During last night’s Presidential debate on the economy, President Obama and Governor Romney managed to touch on clean energy innovation policy – albeit only within vague talking points. In fact, the word “innovation” was only mentioned twice, and only in the context of the American people being innovative. In other words, in a debate on the economy, neither candidate for President of the United States mentioned the primary driver of economic growth, job creation, or the critical way America will make clean energy cheap and viable everywhere. As I’m sure many analysts have said today, we’re not surprised.
But even in clean energy’s brief moment in the spotlight, an important clean energy policy – government investment – was discussed. The president touted investments in clean energy – “ We’ve got to look at the energy sources of the future, like wind and solar and biofuels, and make those investments.” Governor Romney countered to criticize the President’s investments in clean energy policies through the Stimulus, “But don’t forget, you put $90 billion…into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right?”
As with all debate one-liners and campaign rhetoric, the devil is in the details. In reality, the $90 billion in Stimulus Act funds referenced by Romney constituted not only tax breaks and subsidies, but also investments in innovation. The breakdown is important. In total, the Stimulus boosted investments in clean energy innovation programs by $4.1B in 2009 and 2010 including the initial investments in ARPA-E, carbon capture and sequestration demonstration projects and R&D, basic energy research at the Office of Science, and a myriad of other R&D projects across all clean energy technologies. Another $4 billion went to jump-starting a much needed modernization of the electricity grid. DOE invested almost $11 billion in numerous energy efficiency block grants and programs at the state level. Over $2 billion went to supporting advanced energy manufacturing. Another $2 billion went to supporting the creation of an electric vehicle battery industry. And almost two-thirds of the investments went to buying down the costs of clean energy deployment projects, such as through loan guarantees, subsidies, and tax incentives. It’s fair to criticize whether the portfolio of investments didn’t prioritize innovation or supported deployment of noncompetitive technologies. But painting all government investments in clean energy as the same is inaccurate and glosses over that at least one-third of the $90 billion supported innovative projects and technology development.
The brief flap over clean energy also brought up a common topic of debate – that the government’s investments in clean energy have led to nothing but failure. But as Washington Post’s Brad Plumer notes, only three companies that have received loan guarantees – which Gov. Romney was referring to – failed. Out of 33 loan guarantees, the failure rate is only 2.6 percent. It is also important to remember that the Stimulus investments made into innovation, infrastructure, and advanced manufacturing funded high-risk, high-reward projects. These investments can result in either breakthroughs or failures. And as ITIF has observed, policymakers and energy stakeholders shouldn’t be scared off by occasional failures in supporting innovation: “Innovation – and innovation policy – requires courage to stick through the failures, reform policies if needed, and continue working towards our national goals.”
Nevertheless, the debate did tangentially circle around a fundamental truth. Far too much government spending is directed at deploying largely noncompetitive first-generation energy technology, while vital clean energy innovation programs remain underfunded. By not emphasizing the need for improvements to our energy innovation ecosystem, neither candidate – despite their references to the country’s production of oil, gas, wind, solar, and biofuels – provided a coherent approach to national energy policy. Americans can only hope that the candidates will explore energy innovation policy in much greater detail in the upcoming, town hall-style debate on October 16. With the third and last debate set to focus on foreign policy, there simply aren’t many opportunities remaining for a serious discussion of the issue.
Photo credit: Wikimedia Commons.