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Innovation is central to addressing global climate change while increasing economic growth, boosting international competitiveness, and strengthening energy security. Yet out of a $4 trillion budget, the United States only invests about $8 billion a year—or 0.04 percent of GDP—on clean energy research and development. Rob and Jackie discuss the urgent need for innovation in the clean energy sector—and “must pass” legislation that will accelerate progress—with Colin Cunliff, senior analyst at ITIF’s Clean Energy Innovation Program.
- Colin Cunliff, “An Innovation Agenda for Deep Decarbonization: Bridging Gaps in the Federal Energy RD&D Portfolio” (ITIF, November 2018).
- Colin Cunliff, “Omission Innovation 2.0: Diagnosing the Global Clean Energy Innovation System” (ITIF, September 2019).
- Colin Cunliff, “An Innovation Agenda for Hard-to-Decarbonize Energy Sectors,” Issues in Science and Technology, Vol. XXXVI, no. 1, Fall 2019.
- Colin Cunliff, “Accelerating Energy Innovation in the 116th Congress: 10 Priorities for 2020” (ITIF, January 2020).
Rob Atkinson: Welcome to Innovation Files. I’m Rob Atkinson, president and founder of the Information Technology and Innovation Foundation. We’re a DC based think tank that works on technology policy.
Jackie Whisman: And I’m Jackie Whisman, I handle outreach at ITIF, which I’m proud to say is the world’s top rank think tank for science and technology policy.
Rob Atkinson: And this podcast is about the kinds of issues we cover at ITIF, from the broad economics of innovation to specific policy and regulatory questions about new technologies.
Jackie Whisman: And today we’re joined in our virtual studio by our colleague, Colin Cunliff. A senior policy analyst at ITIF who focuses on clean energy innovation. Hey Colin.
Colin Cunliff: Hey Jackie. Thanks for having me.
Jackie Whisman: Anyone who’s read your work knows you’re brilliant, but here’s a quick bio for the uninitiated. Before ITIF, you worked at the Department of Energy’s Office of Energy Policy and Systems Analysis. You were an advisor on energy climate and transportation in the US Senate and you hold a PhD in physics. And I do not hold a PhD in physics in case you were wondering.
Rob Atkinson: I hold a PhD, but it’s not in physics either. And also, Colin is a nuclear engineering, nuclear physics. So it’s even more-
Jackie Whisman: Just the best of the best.
Rob Atkinson: It’s the best of the best.
Colin Cunliff: Black holes and quantum gravity.
Rob Atkinson: Oh yeah, well, we’ll talk about that later. That’s one of my areas of interest, obviously. So I’m probably biased, but I really think the work you and your team produces on clean energy is really the best in the world. And so I’m really excited to have you here today to talk with us about issues around clean energy innovation.
Jackie Whisman: And maybe it would make sense to start things off by explaining in broad terms, what your group works on. And then we can dive into the specifics if that works for you.
Colin Cunliff: Sure. Well, innovation is central to addressing global climate change while also increasing economic growth and boosting international competitiveness. The ITIF’s clean energy innovation policy program seeks to accelerate the transition of the domestic and global energy systems to low carbon resources.
Rob Atkinson: And innovation is essential for addressing climate change. It’s striking how many people still focus on things like if we could just all recycle a little bit more, drive a little bit less, we could solve climate change. And we believe that innovation really has to be at the heart and soul of addressing any kind of climate solutions. What are your thoughts on that?
Colin Cunliff: We’re still far from having all of the technologies we need at a commercially deployable scale and at a cost that makes them equivalent to fossil fuels. One recent report found that a whopping 35% of the emissions reductions that we need to reach net zero energy system will come from technologies that are not commercially available today. And these exist only in the lab or demonstration setting.
Jackie Whisman: And experts, well you’re the expert you say, we’re not investing in clean energy innovation at a scale that matches the urgency of climate change. And why is this?
Colin Cunliff: Well some market failures caused the private sector to under invest in innovation and government support is certainly essential to make the high risk long-term investments that we need. But out of a $4 trillion budget, the United States only invest about $8 billion a year or 0.04% of GDP on clean energy research and development. And that’s primarily through the Department of Energy, but this is well below historical levels. For example, in 1978, when the department was created, Congress invested $10.5 billion on energy research because they viewed innovation as essential to fuel economic growth and advanced national energy security. If we invested at the same level that we did relative to the share of our economy, we would be investing $32 billion today.
