Cross-posted from the Council on Foreign Relations.
Steve Mufson had a piece in the Washington Post Outlook section this past weekend suggesting that the $172 billion that the U.S. government has spent on early stage energy research since 1961 has largely been a waste. (I say “suggesting” rather than “arguing” because Mufson doesn’t quite make the point explicitly; that said, it’s hard to read his essay without being nudged toward that conclusion.) There’s a lot of smart stuff in the piece, but in the end, it’s unconvincing.
The basic reason is simple: it doesn’t take much for $172 billion of spending on energy innovation to pay off. U.S. consumers spent roughly $30 trillion on primary fuels and electricity infrastructure between 1970 and 2009. (Data from here; I’ve adjusted everything to 2005 dollars.) That doesn’t include all the money spent on energy consuming technologies like automobiles and air conditioners. Even ignoring that, though, one can loosely conclude that if government spending lowered either energy prices or consumption by a mere 0.5 percent, it was worthwhile. (I say l... Read more