Energy Innovation 2010: Moving the Conversation Forward

For 35 years, government and the market have been trying and failing to get energy policy right.Congress has failed to pass large-scale clean energy and climate legislation, while China and other competitors are moving aggressively to take the lead in new energy technology.  And the market has failed to create needed low-carbon technology on its own. To address these issues, we need to get past the old energy policy paradigm – and we just may be turning the corner.

At yesterday’s Energy Innovation 2010 Conference, hundreds of leading thinkers, scientists, public officials, and innovators gathered in Washington, DC to initiate a new conversation on a new policy paradigm: one that recognizes the central role of innovation in resolving the world’s looming energy challenges and boosting American competitiveness. Climate change aside, we can’t rely on carbon for the next 150 years the way we did for the last 150.And we can’t create the transformational energy innovations we need without putting innovation front and center.

Spearheaded by ITIF, the Breakthrough Institute, and a long list of partner organizations (full list of partners and speakers here), the conference sought to chart the proper course for a new paradigm with energy innovation as a central focus. But even as agreement grows on the need to innovate, several questions remain on how. Yesterday’s conference sought to answer many of these questions before a packed house at the Press Club.

So what did we learn? There was a lot to take in, but some of the big-picture ideas included:

The Imperatives for Energy Innovation are Diverse. Climate change remains a motivator for acting on low-carbon energy innovation, but not the only one nor the main one. Global energy poverty, national security, and international competitiveness are also strong reasons for acting on clean energy. As Breakthrough Institute’s Devon Swezey pointed out, foreign competitors, not the U.S. lead, in nearly every low-carbon technology. This situation must be rectified. And a focus on energy innovation policy as opposed to pure deployment policy remains the necessary approach because, as ITIF President Rob Atkinson said, new technology does not simply appear in response to changing market conditions, and the market rarely supplies socially optimal levels of innovation on its own – and relayed a joke about economists and parachutes to emphasize the point.

We Don’t Have All the Technology We Need. A lively lunchtime discussion with a trio of energy scientists and visionaries, including Caltech’s Nathan Lewis, NYU’s Martin Hoffert, and Nobel laureate and keynoter Burton Richter of Stanford, reminded us that existing technology has severe limitations. Dr. Lewis provided a great fact to illustrate the point: that all of the batteries ever developed in human history would power the planet for under 10 minutes.

The Public and Private Sector Both Have Major Roles to Play. This point might seem obvious, but many policy makers nevertheless miss it, instead defaulting to the market as the sole provider of technological innovation. Perhaps Clean Air Task Force Executive Director Armond Cohen put it best when he said that the primacy of the market has become so entrenched that one almost feels the need to apologize when citing the importance of government involvement.

Plain and simple, government can take risks the private sector won’t.It frequently pursues early-stage technology winners alone or in collaboration with the private sector, which can then translate them to the marketplace. The lie was put to the idea that government doesn’t have a role to play by our trio of federal officials spearheading critical work: Cathy Zoi, Acting Under Secretary for Energy and Assistant Secretary for Energy Efficiency and Renewable Energy; ARPA-E Director Arun Majumdar; and Jeffrey Marqusee, Executive Director of DoD’s Strategic Environmental R&D Program and Environmental Security Technology Certification Program, which provides the defense community with an important test bed for advanced technologies. And Jesse Jenkins of the Breakthrough Institute and Dan Sarewitz of the Consortium for Science, Policy & Outcomes provided an effective tour of the government’s long historical role in fostering innovation.

A Comprehensive Policy Approach to Energy Technology is Needed. When we’re talking about energy innovation, we are in part talking about R&D support. But we’re also talking about vastly more than that. The University of Colorado’s Roger Pielke, Jr. argued that it’s a mistake to assume that increased federal research funding is the same thing as innovation policy. Innovation is not only laboratory work, but a complex process that involves multiple market and non-market actors. This fact means policies that support technology throughout the development process, from basic research through to scale-up. Tom Kerr of the International Energy Agency observed that the most effective policy regimes from around the world rely on comprehensive technology strategies and a variety of policies that both ensure a supply of technology and early market demand for that technology, with a carbon price as only a piece of that. The argument for such an approach echoed throughout the day.

There was much more discussed beyond these themes; keep an eye on ITIF’s site for video and other materials from the day, and check out great overviews from Andrew Revkin, who moderated the energy scientist panel mentioned above, and from Americans for Energy Leadership.

So what’s next? True, preconceptions about effective energy policy are tightly held, and many in the energy policy community still don’t fully understand the sources of technological development or the limitations of existing technology. Conventional neoclassical “wisdom” remains a force to be reckoned with, however misguided. Add to that the surplus of overheated political rhetoric and the deficit of dollars, and we have our work cut out for us.

Still, yesterday’s conference was meant to initiate the conversation for the broader energy policy community. As such, it’s a starting point and a prologue to a much longer debate as a political constituency for energy innovation takes shape. Achieving a policy paradigm shift will be a challenge and significant work remains, but if Energy Innovation 2010 is any indication, the innovation community has a strong base upon which to build. We should all be looking forward to engaging with that challenge in the months ahead.