Rob Atkinson: So Colin, you mentioned market failures and I think in the clean energy space, it’s really probably the worst area of market failure on R&D because in most areas of R&D, when a company invest in it, they’re like, oh I’ll get a better product and it’ll go on the market. If you’re doing something with energy, the odds of you getting a better product are pretty low if you take out the effect of carbon. And if you’re a company you don’t care about carbon. You might, I’m sure companies do because of social responsibility, but from a bottom line perspective, we don’t have a carbon tax so they don’t care about it. And so I think that’s a big factor that makes it really, really hard. It’s hard to compete with all that energy that’s packed into carbon fossil fuels. It’s the greatest energy source of all time.
Colin Cunliff: Well, when you compare the energy industry to other sectors like the pharmaceutical sector, they invest much greater percentage of revenue on R&D and the reason is they can generate a profit on that in the near term. For the energy sector, one of the challenges is that energy is a commodity that you produce a kilowatt hour of electricity and that’s the same from a coal fire power plant or from renewable energy. And new emerging technologies, can’t gain a leg up on the incumbent technologies. And you’re right, that’s primarily because they don’t value the carbon-free attribute of clean energy.
Rob Atkinson: Yeah. So I think in one level, maybe that’s the biggest challenge for getting folks from the right side of the aisle to understand. You got some Republicans now, increasing number of Republicans, who are acknowledging the climate is a serious problem and that we need innovation. But sometimes they just say, “Well, we can just enlist the market to do it, or the private sector.” And sure, we’ve got to do more of that. But that’s super hard.
And on the other hand, I think for a lot of folks on the left in the US, you see this view that, “Well, if we could just reduce our carbon emissions, that somehow would make big strides on climate change.” And that sounds logical until you understand that we could go to zero on our carbon emissions and in about 10 or 15 years or some number the rest of the world, by just the fact that they’re getting richer countries like India and China, they’re just going to admit all of that carbon on their own. And so solutions have to be global. And that’s why we think innovation so important. How do you think we can we get people on both sides of the aisle to understand that equation?
Colin Cunliff: Well, so innovation at least does seem to have bipartisan support. In part, because it’s an engine of economic growth, but we’ve seen in the past few years that both Republicans and Democrats in Congress have proposed their own policy proposals to double investment in clean energy R&D or basic science research. So I think there is at least innovation is a kernel of agreement between two sides.
Jackie Whisman: think it’s worth bringing up the Green New Deal here, because I think we hear a lot about it. Those on the left are pretty loud about it. I have to admit, I don’t know a ton about it, but I’d love to hear your thoughts and where you see that going if anywhere.
Colin Cunliff: Well, the Green New Deal is a set of progressive goals that includes addressing climate change, but also improving things like justice and equity. And it’s pretty light on policy details and particularly on innovation. And in fact, it doesn’t include the word innovation at all. And also the Green New Deal speaks to progressive ideals and it references the New Deal from the Roosevelt administration. But I think I’m a better metaphor for fighting climate change is the Cold War. The Cold War lasted for nearly half a century. It required global alliances and the US sought advantage through superior technology. And more importantly, the Cold War required a durable bipartisan coalition that was deeply rooted in public support. And climate change has many of these features that requires a decades long global effort to transition to clean energy. And here in the United States, we can’t afford the kind of start and stop action that occurs with each change of an administration.
So we really need this widespread buy in from both political parties and the public. And I think the innovation framing and the innovation based agenda can help us do that.
Rob Atkinson: What do you think are the biggest reasons why some of the folks in the Green New Deal... And you see this, frankly, in the environmental movement itself sometimes. Where they, I don’t want to say they dismiss innovation, but they don’t really give it as much credence as one would hope they would. What do you think is behind that?
Colin Cunliff: I think we’ve seen this trade off or competition between the deployment narrative and the innovation narrative. On one hand, people think we should just deploy all the technologies that we have now. It might be a little bit more expensive, but some people are willing to pay. But I think that the problem with that is when you get down to it, a lot of people aren’t willing to pay higher costs. And that also overlooks key sectors and key challenges and harder to decarbonize sectors where we really don’t have commercially available options, high cost or not. I also think, and this is a legitimate critique, is that when we talk about the innovation agenda, some people, some environmentalists do interpret that as postponing action. And I do think some people on the right have used the innovation framing as a framing to say, “Let’s just put this off until tomorrow.” But I think we can do both: Reduce emissions in the near term, drive down costs in clean energy technologies while also continuing to innovate and develop these new technologies in sectors where we don’t have good solutions.
Rob Atkinson: Yeah. You mentioned the cost issue, I think as you both know, when we actually used to go to work outside of my office upstairs in the second floor of my house-
Jackie Whisman: I don’t remember that time.
Rob Atkinson: It’s a vague, cloudy memory, but I seem to recall somehow I would get on my bike every morning and ride downtown. And also I have signed up for a number of years to buy all of our electricity from wind power, but I pay a premium for that. And I’m okay with paying a premium for that. And a lot of people aren’t though, partly because they don’t have the money to pay the premium and as I recall, I remember we wrote about that. I’m trying to remember what the number was, but it’s something like 2% of people who have the opportunity to buy wind instead of the regular electricity, take advantage of that because of the extra price. Is that about right?
