Archive for November, 2011

The More Worthwhile Energy Policy Conversation

Arun

On November 17, 2011, energy policy was the hot topic in Washington. On Capitol Hill, a House panel grilled DOE Secretary Steven Chu over the bankruptcy of government-supported solar firm Solyndra. Congress needs to perform its oversight role but what was striking about the hearing was how little actual energy policy was discussed – it was more political theatre.

In contrast, on the same day, over 300 leading climate and energy advocates, policymakers, Congressional aides, academics, and journalists attended Energy Innovation 2011. They shared and debated a range of insights related to devising a cost-effective way for the government to enable the private sector to make affordable clean energy a reality. It’s the conversation Congress should be having, but is not.

Energy Innovation 2011 successfully built on last year’s groundbreaking conference(link to EI10), which brought together hundreds of clean energy advocates focused on the move away from traditional, but politically-dead carbon pricing schemes and towards energy innovation policy. The real goal? Make clean energy affordable and competitive with fossil fuels without subsidies – and do it as soon as possible. This year’s conference moved from the why to the how. … Read the rest

Oops, Never Mind: BCG Gets it Wrong on U.S. Manufacturing and China

A major consulting firm recently released a study that predicted, “within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world.” The study received widespread attention in the media, desperate as we have become for any good news.

Contrast that to another study by a consulting firm that came to the exact opposite conclusion: “We maintain, in contrast, that the cost gap not only is unlikely to close within the next 20 years, but in some cases may actually increase.” So which study should we believe, the one that says don’t worry, the cost gap is closing, or the one that says it’s increasing and even more manufacturing will be decamping America for China?

One way would be to put our faith in the consulting firm that has the better reputation for doing good analysis. The only problem is that both studies, believe it or not, were produced by the same firm: the Boston Consulting Group. Now BCG might say we should cut … Read the rest

Salvaging Durban with Innovation

Looking past the possibility of any legally-binding global emission target (and U.S. involvement in any treaty), the international climate negotiations opening today in Durban, South Africa are missing the point – the only way the world is going to drastically reduce carbon emissions is through innovation. 

Yet, Durban is set to be weighed down by discussions of caps, targets, and subsidies even though their impact will be severely limited. It’s time for an international policy reset. Let’s stop pretending we can solve climate change with unenforceable pledges to use fossil fuels a little less or subsidize our way to a global clean energy future and prioritize strengthening the global clean energy innovation ecosystem. 

How do we do this? First, we need to be honest about the limitations of what’s being discussed at Durban.

1. Carbon reduction targets and caps – such as an extension of the Kyoto Protocol – do apply pressure on governments to take policy action, but by itself is insufficient to radically reduce carbon emissions. Caps rely almost exclusively on prices to induce change (caps raise the price of carbon emissions).  And it’s clear that price hikes … Read the rest

AGREE Act Aptly Named but More Bipartisan Accord Needed on Innovation

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From time to time, there is a glimmer of hope for bipartisanship on innovation from Congress.The passage of the Patent reform act this year was one example. The American Growth, Recovery, Empowerment and Entrepreneurship (AGREE) Act, sponsored by Sens. Chris Coons (D-DE) and Marco Rubio (R-FL) is another. It is a package of practical actions to encourage and empower American innovators and job creators by focusing on taxes, trade, talent and technology, which ITIF regards as the columns of a solid economy recovery strategy.

The legislation’s tax provisions illustrate how the tax code can be one of the most effective tools we have to encourage job-creating investments, particularly in the critical manufacturing sector. In a welcome departure from the tax simplification mantra, the bill would extend 100 percent bonus depreciation for capital and property investments. Allowing this provision to expire at the end of the year would be precisely the opposite of what we should be doing if we want to breathe life into the otherwise anemic economic recovery.

The legislation also encourages cutting-edge research and innovation, adopting a proposal offered in the House by Reps. John B. Larson (D-CT) and … Read the rest

DOD Steps Up Innovation in Installation Energy, Recognizes Limits in Biofuels

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It’s worth noting a pair of recent developments on the Defense Department energy front. One is a useful reminder of what DOD can achieve now with the proper support, and a cause for optimism; the other, more pessimistic, illustrates the pressing need for accelerated innovation in the alternative fuels industry more broadly if DOD’s strategic energy needs are to be met.

 

First, the Environmental Security Technology Certification Program (ESTCP), which runs the Installation Energy Test Bed Initiative for the Office of the Deputy Under Secretary of Defense for Installations and Environment, has announced27 award recipients under its latest funding round. The initiative was originally established in the American Recovery and Reinvestment Act of 2009 to serve as an evaluator of emerging energy solutions: the program tests technologies in operating environments, assesses their costs and benefits, and facilitates scale-up of those that are most promising.

 

As we explained in a report earlier this year, DOD sees energy as a strategic vulnerability, and recognizes installation energy efficiency and civilian grid independence as substantial opportunities. This thinking underlies the varied efficiency targets previously mandated by legislation, executive order, and internal … Read the rest

Want Low-Cost Clean Energy? Bank on Innovation

This blog is cross-posted by Letha Tawney, Senior Associate of the Climate and Energy Program at the World Resources Institute.

