling an ever-greater climate war and potentially contributing to another major Democratic defeat in 2012.

Based on this data, the recent collapse of cap-and-trade, and the current state of climate change politics, we conclude that the president’s choice made sense. Although climate change remains extremely divisive, Gallup and Pew polling continues to indicate that federal investment in clean energy technology remains one of the most popular forms of energy policy. These investments will drive down the price of low-carbon energy and pave the way for stronger deployment efforts — perhaps even including a strong carbon price at some point — both here and in the developing world, where the vast majority of future emissions will originate.

The question is not whether climate change is an important reason for action on clean energy. That is obvious. The question is what type of political and policy strategy can successfully expand the national clean energy consensus and begin shifting us in the right direction. In this context, the role of effective leaders is not just to “speak truth to power,” but to bridge our divides to achieve the outcomes we need.

We can agree to disagree on the role of climate and focus on policy achievements in the near and medium term. Climate change will eventually get its moment in American politics. Until then, Obama and his administration have outlined a new approach, and climate advocates would be wise to get behind it.

Teryn Norris is president and Daniel Goldfarb is program director at Americans for Energy Leadership.

This agenda has collapsed. In the aftermath of the Copenhagen climate negotiations and recent developments in the Senate, it is clear that carbon caps in the U.S. and globally will not happen for the foreseeable future. Meanwhile, the IEA projects global CO2 emissions will skyrocket 40% above 2007 levels by 2030, and the EIA predicts China’s emissions will more than double over the next 25 years – which would make its emissions greater than the rest of the world combined.

What happens next? The upcoming lame-duck session in Congress could be one of the last opportunities for national reform before 2013. There are a number of incremental proposals worth pushing, from the American Clean Energy Leadership Act, to Senator Alexander and Senator Dorgan’s Electric Vehicle Deployment Act, to Senator Kerry’s latest Clean Energy Technology Leadership Act. Some still hope for a Hail Mary lame-duck pass on cap and trade, but when asked whether it could be revived, Senator Reid recently said, “It doesn’t appear so at this stage. It doesn’t have the traction that a lot of us wish it had.”

But none of these alternative proposals contain one of the most critical elements for reform: a dedicated revenue stream to fund major federal investment in clean energy research, development, demonstration, deployment, and manufacturing, as well as infrastructure and workforce development. The American Energy Innovation Council, including business titans like Bill Gates and John Doerr, has called for an increase of $11 billion per year in federal clean energy RD&D alone – an idea that could attract serious bipartisan support after mid-term elections. This proposal enjoys broad support from groups like Breakthrough Institute, Brookings Institution, Third Way, ITIF, and many others.

These investments are critical for ensuring the clean energy accomplishments of ARRA aren’t imperiled as public investment falls off a cliff. They’re also critical for establishing U.S. competitiveness and driving down the price of clean energy technologies through innovation. If the price gap between dirty and clean energy technology isn’t bridged quickly, the world has little chance of avoiding climate destabilization as countries like China and India develop at break-neck speed.

Cap and trade could have originally provided this revenue stream, but now that it’s off the table, we must find an alternative. Potential sources include reduced fossil fuel subsidies, offshore drilling royalties, an oil import fee, a small fee on fossil fuel electricity, or even a low carbon tax beginning at $5 per ton. Another source outside the energy sector could be a small fee on financial transactions. This idea has been proposed as a way to fund the $100 billion international climate assistance package, and could be applied domestically to reduce speculative trading and support a new growth industry.

Meanwhile, the possibility of achieving a binding global emissions treaty at the upcoming UN climate negotiations in Cancun is all but gone. The new chairwoman of the United Nations climate treaty body recently put it this way: “I do not believe we will ever have a final agreement on climate change, certainly not in my lifetime.” We must therefore put more emphasis on alternative forums like the Clean Energy Ministerial and Major Economies Forum on Energy & Climate. Instead of endlessly debating emissions targets and timetables, the world’s technology policy leaders can break the logjam by identifying specific technical hurdles, creating coordinated technology roadmaps, and mobilizing the resources for rapid implementation.

Beyond the immediate future, climate and clean energy advocates should take the opportunity to fundamentally rethink our strategy. Will we abandon the prospect of major federal reform, or develop a stronger approach for the next Congress? And will we continue focusing on carbon caps, or will we adopt a new approach focused on technological innovation to make clean energy cheaper? These are just some of the questions that will define the next agenda – and our energy and climate future.

