© Lewis J. Perelman, 2012
Executive Summary
Energy Innovation: Fixing the Technical Fix
Energy policy is what systems scientists literally call a “mess”: a tangle of economic, environmental, social, and technical problems stirred by competing and often conflicting political agendas.
Breakthrough Institute founders Ted Nordhaus and Michael Shellenberger have promoted
the case for a fundamental shift in energy policy strategies—away from schemes to
make dirty energy more expensive and instead a strategy to make clean energy cheap.
What they call an “emerging consensus” of analysts and centers agrees that a greatly
increased investment in breakthrough technology innovation is essential to resolving
the mess of energy-
However, a number of complex issues make it more difficult to devise how the grand technology initiative is to be carried out, by whom, and with what results:
- It is not clear how much public investment is needed.
- Some debate whether a technology-
first strategy is sufficient. - Innovation requires more than just R&D investment.
- There are many social and political limits to how effectively technical fixes can be created and implemented—including corruption, special interest lobbying, and rebound effects.
- Monetary factors—price, purchasing power, financing, and volatility—powerfully affect the pace and form of innovations.
- Concepts of the relative roles of government versus the private sector in fomenting innovation are diverse and sometimes conflicting.
- Allocating resources among a diverse portfolio of energy technology opportunities is ultimately subjective and prone to biased influences.
- The wish for stable policies will continually be disappointed.
Moreover, in the current economic environment, financially distressed governments simply may not be able to provide the scale of investment called for. However, a Plan B strategy for “innovation on a budget” is possible.
Plan B begins with the recognition that a “big” energy innovation program does not necessarily need to be big in cost to the public treasury to be big in the scope of its reach, engagement, diversity, and impacts.
Rather, a number of limited-
- The Information Technology and Innovation Foundation has suggested ten types of low-
cost tactical measures that governments with limited budgets still may use to encourage the kind of energy technology innovations the emerging consensus is calling for, including: targeting procurement, restructuring tax policies, revising regulations, and using information. - Properly organized “inducement” prize competitions—such as the X Prize—can generate
significant innovations far more cost-
effectively than direct government expenditures on R&D, subsidies, and such. - In-
Q- Tel—a private, nonprofit corporation launched by the U.S. Central Intelligence Agency in 2000 with the explicit mission of accelerating the development of information technology innovations—is an example of how government can use modest resources to leverage big innovation results. - Historically, foundations and other private philanthropists have nurtured major,
even world-
changing breakthroughs in science and technology—including the polio vaccine and the “Green Revolution” in agriculture.
Several emerging-
An indicator of what a socially and digitally networked energy-
The energy innovation programs the emerging consensus is calling for should defocus
activity to many diverse nodes at the edge, and nurture bottom-
Such a network-
