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The case for energy tech investment

Reproduced from Columbia's Center on Global Energy Policy; Note: The budget for FY21 is not yet finalized. Budgets for FY22-FY26 are the author's proposed funding; Chart: Axios Visuals 

A pair of new reports argue for greatly expanding American research and development into climate-friendly energy tech at a time when the political terrain for big spending increases could soon become more fertile.

Why it matters: Joe Biden is vowing a major investment push if elected and the report could influence the scope and specifics of those research, development and demonstration plans.

  • Also, congressional Republicans are generally more open to R&D funding increases than new climate standards and fossil fuel restrictions (though Biden's platform has those too).

Driving the news: A Columbia University energy think tank is out with a detailed proposal for tripling U.S. "innovation" investment over the next five years to $25 billion and restructuring federal oversight.

  • "U.S. research institutions and private firms are capable of absorbing this scale of federal support and translating it into rapid technological progress — delivering economic returns that far outstrip public investments," it states.
  • However, the U.S. has "neglected energy innovation," per the report from Columbia's Center on Global Energy Policy and the Information Technology and Innovation Foundation.
  • The U.S. spends under $9 billion per year on energy innovation, far less than federal investments in advances in health and defense tech, it says.

How it works: The plan delves into specific agencies and program areas that should receive more money. (The chart above is a highly condensed summary.)

  • Overall, it groups the proposal around 10 "technology pillars," such as clean electricity, advanced transportation, industrial decarbonization, and clean agriculture.
  • It also recommends a presidential directive creating a "National Energy Innovation Mission" and setting up a new White House-led task force to coordinate the increased funding.
  • The Washington Examiner has more on the plan and the political landscape here.

Separately, the Bill Gates-led group Breakthrough Energy commissioned PricewaterhouseCoopers to look at the economic spillover effects of federal R&D investments.

  • Their new analysis examined R&D in health, defense and energy and found substantial economic benefits.
  • "In 2018, public R&D investment directly and indirectly supported more than 1.6 million U.S. jobs, $126 billion in labor income, $197 billion in added economic value, and $39 billion in federal and state tax revenue," it states in calling for higher levels.

Threat level: "Unfortunately, we are falling behind on developing the clean energy technologies we need to get to net-zero greenhouse gas emissions by mid-century," it warns.

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Data: YCharts; Chart: Axios Visuals

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Why it matters: The two yields have been inverted since the beginning of last year, which is historically unusual.

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