In the United States, there is a heated debate about how much government should support renewable energy innovation. While you won’t find anyone who says they don’t value ‘innovation’, the U.S. federal investment in energy innovation across both fossil and renewable technology is still anemic, badly trailing China and only about one third of the amount recommended by the President’s Council of Advisors on Science and Technology. That’s unfortunate, because there are compelling reasons to accelerate innovation in the energy sector, and specifically in renewable energy.

Innovation – improvement in products like batteries, processes like planning where to place wind turbines on a hillside, and business models like leasing solar panels to homeowners – is a reliable way to drive down the cost of energy and reduce its environmental impacts. WRI’s recent fact sheet The Power of Innovation illustrates how the prices of solar photovoltaic (PV) panels and onshore wind power have declined substantially since the 1980s. While trends like the rise and fall of silicon or steel prices … Read the rest

To Deploy or Not to Deploy?

A recent report by the California Council on Science and Technology has rekindled the debate (see Andrew Revkin, Joe Romm, Dave Roberts) over technological readiness in clean energy, and whether we should be committing resources to innovation or deployment. I’m going to argue here that this deployment question is something of a false choice: the question isn’t whether to deploy or not to deploy, the question is how. It’s really about balance: getting this balance right means we optimize scarce resources to give ourselves the best shot at slowing emissions; getting it wrong means wasting time and money, chasing false solutions while emissions grow.

First things first: the California report asked whether existing technology can achieve the state’s aggressive emissions targets, and the results were straightforward: looking at technical feasibility, and assuming neither political will nor economic cost constrains the effort, California could hypothetically reduce its emissions to 60% below 1990 levels by 2050 – a big number, but short of its mandated target of 80% below 1990 levels. Meeting this more ambitious target requires new technology:

All of the approaches that will reduce emissions from

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There’s value in them numbers

Many years ago, I was the staffer for a Senate subcommittee that had jurisdiction over government data collection. When I would visit the Chairman’s home state (which staffers do a lot), I would be called upon to explain to people, mostly farmers, why they needed to fill out all this government paperwork. Why did the government need to collect all this information? It was just a useless nuisance, they would complain.

Fast forward 25 years to this story in the New York Times - “Agriculture Department Cuts Reports on Crop Inventories”. As the story points out, farm groups are not happy with the cut backs in data collection:

Farmers say such data is crucial — and not just because it helps them decide how much to plant or how many animals to raise. Potato farmers use reports on potato stocks to decide when to sell. Hops farmers use the data to persuade bankers to lend them money for costly processing facilities. Restaurant chains watch catfish numbers to anticipate price changes. With the Texas drought forcing farmers to send their sheep herds to other states, wool and lamb buyers would

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Taking on the $41 Trillion Three Deficits

Looking back over the 2011 budget deficit debate one thing’s for certain: the political landscape and policy discussion hasn’t changed much at all and as a result our future fiscal and economic growth potential are threatened. In addition, our ability to address grand challenges like climate change and energy security become significantly less probable than they already are.

That’s one of the key messages from a new report by the Information Technology and Innovation Foundation and the Breakthrough Institute titled, “Taking on the Three Deficits: An Investment Guide to American Renewal.”  The report argues that what’s needed is a fundamentally different framework that counters the predominant approach that all government expenditures are “on the table” to close the budget deficit, estimated to grow to $18 trillion by 2021. While such a strategy makes policymakers appear bold in their approach, in practice it would actually be counterproductive.  Across-the-board budget cuts would ultimately reduce economic growth and lead to a higher budget deficit over time while stifling key investments in innovation.

The reason is simple: America isn’t tasked with eliminating just one deficit; it actually faces three interrelated deficits. In … Read the rest

U.S. Cluster Analyses, Circa 1900 and 1909

In perusing the Census Bureau archive at http://www.census.gov/history/, I found, deeply embedded in multi-thousand-paged censuses of manufacturers for 1900 and 1909, relatively sophisticated analyses of U.S. clusters, organized by industry and locality.

The 1900 version goes on for 25 pages, covering for each of 15 industries, major manufacturing operations by state and city, nominally and in terms of localization (city’s share of the U.S.) and specialization (industry’s share of city’s output).It summarizes these findings into several tables regarding the industry localization and specialization by cities and states. It ends by discussing, in detail, “The Universal Character of the Localization of Industries,” describing how the phenonmenon of industry agglomeration has been well known for centuries and explaining “The Causes of Localization”: nearness to materials, nearness to markets, waterpower, a favorable climate, a supply of labor, capital avialable for investment in manufactures, and momentum of an early start.

I’ve posted the 1900 cluster analysis here:

1900_Census_of_Manufactures_clusters_analysis.pdf
Download this file

Also available via GW: http://www.gwu.edu/~gwipp/1900%20Census%20of%20Manufactures%20Cluster%20Analy…

Source materials are here: http://www.census.gov/prod/www/abs/decennial/1900.html

The 1909 analysis is shorter, by far, but offers additional reasons for localization, e.g., convenient transportation facilities and the “habit of industrial Read the rest