Meanwhile, as Breakthrough Institute and ITIF documented in “Rising Tigers, Sleeping Giant,” China and other nations are establishing dominance in one of the largest growth industries of the century. According to World Economic Forum, the global clean energy market will reach $450 billion annually by 2012 and $600 billion by 2020. Full market potential for clean energy products is much larger, with one analysis estimating Chinese market potential alone at $500 billion to $1 trillion. No wonder President Obama declared in the State of the Union, “The nation that leads the clean-energy economy will be the nation that leads the global economy.”

The United States must quickly pursue a new growth agenda, and clean energy technology offers one of our greatest opportunities. For over a decade, the primary goal of U.S. climate and clean energy advocates has been to establish a strong carbon pollution cap. This agenda is dead for the foreseeable future, and precious time has been wasted. The United States must quickly pivot from pollution regulation to an aggressive clean energy competitiveness and innovation agenda, and we can begin with new leadership in the next Congress.

Securing our competitiveness in this sector requires a comprehensive industrial development strategy (see our report, “The Power to Compete“), including robust and targeted federal support for clean energy research and innovation, manufacturing, and domestic market demand, as well as infrastructure, education, and industry cluster formation. This is necessary for a range of technologies, including but not limited to onshore and offshore wind, solar PV and thermal, advanced geothermal, hybrid and electric vehicles and batteries, carbon capture and storage, nuclear, smart-grid, and high-speed rail.

Fortunately, this approach includes several incremental, actionable components that can garner greater support than comprehensive and controversial cap and trade. The first is research, development, and demonstration (RD&D), which is necessary to invent new clean energy technologies, components, and manufacturing processes; improve the cost and performance of existing technologies and processes; and demonstrate proof of concept for advanced and higher-risk systems. The next Congress can start by increasing federal clean energy RD&D to at least $15-20 billion per year and making the R&D tax credit permanent. This target represents a growing bipartisan consensus and contrasts with the $30 billion federal budget for health research and $80 billion for military R&D, and only $3-5 billion for energy R&D today.

These strategic federal investments, and those identified below, can be financed through a variety of modest revenue streams, such as offshore drilling royalties, an oil import fee, reduced fossil fuel subsidies, or a small fee on fossil fuel electricity. For example, an “energy security fee” of $3.50 per barrel of imported oil would raise approximately $15 billion annually; reduced fossil fuel subsidies as proposed by the administration could generate upwards of $35 billion over ten years; a utilities electricity fee could raise at least $2 billion annually, as included in the Kerry-Lieberman American Power Act; and royalties on new offshore continental shelf drilling could raise more than $100 billion over twenty years.

The second piece is clean energy manufacturing, which can be a powerful engine for middle-class jobs and wealth creation and is essential for scaling our industry, establishing long-lasting supply chains and clusters, and reducing our trade deficit. The federal government can accomplish this through low-cost financing, tax incentives, technical assistance, and direct investment. Congress can start by extending the 48C advanced manufacturing tax credit, creating a revolving manufacturing loan fund similar to the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act, and leveraging the Department of Commerce’s Manufacturing Extension Partnership.

Third, strong domestic demand will attract leading companies to locate manufacturing, supply chain, and R&D operations at home; accelerate learning-by-doing to achieve improvements in price and performance, as well as manufacturing processes; and incentivize U.S. firms to invest in clean energy technology development and deployment. Even without a carbon price, we can stimulate demand for advanced technologies with direct government procurement, especially through the Department of Defense, and through a clean energy deployment administration, renewable portfolio standard, and targeted feed-in tariffs. Unlike a carbon price, these policies can be designed to favor less-mature technologies and achieve rapid learning curves and economies of scale.

Beyond these three core components, at least three other supportive mechanisms are necessary: enabling infrastructure, education and workforce development, and industry cluster formation. For infrastructure, developing a smart electricity grid is necessary to integrate and manage renewable power; electrical vehicle infrastructure, such as charging stations, is necessary to electrify transportation; and rapid mass transit like high-speed railways is necessary to improve transportation efficiency and reduce reliance on personal vehicles.

Education and workforce development is necessary to replace the currently declining energy workforce, which could experience up to 50 percent retirement rates in the next five or ten years, and to accelerate clean energy research and construction. The next Congress can act by fully appropriating the Department of Energy’s applied science and engineering education proposal, and build upon this with a National Energy Education Act. Finally, explicit policies to develop regional industry clusters is necessary to accelerate clean energy innovation, from basic research to technology commercialization, and to enhance the competitiveness of U.S. manufacturers and suppliers.

