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Archive for January, 2013

Breaking Down the Federal Clean Energy Innovation Budget: Deployment Incentives

This is Part 4 of a series of posts analyzing and detailing federal investments in clean energy innovation. Part 1 defined “clean energy innovation.” Part 2 broke down the federal clean energy innovation budget. Part 3 took a look at federal investments in clean energy demonstration projects.

For the last couple of years, the lion’s share of debate on U.S. clean energy policy has focused on encouraging deployment – or large-scale construction and installation – of low-carbon technologies. By significantly deploying clean energy technologies, supporters say, the United States can encourage integration of emerging technologies in an energy market dominated by entrenched fossil fuel interests, spur cost-cutting economies of scale, and get started on lowering greenhouse gas emissions in the process. However, others argue that there is a necessity to designing well-constructed deployment incentives aimed at directly spurring innovation to address climate change.

A Quick Typology of Deployment Policies

Federal clean energy deployment incentives can be made available through grants and other annually appropriated programs. For instance, the State and Tribal Energy Programs at the Department of Energy (DOE) deploy building efficiency and renewable energy technologies within communities. The New

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President Obama Emerges as Born-Again Climate Hawk…Now What?

“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations…The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it.”- President Barack Obama, 2013 Inaugural Speech

For climate change and clean energy advocates, these words are a cause for celebration no matter how brief. After two years of policy inaction, the President dedicated 13 lines – more words than any other issue – on the need to address climate change. On January 21, 2013, the President emerged as a born again climate hawk.

Moving forward, the President has a number of policy paths to choose from, many of which potentially offer the same fate as 2010’s climate change push when cap-and-trade was the policy du jour.

In particular, advocates less inclined to pitch another battle similar to the cap-and-trade debate are most interested in implementing climate policy through regulatory actions. This typically means utilizing existing EPA Clean Air Act authority to regulate carbon emissions from electricity generation plants. More specifically, the EPA could expand

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HTTP Arrow

My State of the Net Comments on the Importance of the Internet to Economic Growth

I had the pleasure of presenting, along with Marvin Ammori, at last week’s State of the Net Conference on the economic impact of the Internet and how to maximize it.  Among the points I made on the impact:

  • The Dot-com domain makes global economy $1.5 trillion larger and will add $3.8 trillion annually to the global economy in 2020 – more than the total GDP of Germany
  • IT workers contribute significantly more to productivity than non-IT workers and IT has more impact on productivity than non-IT capital
  • Between 2001 and 2011, jobs  in IT occupations increased 22% while non-IT jobs were stagnant. Between 2007-2011, jobs declined 4.5%, while IT jobs up 6.8%, contributing $37 billion to the economy.

Among the points I made on how to maximize its impact:

  • First, we should recognize that Internet freedom does not mean Internet anarchy. In other words we should promote Internet innovation and free speech, but also work to limit Internet crime (like malware and copyright theft).
  • Second, we need to get a clearer overall framework to guide Internet policy. Right three competing narratives compete for attention: Abdicate, Regulate, Facilitate. Abdicate says that
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John Kerry: Energy Policy is the Solution to Climate Change

The issue of climate change arose during Senator John Kerry’s confirmation hearing for Secretary of State yesterday and the senator provided several thoughtful comments. Senator John Barrasso initiated the discussion when he expressed concern that action on climate change “could do significant harm to the U.S. economy.” Senator Kerry replied thusly:

The solution to climate change is energy policy. And the opportunities of energy policy so vastly outweigh the downsides that you’re expressing concern about. I will spend a lot of time trying to persuade you and other colleagues of this. You want to do business and do well in America? We’ve got to get into the energy race. Other countries are in it… This is a place for us to recognize what other countries are doing and what our states that are growing are doing, which is there’s an extraordinary amount of opportunity in modernizing America’s energy grid.

First, Senator Kerry is absolutely right that the solution to climate change is energy policy. As Matthew Stepp and Jesse Jenkins detail in their Future of Global Climate Policy series, “To rapidly decarbonize the economy requires greatly accelerating the replacement of

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Breaking Down the Federal Clean Energy Innovation Budget: Demonstration Projects

This is Part 3 of a series of posts analyzing and detailing federal investments in clean energy innovation using the Energy Innovation TrackerPart 1 defined “clean energy innovation” and Part 2 broke down the federal clean energy innovation budget.

Why Government Investment in Demonstration Projects Can Be Controversial

Transforming the U.S. (and global) energy system from fossil fuels to low-carbon technologies requires a healthy, publicly supported innovation ecosystem that invests in and supports research, development, demonstration, and deployment. But as discussed in Part 2 of this series, America’s energy innovation ecosystem is “hollowed out”, particularly because of reduced investment in technology demonstration projects.

At its very basic level, technology demonstration projects exhibit full-scale models of first-of-kind technologies and systems, as opposed to pilot projects (e.g. an ARPA-E project), which aim to simply prove a technical idea. Demonstration projects aim to prove a technology at commercial scale.

