A Supply Side Policy for U.S. Technological Innovation in Energy

摘要

The environmental and geopolitical costs of America's addiction to fossil fuels make a major federal program to stimulate innovation in energy technology justifiable and essential. Given the central role of energy in the economy and the variety of new technologies needed, this program will need to approach the dimensions of a major military transformational effort. It must go beyond research and development to include all aspects of the innovation process, and should be technology neutral as far as possible, consistent with the need for measures to overcome obstacles specific to particular technologies. Ideally, such a technology supply-side program should be accompanied by policies that ensure a long-term, sustained increase in the price of carbon-based energy, for example a carbon tax or a cap-and-trade system, to foster technology demand. However, given the vested interests threatened by such measures, political support for such demand-side policies in Congress and the executive branch seems some years away. The political barriers to a technology supply-side strategy, on the other hand, are not as high. Given the depth of the need for new energy technology, a supply side program will be needed even if such measures are adopted. Numerous authoritative publications have called for an expansion of energy research and development as a complement to demand-side measures [1]-[4]. However, the specific mechanisms by which the development, deployment and diffusion of these technologies might be facilitated by government action have been left largely unstudied. There is no reason to wait years for an accompanying demand-side strategy; the two approaches do not have to commence in parallel, and progress could be made now on technology supply. We therefore propose a program to create incentives for, and to remove obstacles to, energy innovation.