The United States has a successful track record of catching up in strategic industries. Decades ago, after trailing Europe in aviation and aerospace, we raced ahead through sustained federal support for aviation technology development. After Sputnik was launched, we
invested heavily in education, science, and technology, leading us to win the space race. When Japan took the lead in the semiconductor industry, we formed SEMATECH to reposition ourselves as the global market leader. We can and must do the same today in clean energy, and in the aftermath of cap and trade, there’s not a moment to waste.

–
Teryn Norris is president and Daniel Goldfarb is program director of Americans for Energy Leadership. This article originally appeared at the National Journal Energy Expert Blog.

When President Obama and key Senate leaders meet today to reach a compromise on energy and climate legislation, they should strongly consider increasing federal investment in clean energy technology to at least $15 billion annually. This is a comprehensive third-way strategy to improve U.S. energy independence, economic competitiveness, and climate security, and it deserves bipartisan support.

We are a Democrat and Republican. One of us campaigned for Barack Obama in 2008, the other was a delegate for John McCain. One of us worked on energy and climate policy for the progressive Breakthrough Institute, while the other worked on similar issues for the conservative American Enterprise Institute. We disagree on a wide range of issues, and we hold different economic philosophies.

Despite our differences, we are strongly united behind a serious federal agenda for clean energy innovation. Regardless of the future of cap-and-trade, robust federal investment in clean energy technology can effectively tackle both energy and climate policy reform. In addition to reducing our oil addiction, it can help build new export-oriented and manufacturing-intensive industries, seize global market share, drive down the price of clean energy technologies, and accelerate the transition to a cleaner, low-carbon economy.

When the United States aims to overcome a challenge — be it defeating fascism, leading the space race, or winning the Cold War — we make a national commitment and invest the necessary resources. The federal government invests $30 billion per year in health R&D through the National Institutes of Health, and $80 billion per year in military R&D. Energy currently receives $3-5 billion — less than our national expenditure on potato chips.

Unfortunately, current Senate proposals such as Kerry-Lieberman fall far too short by only investing $2-4 billion per year, and a utility-only cap would reserve even less. As Mark Muro of Brookings Institution writes in the National Journal, “The trouble with the new utility-only approach to emissions reductions, however, is that none of its proponents are saying anything that makes it seem likely that an adequate slice of the potential revenue the narrower system might generate will be reserved for technology innovation.”

After decades of energy stalemate, in the midst of yet another oil crisis, it is time to make a real national commitment to technology innovation and secure America’s energy leadership once and for all. A new target of at least $15-20 billion per year represents a national “energy innovation consensus” supported by a large and growing number of prominent U.S. business leaders, think tanks, university associations, and dozens of Nobel Laureates.

The American Energy Innovation Council (AEIC) is the latest group to support this approach. Led by business titans Bill Gates and Jeff Immelt, and backed by the Bipartisan Policy Center, the organization is calling for $16 billion annually in federal investment. “Underfunding RD&D is an exercise in gross fiscal irresponsibility,” they wrote. “The country sends $1 billion overseas every day to purchase oil, but publicly funded research in advanced vehicles and alternative fuels totals just $680 million annually – about 16 hours worth of oil imports.”

Federal investment in energy technology can also be a political winner for Congressional Democrats, Republicans, and the White House alike. Even before the Gulf oil spill, a poll by Pew Research in March found that 78% of the public favors increased government funding for research into clean energy technologies. When compared to alternatives such as carbon pricing, technology investment fairs as the most popular energy policy proposal.

For Democratic leaders, this strategy would allow them to meet general public demand for reform while still satisfying their environmental base with a major achievement on clean energy. It would allow Republicans to offer a serious, pro-business alternative to cap and trade and “drill baby drill” that would boost the economy. And it would allow the White House to declare victory on President Obama’s original campaign promise to invest $15 billion per year in this sector.

Of course, Republicans tend to shy away from any proposal to increase government spending, but clean energy is a strategic national resource with too much risk for the private sector to bear alone. Republicans should also remember the strong conservative precedent for these types of public investment. President Eisenhower oversaw the initial science R&D surge after Sputnik and the construction of interstate highways. President Reagan made enormous investments in military technology to maintain U.S. competitiveness.

More recently, it was Newt Gingrich who in 2008 called for the National Science Foundation’s budget to triple from $6 to 18 billion to foster green technologies. Last year, Senator Lamar Alexander (R-TN) introduced the Clean Energy Act of 2009, which would invest $750 million annually for ten years in clean energy RD&D and provide $100 billion in clean energy loan guarantees. And Senator Richard Lugar’s Practical Energy and Climate Plan of 2010 would similarly offer $36 billion in loans for nuclear power plants.

