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Why the Government Should Invest in Clean Energy

At a clean energy summit today, Energy Secretary Steven Chu said that, over the long-term, government support allows innovation to thrive.

The American idea of innovation centers on a lonely genius toiling in his lab or experimenting out in the field. That’s how Thomas Edison invented the lightbulb, Alexander Graham Bell created the telephone, and the Wright Brothers launched the first airplane. But the Wright Brothers didn't create the aerospace industry alone—that required some institutional support. Building on that idea, Secretary of Energy Steven Chu argued today at a clean energy summit in Las Vegas that, over the long-term, government support allows innovation to thrive.

The summit, which is in its fourth year, is convened by Senate Majority Leader Harry Reid and partners from the academic, business, and think tank worlds. Chu said in a speech this morning that the federal government must help incubate clean energy innovation in order for the country to prosper.

“The government played an incredibly intimate role in all the technologies that led to prosperity in the United States,” he said.

Take airplanes. The Wright Brothers made the first technological leaps into the atmosphere, but “by 1915, Europe had blown by what they had done,” Chu said. In World War I, it wasn’t American planes, but British, German, and French that used the most advanced technology. Only after the U.S. government had established the National Advisory Committee of Aeronautics and spurred competition by handing over mail delivery to private companies did the U.S. recapture the lead in aerospace engineering.

Just as America lost its technological lead in the years after the Wright brothers invented the airplane, the country has been losing ground to China in the clean energy industry, even though the first solar cells were made in America at Bell Labs. But today’s federal government can spur further clean energy innovation, Chu suggested. In the solar sector, for instance, the Department of Energy has created the SunShot initiative, which aims to make solar competitive with other forms of energy generation by 2020. And through the stimulus program, the department has been able to support clean energy research and development through loan guarantees, tax incentives, and grants.

But Chu suggested that the government could do even more. “Our scientific innovation and engineering machine […] shouldn't be taken for granted,” he said, adding that it requires investing in research and development and in scientific education. Chu also said that the country should create a renewable energy standard, mandating that an increasing portion of electricity nationwide should come from hydroelectric, geothermal, wind and solar sources. (More than half of states already have such standards.) Furthermore, he argued, the federal government should “seriously consider” creating an independent agency for clean energy development—a government organization that would start with $5 to $10 billion to invest in clean energy technologies, and reinvest the interest from those loans into new projects.

The U.S. government has never made significant investments in any energy research and development projects (with the exception of a short period in the late 1970s, when the oil crisis pushed the government to take an interest in alternatives to oil). It’s not only government officials like Chu that are advocating for more investment, though. Bill Gates and other entrepreneurs formed the American Energy Innovation Council to lobby the government to spend $16 billion on clean energy each year. In the scheme of government spending, that’s a fairly small sliver of budget. But as Chu pointed out, government support has driven innovation before, and it could do it again.

Photo (cc) via flickr user Idaho National Laboratory

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