Colin Cunliff: Yeah, I believe so. But even beyond just the price increase, we still have to remember that almost a billion people in the world don’t have access to electricity today. So as developing countries begin to expand the middle class and give more people access to energy, they’re going to choose whatever is cheapest. So in part, I think it’s the responsibility of the United States and other developed nations to continue to innovate to drive down costs so that it is cheaper and more widely available for these developing countries where they’re still trying to frankly give their people access to electricity and access to clean cooking fuels.
Rob Atkinson: I was on a panel a number of years ago, this Blue-Green conference and their trying to bring labor and environment together. And one of the panelists, I won’t say who it was, but I mentioned something about how I thought it was going to be important for a country like India, to at some point to bring everybody up to a middle class lifestyle. And I believe that. I believe everybody in the world should have that. And she was horrified. She was like, “There’s no way that the environment can handle that.” And I was like, “Well they could if you gave me a bunch of your money and you didn’t consume it, you could give the money to ITIF and you wouldn’t consume as much.” But my point is the rest of the world actually, they don’t want to be poor. They want to live decent lives. And we have to respect that and encourage that. And so we have to figure out a way that we can have a world where people are going to live better lives, but at the same time, get close to deep decarbonization.
Colin Cunliff: I completely agree.
Jackie Whisman: And actually, could we back up a little bit and have you Colin define what you mean by deep decarbonization because I think I know what it means, but I think that maybe some people listening don’t totally understand.
Colin Cunliff: Sure. So when we talk about decarbonization a lot of actions that we’re talking about is near term actions to switch to cleaner electricity like solar and wind, or perhaps to electric vehicles. And in many cases these yield marginal emissions reductions over current energy systems. Deep decarbonization refers to efforts to achieve really deep levels of decarbonized energy systems, like 80% to 100% is typically the emissions reductions that we’re looking at. So really long-term, very deep emissions reductions below current levels.
Rob Atkinson: What do you think are the biggest technology needs that we have to get there?
Colin Cunliff: So a lot of people focus on wind and solar and that’s in part because costs have declined very rapidly just in the past decade. And I do think over the near term, over the next decade or so, we’re going to see a massive build out of wind and solar just because they are now becoming competitive. But it’s important to remember that electricity is only 28% of US greenhouse gas emissions, and only 25% of global greenhouse gas emissions. So we really need to start looking at other sectors. In transportation, electric vehicles can do a large part, and it does look like most projections have electric vehicles becoming cost competitive with internal combustion vehicles in the next decade.
Electric vehicles won’t solve all transportation sectors. So heavy duty trucking, aviation and shipping, we are going to continue to rely on clean fuels. And then in the industrial sector, there are huge numbers of industrial sub sectors where we just don’t have options. So I think we’re going to need some form of carbon capture and storage in those sectors, and then just really cranking out the option generation for a lot of these more challenging sectors.
Rob Atkinson: Can you just say quickly for the listeners, what does carbon capture and sequestration look like? There’s air capture and other kinds of things. What does it actually look like and how do we do it?
Colin Cunliff: Sure. So there’re range of technologies, but you look at a point source like either a power plant or a cement manufacturing facility and you can think of sticking on just a scrubber on the smoke stack that removes the carbon dioxide from the flue exhaust, concentrates it and then you can pump that underground back where the carbon was originally trapped. Remember it was originally in coal and natural gas and oil deposits underground for millions of years. So there’s great reason to think that if we put it underground in particular formations and saline and salient aquifers and depleted oil and gas zones, that the CO2 would have remained trapped.
Now, we typically think of CCUS or carbon capture, utilization and storage as being applicable to power plants. And in the United States, our focus has been on coal fire power plants. But it’s really widely applicable. It can be installed on ethanol facilities, on cement and on iron and steel production facilities.
Rob Atkinson: And also, I would assume on big chemical plants too.
Colin Cunliff: Yeah sorry, that’s another big one. But especially ammonia generation is a big source of CO2 emissions. We produce something in the order of 10 million tons of hydrogen in the United States and that’s also a potential application for carbon capture.
Jackie Whisman: If Rob gets any more time in his house, he’ll probably start to try to put a carbon capture apparatus on his home. So I want to go back to policy a little bit and only few bills have made it across the finish line and become law in this space and you’ve authored a of wishlist of legislative priorities. And I’d love for you to go into maybe your top three must-pass bills, you can go into more if you want to, but bills that would help us make at least a little bit of progress here.