Without cap and trade, the government will need an alternative revenue stream. The AEIC proposes several possibilities worth debate, such as a wires fee on electricity, reduced fossil fuel subsidies, fees on offshore oil and natural gas production, an oil import fee, or increasing the gas tax. Regardless, their report notes, “The essential requirements, though, are that we make the basic investment, and that we commit these funds, steadily, over the long term.”

The moment is urgent. As this week’s Time magazine cover story states, “Clean power could be to the 21st century what aeronautics and the computer were to the 20th, but the U.S. is already falling behind. China, South Korea and Japan are set to invest more than $500 billion combined in clean technology over the next five years, while the U.S. is likely to invest less than $200 billion, and that’s assuming [current] clean-energy legislation makes it into law.”

Federal investment in energy innovation is in line with America’s great tradition of technological achievement, and it can finally tackle our fossil fuel addition, accelerate the transition to energy independence, and boost our economic competitiveness, all in one bold step. This is a bipartisan strategy for energy leadership, and it deserves the support of Democrats, Republicans, and Independents alike.

–
Teryn Norris is Director of Americans for Energy
Leadership and Senior Advisor at the Breakthrough Institute. Clifton Yin recently worked for the American Enterprise Institute and is a Policy Fellow at Americans for Energy Leadership.

Instead of using last night’s prime-time opportunity to push cap-and-trade in the form of the Kerry-Lieberman American Power Act — as many climate advocates saw as their last hope for “comprehensive” climate reform — President Obama pressed the reset button on energy and climate policy, saying he was “happy to look at other ideas and approaches from either party, as long they seriously tackle our addiction to fossil fuels.” He made no mention of setting a price on carbon or establishing an emissions cap-and-trade system.

As Andrew Revkin observed at the New York Times Dot Earth, the president “signaled that he is leaving open a variety of paths on energy and climate policy and no longer hewing tightly to the idea of a cap-and-trade system for restricting heat-trapping emissions — which he never wavered from during his campaign.” David Roberts of Grist, one of the few remaining hopefuls for cap-and-trade reform, wrote “Final thought: Obama didn’t drive the carbon cap tonight, so there won’t be a carbon cap in the energy bill this year.”

Several key Democratic Senators have reached a similar conclusion. “I doubt very much whether those 60 votes exist right now,” said Senator Byron Dorgan (D-ND) yesterday on C-SPAN, referring to the 60 votes necessary for cap and trade in the Senate. “The climate bill isn’t going to stop the oil leak,” said Senator Dianne Feinstein (D-CA), asserting that “The first thing you have to do is stop the oil leak.” Echoing these sentiments, Senator Jay Rockefeller (D-WV) stated, “There’s not a great call for it in the Democratic caucus,” and Senator Ben Nelson (D-NE) called climate legislation “unrelated” to the Gulf spill.

If cap-and-trade is dead, then what’s next? The only serious alternative that could attract bipartisan support is a comprehensive national strategy for clean energy competitiveness and innovation — including substantial new federal investment in research, development, demonstration, deployment, and manufacturing — to accelerate America’s transition away from fossil fuels, build a strong and competitive clean energy industry, and rapidly drive down the price of low-carbon power and transportation technologies. These investments could potentially be included as part of a comprehensive energy package, building upon the proposed American Clean Energy Leadership Act.

Cap-and-trade has long dominated the debate, but a large number of think tanks, business leaders, and academics are rallying behind such an “energy innovation consensus,” which places these federal investments at the front and center of the energy and climate agenda. President Obama cited these experts in his speech, noting that “Others wonder why the energy industry only spends a fraction of what the high-tech industry does on research and development — and want to rapidly boost our investments in such research and development.”

The energy innovation consensus currently includes dozens of Nobel Laureates, Breakthrough Institute, Brookings Institution, National Commission on Energy Policy, Third Way, Association of American Universities, Clean Air Task Force, Information Technology & Innovation Foundation, Google, and Americans for Energy Leadership, among others. The latest group to join is the American Energy Innovation Council (AEIC), made up of several of the nation’s top business leaders: Bill Gates, Jeff Immelt, John Doerr, Chad Holliday, Norm Augustine, Ursula Burns, and Tim Solso. Last week, these leaders released a new report, “A Business Plan for America’s Energy Future,” calling for major new federal investment in clean energy technology RD&D — at least $16 billion annually, more than triple the current level (see our news roundup).