Clean energy demonstration projects are an area of extreme policy debate and controversy for two reasons. First, clean energy demonstration projects are often capital-intensive projects that require significant investment and public-private collaboration, typically invoking considerable attention because of large budgets. Second,

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Withdraw India’s GSP Preference If It Continues to Impose Localization Barriers to Trade on Foreign Enterprises

Recent months have seen India introduce several disconcerting localization barriers to trade (LTBs) that discriminate against foreign companies. The Indian government already has imposed LTBs in government procurement contracts, and has further proposed far-reaching local content requirements on even private procurements of electronic goods. Most recently, on January 21, 2013, one news report indicated that India was preparing to exclude foreign information and communications technology (ICT) vendors from participating in the country’s $4 billion national optical fiber network project that will bring high-speed Internet connections to rural areas throughout India.

This follows the Indian Ministry of Communications and Information Technology’s February 2012 announcement of a preferential market access mandate for electronic goods (the PMA Mandate), which if implemented would require a large percentage of high-tech goods sold in India to be manufactured there. A specified share of each product’s market—anywhere from 30 to possibly even 100 percent—would have to be filled by India-based manufacturers, with the local content share for each product rising over time. One of the goals of the PMA Mandate would be to have 80 percent of the computers and electronics sold in India be manufactured

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Welding Robot

I (Want) Robot

Originally published on the Huffington Post.

The new meme is that the robots are coming, and while they are not the Arnold Schwarzenegger “life terminator,” they are the jobs terminator. As MIT professors Erik Brynjolfsson and Andrew McAfee assert in their book Race Against the Machine, workers are “losing the race against the machine, a fact reflected in today’s employment statistics.” Gary Marcus added that as machines continue to get smarter, cheaper, and more effective, our options dwindle. So don’t bother polishing up that resume, rather here’s a link to the unemployment office.

These assertions parallel the largely unfounded fear of technology as a whole and often are used by interest groups and politicians to rally the masses without any clear understanding of what they are against. And as they say, it is a tale as old as time.

During the 1930s, a labor union wrote a letter to FDR proposing the following: “Remove the loading machines from the coal mines, complete all public work with man power, take the tractor off the farms, go into the various industries and remove enough labor-displacing machines to make employment for labor.”

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Critical Materials Institute a Welcome Addition to the Energy Innovation Ecosystem

Dysprosium, a rare earth metal used in magnets for wind turbines and electric vehicles. Photo credit: Wikimedia Commons

Last week, the Department of Energy announced the establishment of a new Energy Innovation Hub at the Ames Laboratory in Ames, Iowa – the fifth such Hub, following the creation of the Joint Center for Energy Storage Research last November. The new Hub will be named the Critical Materials Institute and will “develop solutions to the domestic shortages of rare earth metals and other materials critical for U.S. energy security,” as stated in the Department of Energy (DOE) press release. The Hub-system continues to be a model for concentrating national research efforts, both public and private, and the focus area of the newest addition is a vital one.

As the DOE notes in a helpful infographic, rare earth metals like dysprosium and neodymium are essential to the creation of a wide array of electronics, as well as clean energy technologies like photovoltaic solar film, wind turbines, and electric vehicles. Yet China alone produces close to 95 percent of the world’s supply of rare earth metals, a set of seventeen different chemical

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America Needs a Vibrant Clean Energy Manufacturing Sector

This week, the Brookings Institution released three papers with recommendations to revitalize the domestic manufacturing sector. One proposes the creation of a national network of advanced industries innovation hubs, which would “focus on cross-cutting innovation and technology deployment challenges …by drawing universities, community colleges, state and local governments, and other actors into strong industry-led partnerships.” Another paper calls for an annual, $150 million national “Race to the Shop” competition involving multidisciplinary proposals “to address the manufacturing workforce and skills challenges” of states and regions. Finally, the third paper, authored by ITIF President Robert Atkinson and ITIF Senior Analyst Stephen Ezell, recommends the designation of 20 U.S. “manufacturing universities,” which would receive an annual, federal award of at least $25 million and be obligated to “revamp their engineering programs much more around manufacturing engineering, with particular emphasis on work that is relevant to industry.” The release of the reports helps highlight the need not only for a robust domestic manufacturing sector in general, but a robust clean energy manufacturing sector in particular.

As Atkinson and Ezell note in their book, Innovation Economics: The Race for Global Advantage, “Perhaps no canard

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Breaking Down the Federal Clean Energy Innovation Budget

This is Part 2 of a series of posts analyzing and detailing federal investments in clean energy innovation. Part 1, defining clean energy innovation, can be found here.

Clean energy innovation encompasses more than any one policy, whether it is R&D, tax incentives, regulation, or an economy-wide carbon price. Well-designed public investments impact the entire energy innovation ecosystem and fill gaps in next-generation technology development and deployment. Using data from the Energy Innovation Tracker, this post takes a top-line look at the United States’ portfolio of clean energy investments between 2009 and 2012.

The figure below details federal investments in energy innovation since FY2009, which are divided into ‘technology development’ and ‘technology deployment’ categories. In this case, technology development captures all investments in basic science, research and development, demonstration; technology deployment investments facilitate the installation and procurement of clean energy technologies in commercial markets, along with supporting investments in siting and permitting and training and education.


During the past four years, the balance between development and deployment has evolved dramatically, driven in part by increased procurement of emerging and commercial off-the-shelf energy technologies by the Department of Defense,

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