The United States
government could save the economy hundreds of billions of dollars per year by
2050 by spending a few billion dollars more a year to spur innovations in
energy technology, according to a new report by researchers at the Harvard Kennedy School.
Achieving major cuts in carbon emissions in the process will
also require policies that put a substantial price on carbon or set clean
energy standards, the researchers find.
The report is the result of a three-year project to develop
a set of actionable recommendations to achieve “a revolution in energy
technology innovation.”
The project,
part of the Energy Technology Innovation Policy (ETIP) research group in the Kennedy School’s Belfer
Center for Science and International Affairs, included the first survey ever conducted of the full spectrum of
U.S. businesses involved in energy innovation, identifying the key drivers of
private-sector investments in energy innovation.
The
researchers also surveyed more than 100 experts working with an array of energy
technologies to get their recommendations for energy R&D funding and their
projections of cost and performance under different R&D scenarios. They then
used the experts’ input to conduct extensive economic modeling on the impact of
federal R&D investments and other policies (such as a clean energy
standard) on economic, environmental, and security goals.
The research
team identified industries that would most benefit from increased innovation
investment. The report recommends the largest percentage increases for research
and development in four fields: energy storage, bio-energy, efficient buildings,
and solar photovoltaics.
The report,
titled Transforming U.S. Energy
Innovation, recommends doubling government funding for energy
research, development, and demonstration efforts to about $10 billion per year.
The modeling results suggest that spending above that level might deliver
decreasing marginal returns.
The modeling
done for the report projected that investing more money in energy innovation
without also setting a substantial carbon price or stringent clean energy
standards would not bring big reductions in greenhouse gas emissions—largely
because without such policies, companies would not have enough incentive to
deploy new energy technologies in place of carbon-emitting fossil fuels.
The
researchers also propose ways for the government to strengthen its energy
innovation institutions, particularly the national laboratories, so that the United States
can get the most bang for its buck in its investments in energy innovation. The
report concludes that the national laboratories suffer from fast-shifting
funding and lack incentives for entrepreneurship.
The
researchers also find that the performance of public-private partnerships and
international partnerships on energy innovation would benefit from gathering
information about the performance of previous projects.