In fact, such an energy innovation strategy was originally at the center of the Obama administration’s energy and climate agenda. Throughout his campaign and the beginning of his presidency, Obama consistently promised he would increase federal investment in clean energy R&D by $15 billion per year. As one of the administration’s “Guiding Principles” on energy and environment, the White House website still states that it will “Invest $150 billion over ten years in energy research and development to transition to a clean energy economy.” Time Magazine‘s Bryan Walsh wrote in response to the speech, “if Obama is really serious about changing some of the insane parts of our energy policy — like the fact that we spend less than $5 billion on energy R&D a year, a number that Bill Gates wants to triple — he could be truly revolutionary.”

Of course, cap-and-trade once offered an opportunity to fund an energy innovation agenda. However, as the Breakthrough Institute and Americans for Energy Leadership recently documented in our policy brief, “The Power to Compete,” the Kerry-Lieberman American Power Act does not contain a comprehensive innovation strategy and would only increase federal clean energy RD&D investment by as little as $2.2 billion per year. The Waxman-Markey American Clean Energy & Security Act contained similarly low support for innovation. These proposals focused on capping carbon, not promoting clean energy technology innovation.

Without cap-and-trade, the federal government will need to identify an alternative revenue stream. The AEIC proposes other possibilities, such as a wires fee on electricity, reduced fossil fuel subsidies, fees on offshore oil and natural gas production, an oil import fee, or increasing the gas tax. Regardless of the revenue stream, the report notes, “The essential requirements, though, are that we make the basic investment, and that we commit these funds, steadily, over the long term.”

Some will argue that the country can’t afford these investments. But as the AEIC also states, “underfunding RD&D is an exercise in gross fiscal irresponsibility. The oil embargoes of the 1970s caused recessions that cost this nation more than a trillion dollars — yet we invest tiny sums in reducing petroleum dependence. The country sends $1 billion overseas every day to purchase oil, but publicly funded research in advanced vehicles and alternative fuels totals just $680 million annually — about 16 hours worth of oil imports … We will not save money by starving ourselves of future options.” Moreover, if the United States fails to make these investments today, the vast majority of future tax revenues, jobs, and exports associated with the growing clean energy industry will accrue to foreign nations like China, as we documented in “Rising Tigers, Sleeping Giant.”

Last night President Obama declared, “Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.” Indeed, solving the nation and world’s energy problems is most centrally an innovation challenge, one that requires a bold new policy approach. The president has signaled the need for a new agenda, and comprehensive energy innovation reform offers the best opportunity.

“The United States is rapidly falling behind in the burgeoning clean energy industry – especially in comparison to China – and our educational system and workforce is not prepared to compete,” declared the 107 presidents, including dozens of the country’s top universities. “American students are ready and willing to rise to this national challenge, and we need the federal government to support our education and training.”

The letter, organized by Americans for Energy Leadership and the Associated Students of Stanford University, calls on Congress to support the RE-ENERGYSE (“Regaining our Energy Science & Engineering Edge”) proposal, which would invest tens of millions of dollars annually in energy science and engineering education programs at universities, technical and community colleges, and K-12 schools. It was originally proposed by President Obama in April 2009 and is currently under consideration in Congress as part of the Department of Energy’s 2011 budget request.

“RE-ENERGYSE represents the nation’s first comprehensive federal program to support clean energy education programs and train thousands of new energy scientists and engineers,” wrote the presidents. “We believe it is a critical step toward creating new energy industries and jobs while regaining American leadership in the global clean energy industry, which promises to be one of the largest new growth sectors.” RE-ENERGYSE was rejected by Congress last year, despite support from dozens of universities and professional associations.

Teryn Norris, Director of Americans for Energy Leadership, said the letter represents an overwhelming demonstration of support from the country’s young leaders. “The next generation of American leaders has delivered a unified message, and members of Congress should listen: the United States is failing to compete in a critical industry, and catching up requires a national strategy for advanced energy education.” Norris pointed to the report he recently co-authored with the Breakthrough Institute and Information Technology and Innovation Foundation, “Rising Tigers, Sleeping Giant,” as documenting the challenges facing the U.S. clean energy sector.

“Federal investment in advanced energy education, including RE-ENERGYSE, will more than pay for itself,” said David Gobaud, President of the Associated Students of Stanford University for the 2009-2010 academic year. “These are long-term investments in our future. Higher education is a foundation for competitiveness and growth, and the clean-tech industry is one of our generation’s greatest opportunities. We can lead this industry by investing in the next generation of clean energy innovators, and Congress must take action.”

