At around 12:15pm EST, Secretary of Energy Steven Chu took the podium at the National Clean Energy Summit 4.0 – The Future of Energy to deliver the opening address. In the spirit of summary, I have paraphrased his speech:
During the Recovery Act, our government supported the clean energy enterprise though policies like loan guarantees and grants. These saved an economy that was in free fall. For each public dollar invested through loan guarantees we leveraged roughly ten times that in private money creating over 10,000 jobs. Manufacturing tax credits allowed for $560 million of economic benefits in first five years. There are many similar success stories.
We’ve also invested in “critical research”, e.g. through the agency ARPA-E which was designed for high-risk, high-reward research. So far, it’s a “spectacular success.” There may not be home runs yet, but lots of people are rounding second base.
People have argued that in difficult times, much like those we face now, government should retract and avoid overextending itself. I believe history proves this is notion wrong.
During the Civil War, things were bleak. Despite our incredible national stress, the Morrill Land-Grant Colleges Act was passed in 1862. Its goal was to “teach such branches of learning as are related to agriculture and the mechanic arts.” This led to Transcontinental Railroad and later developments during WWII.
There are other examples of thinking long-term during times of conflict. In 1957, during the Cold War, Sputnik 1 was launched. Eisenhower took the long view and identified the root problem: the US was lagging the Soviets in training scientists and engineers. In response, he launched education programs from which many scientists, including myself, benefited.
So what about this idea that the best ideas should always come from the private sector? The Wright Brothers invented the airplane in 1904, but within a decade Europe had surpassed us. As the US developed its postal industry, the need for air mail became paramount. A public-private partnership with domestic aviation supported the regeneration of this vital American industry.
The US military was the first market for semiconductors. Many of the first computers and computer science departments were government sponsored. I already mentioned the Land Grant Universities during the Civil War. Always, the government played a critical role.
So where are we now? In the last 5 years, the price of solar photovoltaics has dropped 50%. This is set against the backdrop of increases in oil prices. The Obama administration recently passed new automobile fuel efficiency standard of 54.5 mpg by 2025. Drivers will save over $1 trillion as a result. Appliance standards from the Department of Energy will save Americans half a trillion dollars over the next several years.
In times of fiscal austerity, we must look for the most effective leveraging of public dollars to spur private investment. Our innovation machine is the envy of the world, but it shouldn’t be taken for granted. Investments in education are the seed corn of our future.
We must also adopt a clean energy standard, which doesn’t pick winners and requires no tax expenditures. Also, it will minimally affect energy price and spur green jobs.
The US can lead in the energy race, but we are at a crossroads. Examples of foreign successes abound. China has the high voltage transmission lines in the world and they’re trying to market them abroad right now. So, we can lead in clean energy development, or we could do nothing. Let’s take the long view and be better for it.