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America’s Next Wave of Innovation and Wealth


By Ron Pernick and Clint Wilder
The Clean Revolution Blog
January 8, 2008


Creation could come from Clean Technologies – But Government Must Act

The United States, often the world’s leader in
technological innovation, could be about to cede
the next wave of business breakthroughs and wealth
creation – those that come from clean energy and
other clean technologies – to other nations if it
doesn’t act soon. The nation desperately needs an
aggressive, comprehensive clean-energy package,
including a national renewable portfolio standard
(RPS), if it is to remain relevant on an
increasingly competitive global playing field.

While the Senate, House, and President get caught
in a web of accusations, filibusters, back-room
manipulation, and threatened vetoes, the future of
our commitment to innovation and economic
competitiveness suffers. It’s time that Americans
get an energy policy that moves the nation into
the future, not one based on the technologies and
energy sources of the past. In recent energy
legislation passed by the Senate, opponents
succeeded in preventing inclusion of a national
RPS calling for 15% of electricity to come from
clean energy sources by 2020 and dropping $32
billion in clean-energy tax incentives that would
have supported the development of solar, wind, and
other new energy resources. Now it’s up to the
House to see if it can move any of these
initiatives forward.

Since the start of the new millennium, as a
clean-tech leadership vacuum persisted at the U.S.
federal level, it’s been U.S. states and cities
that have picked up the ball. Two dozen states –
both blue and red, comprising well over half the
country’s population – now have RPS’s that require
their utilities to generate a specific percentage
of their power from clean and renewable sources by
a specified date. Hundreds of U.S. cities have
signed on to meet or beat the targets outlined in
the Kyoto Protocol. But such local- and
state-level actions, by themselves, are no longer adequate.

Policies to grow the use of clean energy are not
simply an environmental aim, they are an economic
imperative.

Industries such as solar energy, wind power, and
biofuels are growing at 30% annually or more, and
they are creating quality jobs and becoming
cornerstones of economic development from the
plains of Iowa to the R&D centers of Shanghai.
Germany, Japan, Denmark, Spain, Brazil and many
other nations are vying for clean-tech leadership;
even China has a national RPS and fuel efficiency
standards that are currently more aggressive than
those in the U.S. If the U.S. is to compete
effectively in this new global environment, now is
the time for the federal government to get serious
about a consolidated, all hands-on deck, committed
clean-energy policy – including a national RPS. At
a recent [6/21] conference of global clean-energy
financiers in New York, California Energy
Commissioner John Geesman called our lack of an
RPS “a national embarrassment.”As Tokyo, Beijing,
and Frankfurt continue to plot their clean-tech
futures, the U.S. must take a leadership role in
the creation and deployment of clean energy,
transportation, and efficiency technologies.

Just look at the numbers. According to research
firm New Energy Finance, approximately $70 billion
is now being invested globally in clean energy
technologies by corporations, governments, venture
capitalists, and the public stock market. Our
firm, Clean Edge, estimates that the current
market for solar power, wind power, biofuels, and
fuel cells now exceeds $50 billion globally. And
Clean Edge and Nth Power, which each year track
clean-energy venture activity in the U.S., report
that energy-tech venture activity alone has
increased from less than one percent of the total
venture pie in 1999 to nearly ten percent in 2006.

And one look no further than such corporate
leaders as Google, IBM, GE, Applied Materials, and
even Wal-Mart – all U.S. companies seriously
working to deploy clean technologies and push the
innovation envelope. So what can the Federal
government do? In order to guarantee a leadership
role and smart policy, we believe the national
government must:

· Stay focused. Don’t confuse the issue
by saying that nuclear power and so-called clean
coal are clean technologies. They are not, and
the Senate wisely defeated an amendment by Sen.
Pete Domenici (R-New Mexico) that would have put
them under the RPS umbrella. Focus on the
industries that use proven technologies to
produce power cleanly and more efficiently.

· Shift subsidies from fossil fuels to
clean energy technologies such as solar, wind,
biofuels, smart grid, and energy efficiency.
Make sure these commitments are long-term,
reliable, and consistent.

· Get serious about carbon. Our global
counterparts have already begun to put a price
on carbon and are building robust markets. In
2006 alone, the World Bank reports that the
carbon trading market in Europe was worth
approximately $20 billion. The U.S. must join
this global imperative, and leading U.S.
companies such as DuPont, Duke Energy, and PG&E
are already calling for federal action.

· Provide Guidance to the States. To
paraphrase the famous line from Tip O’Neill–
“All Energy is Local.” But the federal
government can and must do its part with
nationwide standards and financial commitments,
along with national clean energy and renewable
fuel targets. Clean-tech leadership is in our
national interest; it can’t all be left up to
the states in isolation.

Detractors and naysayers, of course, will say that
clean energy is subsidy-dependent and therefore
can’t compete in the marketplace. But this is
disingenuous double-speak. Close observers of the
energy industry know that there is no such thing
as a subsidy- and policy-independent energy
source. The oil, coal, and nuclear power
industries have all relied heavily not only on
government policy, but also on rich and lucrative
subsidy programs.

Others will argue that clean technologies can’t
scale up. But this is misguided thinking. Spain
and Denmark, for example, already generate about
20 percent of their nation’s electricity from wind
power and leading states like California are
targeting around 30 percent of their grid
electricity from new renewables before the end of
the next decade.

The U.S., known for its innovation in earlier tech
revolutions such as computer chips, telecom, and
the Internet -- can lead once again. But it will
take a concerted effort by an army of corporate
innovators and startup entrepreneurs – and, like
any revolution – it will require supportive
government policies. Sure, we’re big supporters of
the American free-market economy – but it’s
unrealistic to act as if government policy and
leadership doesn’t matter. In today’s increasingly
competitive global marketplace, you either
innovate or die -- and government has a critical
role in this process.

Now is the time to push the envelope on the
development of 21st century clean technologies. We
need to embed silicon, like we have in our
communication networks, into the electric grid. We
need cars that don’t just get 30 or 40 miles per
gallon – but a new breed of plug-in hybrids that
get up to 100 miles per gallon or more.
Google.org recently awarded $1 million in grants
and announced plans to provide $10 million toward
the development, adoption, and commercialization
of plug-in hybrids and fully electric cars.

We believe that we are in the midst of one of the
greatest shifts in human history. Within 50 years,
we'll look back at the beginning of the 21st
century and see it as the tipping point for clean
technology. The choice for investors, companies,
governments, and individuals is simple. Be part of
one of the greatest business and economic shifts
in recorded human history, or become extinct like
the dinosaurs whose fossils fueled the last great
industrial revolution. The opportunity for wealth
creation and economic leadership stands on one
side of the equation and the very real threat of
the collapse of civilization as we know it on the
other.

Shouldn’t the federal government of one of the
most forward-thinking, innovative, and
technologically savvy nations on earth be leading
that effort?


 

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