The letter observed that the government has started to address the need for “green-collar” technician training, such as jobs related to building retrofits and renewable energy installation, but the government “has not implemented a higher education strategy to keep the U.S. at the leading edge of energy science, technology, and entrepreneurship.” A recent report by IEEE on the energy workforce concluded, “We need more electrical engineers to solve industry challenges, and … to keep the nation’s electric power reliable, secure, safe, and competitive. Meeting these needs requires long-term investment now.”

Foreign countries are producing substantially larger portions of scientists, engineers, and researchers that will benefit their clean energy industries. According to the National Science Board, science and engineering make up only about one-third of U.S. bachelor’s degrees, compared to 63 percent in Japan, 53 percent in China, and 51 percent in Singapore. “The U.S. ranks behind other major nations in making the transitions required to educate students for emerging energy trades, research efforts, and other professions to support the future energy technology mix,” states the Department of Energy’s RE-ENERGYSE proposal.

Economic studies have found that federal investment in higher education produces a high rate of return in GDP growth and long-term tax revenue. According to a report by the U.S. Congress Joint Economic Committee, the return on investment produced by the post-war G.I. Bill totaled above 400 percent over the course of 35 years. Most economists believe that technological innovation drove the majority of U.S. economic growth in the 20th century.

“This letter and RE-ENERGYSE are only the beginning,” said Norris, also a Senior Advisor at Breakthrough Institute and public policy student at Stanford University. “We will continue working with young leaders to develop proposals to advance American energy innovation, including a national education program on par with the post-Sputnik National Defense Education Act, and an increase in the federal energy R&D budget to the level of the National Institutes of Health. We look forward to working with members of Congress in the months ahead.”

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Additional resources:

RE-ENERGYSE 2-page summary, FY2011 Proposal

President Obama Announces RE-ENERGYSE at National Academy of Sciences

“Press Release: Over 100 Groups Urge Congress to Support Obama’s Energy Education Initiative”
Breakthrough Institute, 07/22/09

“Winning the Clean Energy Race: A New Strategy for American Leadership”
Teryn Norris and Devon Swezey, The Huffington Post, Nov. 2009

“Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate Clean Energy
Race by Out-Investing the United States”
Breakthrough Institute and Information Technology & Innovation Foundation, Nov. 2009

For more information and coverage, see here:
http://leadenergy.org/reenergyse/resources/

Solar Valley City is located in Dezhou, Shandong Province, where I visited last month as part of a delegation from Stanford University, and it is unlike any city you’ve seen before.  The city houses over 100 solar enterprises including major firms like Himin Solar Energy Group Ltd, the world’s largest manufacturing base of solar thermal products, and Ecco Solar Group.  According to reports, around 800,000 people in Dezhou are employed in the solar industry, or one in three people of working age.

“China’s solar thermal industry and Himin’s complete industrial chain are examples for the rest of the world.  That  sounds brash, but it’s true,” said Himin’s CEO Huan Ming in 2009, now one of China’s richest men.  Himin specializes in solar thermal technology, producing over twice the annual sales of all solar thermal systems in the United States, and it is quickly expanding into solar photovoltaics and other technologies.

Himin’s portion of Solar Valley comprises nearly 1000 acres, where the company is currently constructing its manufacturing center, research and development center, education and training center, apartment complexes, and more.  These facilities will host the 4th International Solar Cities Congress this year and boast a giant “solar architecture” hotel.

The Chinese government has offered substantial support for the project, including preferential tax benefits and other supporting policies, although the specifics are largely unknown.  “The municipal government attaches great importance to the development of green energy,” said the County Level Inspector of Dezhou People’s Congress.

Our Stanford “China Energy Systems” class delegation visiting China’s Solar Valley City (I’m in the front row, fourth one from left)

Solar Valley City has similarities to China’s new “Electricity Valley” in the city of Baoding, which has consciously modeled itself after Silicon Valley.  The city has transformed itself from an automobile and textile town into one of the fastest growing hubs of wind and solar energy equipment in China, housing nearly 200 renewable energy companies.

Overall, this project is yet one more example of how China is moving rapidly to lead the global clean energy industry while the United States falls behind.  China is already the world’s largest manufacturer of solar panels and wind turbines, and it is poised to lead in advanced batteries, high-speed rail, hybrid and electric vehicles, nuclear, and advanced coal technology.

