Biden Budget Falls Short on Clean Energy Innovation and Competitiveness
WASHINGTON—The Biden administration and Congress last year enacted landmark legislation to maintain technological leadership over China by bolstering U.S. competitiveness in key innovation industries, yet the White House budget proposal for fiscal year 2024 throttles back investments that would help achieve that goal in clean energy manufacturing, according to a new report and interactive data visualization from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.
The president’s budget calls for $11 billion in clean energy RD&D funding, an 18 percent increase over FY 2023. Combined with funding increases from the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA), clean energy RD&D investment for FY 2024 potentially could be $17 billion.
However, the proposal tilts toward basic research and development (R&D) instead of applied research, development, and demonstration (RD&D) to commercialize new innovations—and the overall proposal falls short of the funding levels needed to spur the transition to a clean energy economy while strengthening U.S. competitiveness in developing and manufacturing energy technology, according to ITIF.
“The infrastructure bill and Inflation Reduction Act plus CHIPS and Science represented big steps forward. In the new budget, Congress and the administration should build on those foundations by continuing to elevate energy innovation as a national priority,” said ITIF Senior Policy Analyst Hoyu Chong, the author of the report. “Lawmakers were right to conclude America needs a big jolt of investment in innovation to achieve competitiveness goals, address climate change, and improve supply chain resilience. Yet the Energy Department’s budget is still just 0.04 percent of GDP, which trails peer countries such as Norway, France, and Finland, as well as China.”
Competition with China is a major theme in the president’s overall budget proposal; the emphasis centers more on Indo-Pacific Strategy and bolstering agricultural R&D than on clean energy innovation.
By leaning more toward basic energy than applied energy, the new budget proposal also risks undercutting DOE’s goal of advancing clean energy to reduce emissions. ITIF’s report finds several of the Energy Department’s RD&D programs—including buildings, bioenergy, geothermal, manufacturing, nuclear energy, and ARPA-E—are falling behind optimal levels.
“If DOE’s funding had kept pace with the U.S. economy since the department was founded in 1978, its RD&D budget today would be $32 billion, which is more than three times its level in fiscal year 2023,” said Chong. “Congress should maintain the bipartisan consensus that produced last year’s legislation and continue elevating clean energy investments to approach that level again.”
In addition to its new report, ITIF released a comprehensive data visualization breaking down all 24 subprograms at DOE, including funding allocated under the Infrastructure Investment and Jobs Act of 2021 through FY 2023. ITIF will continue updating the visualization with the current data as DOE’s RD&D budget for FY 2024 progresses through Congress.
The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized by its peers in the think tank community as the global center of excellence for science and technology policy, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.