Hi Mark. I'm glad you think this looks like "an intelligent use of limited government funds." I find your comment about trusting the sources a bit of a red herring though. I guess if we can't trust policy think tanks, businesses (including those who's core business has nothing to do with energy technology), universities, scientists and researchers, I'm not sure who we can trust. The government?!
But I say it's a red herring because you don't need to take their word for it Mark, just look at the facts. I assume you agree we need a dramatic transformation of the global energy system. I know from prior posts and conversations with you that you are not a part of the 'we have all the technologies we need and we've just got to deploy them, not matter the costs' camp. We can get somewhere with the technologies we have now, but nowhere near far enough, nor at an affordable cost tolerable to the body politic.
That means we need a revolution in clean energy technology. So where's that going to come from?
You can see clearly that the private sector R&D investments are chump change when compared to the size of the sector they must revolutionize. They are not under-spending by a little bit. It's two orders of magnitude less than the innovation intensity of the biomedical, IT and semiconductor industries.
Now that might be fine if this was say, the dog-food sector we were talking about. I've seen these hilarious ads on the air lately bragging that their new dog chow "promotes optimal stool quality" and turns your dog into "a champion pooper." Nice. Now I'm a dog lover and I've got nothing against improving my pet's stool quality, but if the dog food industry had neglected it's R&D spending, the world could get by without that new product.
You cannot for a second say the same thing about the energy sector. The imperative is clear. Innovation is essential. A revolution in technology is needed. The private sector cannot fill the gap. So I don't think you need to trust anyone to recognize that $15 billion per year in new government R&D spending is a no brainer, no matter how conservative your views on the role of government.
In fact, the record is also clear that public investments in R&D are essential for a vibrant private sector. They stock the innovation pipeline with new technologies and concepts that VCs and entrepreneurs can help take to market, creating new businesses, industries and jobs. Public R&D spending actually crowds in additional private-sector R&D spending (as has been the case in the health care, IT and energy sectors), rather than risk crowding out private investment (as you fear is the case for the electric vehicle loan guarantees you've criticized).
Even for sectors like health care, IT and microchips with exponentially greater R&D spending levels, the public sector has invested additional funds to support innovation in these sectors. The health and biomed industry invests $60 billion of it's own money in R&D every year, but the public sector still chips in an additional $30 billion annually. That compares to a paltry $3b in private spending and $5b in public spending for the energy sector. And of course, without the public R&D investments that led to the invention of the Internet, GPS, and the graphical user interface - not to mention the creation of the computer science programs that trained our IT geniuses and the huge public procurement contracts that created the microchip industry and help drive rapid and remarkable reductions in cost per chip - we wouldn't even be having this online back and forth, right now, would we?
Public investment in R&D is the norm for sectors of the economy that are critical to our nation's wellbeing, not the exception. The inadequate investments now leveled by both the public and private sectors in energy R&D will prevent us from solving climate change and finally securing our energy independence, not to mention ceded the invention and commercialization of tomorrow's clean energy technologies to our competitors overseas.
You want to stop climate change? Then I'd hope for more ardent support for clean energy R&D spending, on the scale of $15 billion per year, than you've voiced so far. What do you think Mark?
All the best,