As my colleagues and I documented in our “Rising Tigers, Sleeping Giant” report last year, China and other Asian nations will out-invest the United States in the clean energy sector sector by over three to one over the next five years, a finding that was recently confirmed by a large Pew report, “Who’s Winning the Clean Energy Race?” As a group of ten U.S. Senators recently wrote in a letter to Senators Kerry, Graham, and Lieberman:

“We know that other countries, in particular China, have already started to vie for leadership in the new clean energy economy. China has already become the world’s leading manufacturer of wind turbines and solar panels. This is a contest that America cannot afford to lose. Our nation’s economic future depends both on our global competitiveness and access to reliable energy sources. We must not allow our nation to become dependent on foreign clean energy industries or squander the opportunity to compete successfully in the global clean energy marketplace.”

What will it take for the United States to lead the global clean energy industry?  Find out more in my article, “Winning the Clean Energy Race: A New Strategy for American Leadership,” and check out the full list of recommendations in our report.

In the aftermath of the Great Recession, the United States faces serious questions about the future of its economy and jobs market. Where will the good jobs of the future come from, how do we prepare the American workforce, and what is our strategy to maintain economic leadership in an increasingly competitive world?

A growing consensus suggests that cleantech will be one of our generation’s largest growth sectors. The global cleantech market is expected to surpass $1 trillion in value within the next few years, and a perfect storm of factors — from the inevitability of a carbon-constrained world, to skyrocketing global energy demand, to long-term oil price hikes — will drive global demand for clean-energy technologies.

That is why the national debate about global cleantech competitiveness is so important, sparked by the rapid entry of China and other nations. My colleagues and I recently contributed to the discussion with “Rising Tigers, Sleeping Giant,” a large report providing the first comprehensive analysis of competitive positions among the U.S. and key Asian challengers. In order to compete, we found, “U.S. energy policy must include large, direct, and coordinated investments in clean-technology R&D, manufacturing, deployment, and infrastructure.”

But even if the United States adopts a real industrial policy for clean energy, there is little evidence that our workforce is skilled enough to compete. Unfortunately, according to the Department of Energy, “The U.S. ranks behind other major nations in making the transitions required to educate students for emerging energy trades, research efforts and other professions to support the future energy technology mix.”

A competitive energy workforce requires much more than technicians and building retrofitters. Scientists, engineers, high-tech entrepreneurs, and advanced manufacturers will play a critical role, just as they have in strategic sectors like infotech, aerospace, and biotech. The federal government has started to address the need for green technician and efficiency retrofit training, such as with the Green Jobs Act, but it has not implemented an education strategy to keep the U.S. at the leading edge of energy science, technology, and entrepreneurship.

Unfortunately, the majority of our colleges and universities lack degree programs focused on energy, and the U.S. power engineering education system is on the decline. Over the next five years, 45 percent of electric utility engineers will be eligible for retirement, along with 40 percent of key power engineering faculty at U.S. universities, according to a report by IEEE. “Engineering workforce shortages are already occurring,” the report concludes. “We need more electrical engineers to solve industry challenges, and to build the 21st century electric power grid … Meeting these needs requires long-term investment now.”

Meanwhile, other countries are producing a substantially larger portion of scientists, engineers, and researchers that will benefit their cleantech industries. Science and engineering make up only about one-third of U.S. bachelor’s degrees, compared to 63 percent in Japan, 53 percent in China, and 51 percent in Singapore, and the number of Chinese researchers is now on par with the United States (though some have pointed out that the quality of these graduates and researchers is not always comparable). “Over time,” stated a recent report by the National Science Board, “the United States has fallen from one of the top countries in terms of its ratio of natural science and engineering degrees to the college-age population to near the bottom of the 23 countries for which data are available.”

The energy workforce deficit and STEM education gap will substantially limit the nation’s ability to lead the cleantech industry and accelerate clean energy development. As Nobel Laureate Paul Krugman put it, “If you had to explain America’s economic success with one word, that word would be ‘education.’” In order to succeed in the cleantech industry, the U.S. must develop an energy education strategy to develop tens of thousands of advanced energy scientists, engineers, and entrepreneurs, as well as technicians.

Recognizing these trends, several experts have called for federal programs to develop our advanced energy workforce. In April 2009, President Obama took up these recommendations by announcing the first nationwide initiative to inspire and train young Americans “to tackle the single most important challenge of their generation — the need to develop cheap, abundant, clean energy, and accelerate the transition to a low-carbon economy.”

The proposal, called RE-ENERGYSE (Regaining our Energy Science and Engineering Edge), is part of the administration’s 2011 budget request, which will be considered by Congress in the months ahead. With oversight from the Department of Energy and National Science Foundation, it would educate thousands of clean-energy scientists and engineers, beginning with $74 million for energy-related programs at universities, community and technical colleges and K-12 schools, with the largest component focusing on higher education.