Colin Cunliff: Well I think in the Senate, the Senate Energy Natural Resources Committee has done an amazing job identifying innovation challenges and developing new legislation. And they’ve actually packaged that up into a single bill called the American Energy Innovation Act, which contains a large number of bipartisan priorities. Most of these bills passed the committee by votes of 20 to 1 or 19 to 2. So there’s widespread support.
Now some of the components that I would prioritize, the first would be ARPA-E Reauthorization. So this increases funding for ARPA-E, which is the Advanced Research Projects Agency for Energy. And they invest in high impact, high risk research. The National Academies recommended that they be funded at a billion dollars per year. We’re still not close to that. We currently invested about $425 million today, but the ARPA-E Reauthorization bill would increase that funding up to $750 million annually.
Jackie Whisman: That’s a little closer, not quite there though.
Colin Cunliff: It’s closer and it’s in part because there’s such widespread respect for ARPA-E. My second priority would be the Clean Industrial Technology Act. This would establish new programs that are aimed at industrial decarbonization and especially harder to decarbonize sectors. And this is important because we don’t have any federal research program today with the mission of reducing emissions from industrial sectors. We have the advanced manufacturing office, which aims at helping manufacturers reduce their energy inputs, but it’s not explicitly focused on decarbonization.
Jackie Whisman: That’s nuts. There’s no one looking at how to reduce emissions from industrial sectors. That’s nuts. Okay. Sorry to interrupt.
Colin Cunliff: No, I agree. It’s a huge gap in our federal research agenda and that’s why this makes number two on my priority list.
Jackie Whisman: Yeah.
Rob Atkinson: Well also Colin you’re great report on hard-to-decarbonize sectors was really a roadmap for where we can go with that. All these sectors of people don’t really think about very much, and they’re hard to decarbonize and we got to get at it now.
Colin Cunliff: Yeah and a lot of the bills that are wrapped up into this big American Energy Innovation Act, incorporate a lot of these recommendations. Another one is on long-duration energy storage. Again, we’ve got a small program on batteries for the grids in the DOE Office of Electricity, but the Better Energy Storage Act creates a new cross cutting program that looks at long duration storage. So we’re talking days to weeks to even seasonal storage. And that’s going to be important as we incorporate greater levels of renewable electricity, which vary in the amount of electricity you can generate from them over the course of a year. So those are my top three.
Rob Atkinson: I think we could have a list of top 20.
Jackie Whisman: Well, your report has 10 and we’ll link to it in the show notes.
Colin Cunliff: Perfect, thanks.
Rob Atkinson: What’s your prognostication Colin on... It seems we’ve had a sea change if you will, in terms of how people are thinking about and talking about climate. Seems to be, finally I think there’s a widespread acceptance except maybe a small narrow number of climate deniers, that this is a real problem. It’s serious. Widespread acceptance that we got to do things. You see a lot more corporate action and discussion. You see more bipartisan action. You see more international action, although some of that’s just symbolic in my view. Making these claims we’re going to cut emissions by 30%, but not backed up by anything. Are we on a better trajectory now and can we hope that that’s going to continue?
Colin Cunliff: Yeah. I think we are seeing more agreement and innovation focused agenda on the House side House Republicans proposed at doubling funding for basic science research as part of their approach to addressing climate change. Similarly in the Senate side, Senator Lamar Alexander, Republican from Tennessee, who is the chair of the Energy and Water Appropriations Subcommittee. He’s long called for doubling federal support for clean energy R&D. And then on the Democratic side, every major democratic candidate for president included significant increases for clean energy R&D as part of their platform. And the current nominee, Vice President Biden, has called for investing $400 billion in clean energy research over the next 10 years. So I think we’ve seen a lot of different proposals. Now it’s important to figure out where there’s overlap and where there’s consensus that we can build upon and hopefully support ratcheting and increasing goals for innovation.
Jackie Whisman: Well, why don’t you take this opportunity to plug your Twitter and tell everybody where they can find your work so that everybody in these incoming administrations, whoever they are, can look to your work to guide them.
Colin Cunliff: Yes, we’re working on identifying these areas of overlap and areas of consensus where people can build off of that. So I’m continuing to publish research both with my boss David Hart at ITIF, but also with other researchers that we work with including Columbia University. You can follow me on Twitter, @Colin_Cunliff and I’ll continue to promote my research there.
Jackie Whisman: Thanks for being here and that is it for this week. If you liked it, please be sure to rate us and subscribe. You can find the show notes and sign up for our weekly email newsletter on itif.org. Feel free to email show ideas or questions to firstname.lastname@example.org and follow us on Twitter, Facebook and LinkedIn @ITIFDC.
Rob Atkinson: Thanks for listening. We have more episodes and great guests lined up. New episodes will drop every Monday morning. So we hope you’ll tune in next week.