RE-ENERGYSE is an important step toward creating a competitive U.S. clean-energy workforce — that is why thousands of students and dozens of professional associations want it to succeed, and that is why Congress should fund it at the full budget request. Beyond RE-ENERGYSE, the federal government should work to expand these programs into a clean-energy education strategy on par with the National Defense Education Act of 1958, which helped reposition the U.S. in the space race and achieve revolutions in information technology.

The global clean-energy race represents one of the greatest challenges for American leadership in a generation, and now is a critical moment. If we do not immediately implement a national strategy for energy leadership — including smart investments to educate the energy generation — we will miss a historic economic opportunity. American students are willing to rise to this national challenge, and we need the support of our government to succeed.

Originally published by Clean Edge

Bill Gates speaking at the TED conference.Photo: jurvetson via Flickr

Bill Gates is right. And he is not just talking about the impact on climate change, which does of course present a major threat. He is also talking about one of the most critical global imperatives to make poverty history: making clean energy cheap.

“If you could pick just one thing to lower the price of to reduce poverty, by far you would pick energy,” said Gates in his introduction. Gates should know as well as any development expert, since the Bill & Melinda Gates Foundation — the world’s largest transparent private foundation — has invested billions of dollars in extreme poverty alleviation since 1994.

Nearly 1.6 billion of our fellow human beings have no access to electricity, and around 2.4 billion people — over one third of global population — meet their basic cooking and heating needs by burning biomass, such as wood, crop waste, and dung. “Without access to modern, commercial energy, poor countries can be trapped in a vicious circle of poverty, social instability, and underdevelopment,” concludes the International Energy Agency.

The direct health consequences of using primitive solid fuels like biomass and coal are severe. According to the World Health Organization, solid fuel use causes 1.6 million excess deaths per year globally, especially among women and children — the fourth largest risk factor in developing countries after malnutrition, waterborne disease, and unsafe sex, and the second greatest environmental cause of disease overall.

These numbers are staggering. Energy poverty is an extreme and dangerous condition, and its elimination must be one of the highest development priorities for the 21st century. Nobody on this planet should be forced to burn dung to feed their family and heat their home, and access to modern energy sources should be considered a basic human right.

The implication is that energy technology innovation today should be considered one of the world’s most important social and economic justice movements. The growing movement to make clean energy cheap, and to deliver that energy globally, has the potential to alleviate as much human suffering and injustice as some of the largest, concerted social movements in history.

Of course, driving down the price of clean energy technologies is also essential for reducing global carbon emissions. Until the price gap between low-carbon and high-carbon energy is bridged, poor and rich nations alike will continue relying upon coal and other fossil fuels to power their development. This would virtually assure climate destabilization.

The task is clear: to eliminate energy poverty and avoid climate catastrophe, we must unleash our forces of innovation — namely, scientists, engineers, and entrepreneurs — to develop a portfolio of truly scalable clean energy technologies, bring these technologies to market, and ensure they are affordable enough to deploy throughout the world.

If you gave me only one wish, then, it would be for the United States to launch a major public-private project to make clean energy cheap (or as Google puts it, “renewable energy cheaper than coal“). This requires the development of a comprehensive, strategic roadmap for technology development and deployment, including the identification of specific technical hurdles and the various financial and human resources needed to overcome them. It will then require large-scale public-private investment in each stage of the energy innovation pipeline — from basic research and development, to applied R&D, demonstration, direct deployment, infrastructure, and education — eventually on the scale of $50-80 billion per year of federal investment.

The clean energy investments in the American Recovery and Reinvestment Act were an important first step. Congress should take the next step today with a bipartisan plan to increase the federal energy R&D budget to $15-30 billion per year, on par with the National Institutes of Health, and to develop a comprehensive federal energy education program. If these investments are funded by a modest carbon price, then all the better, but we can no longer make energy technology policy dependent on the carbon pricing agenda. Clean energy innovation is an economic, national security, and human development imperative, and these public investments should be made with or without cap-and-trade.

The United States was a driving force behind the worldwide expansion of prosperity and security in the 20th century. Today, a new American project to make clean energy cheap can alleviate untold human suffering and injustice, develop the world’s strongest clean energy industry, and help save the world from climate destabilization. In short, it may be our generation’s single greatest opportunity to advance global prosperity in the 21st century and secure the lives of future generations. As Bill Gates put it, “This is the one with the greatest impact.”