Energizing America - Columbia

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“A plan to make the United States the world leader inclean energy innovation and rise to an existentialchallenge—creating exciting new jobs along the way.—John F. Kerry, 68th US Secretary of StateEnergizingAmerica”A Roadmap to Launch aNational Energy Innovation MissionVarun Sivaram, Colin Cunliff, David Hart,Julio Friedmann, and David Sandalow

EnergizingAmericaA Roadmap to Launch aNational Energy Innovation Mission

Copyright 2020 by the Columbia University SIPA Center on Global Energy PolicyAll rights reserved. This publication may not be reproduced in whole or in part, inany form beyond the reproduction permitted by Sections 107 and 108 of the U.S.Copyright Law Act (17 U.S.C. Sections 107 and 108) and excerpts by reviewers forthe public press, without express written permission from the Columbia UniversitySIPA Center on Global Energy Policy.Library of Congress Control Number: 2020917122ISBN: 978-0-578-75852-7ABOUT THE CENTER ON GLOBAL ENERGY POLICYThe Columbia University SIPA Center on Global Energy Policy provides independent,balanced, data-driven analysis to help policymakers navigate the complex world ofenergy. We approach energy as an economic, security, and environmental concern.And we draw on the resources of a world-class institution, faculty with real-worldexperience, and a location in the world’s finance and media capital.For more information, please visit www.energypolicy.columbia.eduABOUT THE SCHOOL OF INTERNATIONAL AND PUBLIC AFFAIRSThe mission of the Columbia University School of International and Public Affairs(SIPA) is to empower people to serve the global public interest. Our goal is tofoster economic growth, sustainable development, social progress, and democraticgovernance by educating public policy professionals, producing policy-relatedresearch, and conveying the results to the world. Based in New York City, witha student body that is 50 percent international and educational partners in citiesaround the world, SIPA is the most global of public policy schools.For more information, please visit www.sipa.columbia.edu

EnergizingAmericaA Roadmap to Launch aNational Energy Innovation MissionVarun Sivaram, Colin Cunliff, David Hart,Julio Friedmann, and David Sandalow

CONTENTSForewordxExecutive Summary1PART IThe need to increase federal investment in clean energy innovation1. Clean energy innovation: an essential national priority2. How federal investment accelerates energy innovation3. Lessons from previous US national innovation missions4. 25 billion by 2025: An ambitious and achievable target1113213543PART IIA National Energy Innovation Mission5. Ten technology pillars6. Six strategic principles7. Three immediate recommendations51537393AppendicesA. Proposed Presidential Policy DirectiveB. Current and Proposed Funding Levels105105109References127List of Abbreviations158Acknowledgments164About the Authors165

xForewordInnovation is key to combating climate change, achieving a more secure andclean energy future, and maintaining American leadership in the growingenergy industries of tomorrow. Today, the prospects for decarbonizing thepower sector in the rapid timeframe climate change requires are far brighterbecause of dramatic cost declines in wind and solar power and battery storagecapacity over the past decade, which in turn have expanded new industriesand created economic opportunity.According to the International Energy Agency, however, half of thecumulative reductions needed to achieve net-zero emissions by 2050 stemfrom technologies that are not commercially available today. Even withwidespread electrification of certain sectors, such as passenger transportor heating, and dramatic increases in renewable energy to generate thatelectricity, so-called “hard-to-abate sectors,” such as heavy-duty transport,shipping, aviation, and heavy industry, will likely require a broader suite ofdecarbonization technologies. New and improved technologies will also beneeded to decarbonize the massive energy infrastructure that already exists.The case for government investment in research, development anddemonstration (RD&D) is clear. Because private firms cannot capture thefull social value of their innovations, they underinvest relative to the benefitsto society. Along with strong climate policy to set limits on carbon pollution,federal RD&D investments could be a catalyst to propel US innovationforward at the rate needed to outcompete rivals, bring clean energytechnologies to market faster, and confront climate change. In the past, thefederal government has too often neglected energy innovation, investing lessthan a quarter of what it invests in health innovation and less than a tenth ofwhat it invests in defense innovation.Although the case for energy innovation is clear, the question for policymakersremains: how best to accomplish it? If an administration or Congress soughtto “go big” on clean energy innovation, how would it best spend those dollars,taking advantage of the lessons from past experience? What stages of researchshould policymakers invest in? Which technologies will yield the best results?How should the federal government structure itself to deploy those fundsEnergizing America

xiForewordmost effectively, across the national laboratories, America’s great universities,and partnerships with the private sector?Roughly one year ago, I identified these as key questions that would benefitfrom further analysis and research, ahead of the next administration andCongress taking office in 2021. Consistent with the mission of the Center onGlobal Energy Policy to advance smart, actionable, and evidence-based energyand climate solutions through research, education, and dialogue, our goal inundertaking this work was to provide a roadmap for energy innovation thatwould be useful to policymakers in the formats and timeframes they need.Energizing America is the result of that effort and offers the next administrationand Congress a strategic framework to triple US annual investment in energyinnovation over the next five years, including detailed funding proposalsacross the full spectrum of critical energy technologies and recommendationsfor immediate implementation. I was thrilled we could recruit Dr. VarunSivaram to Columbia University’s Center on Global Energy Policy to work onthis project with David Sandalow and Dr. Julio Friedmann, in collaborationwith Dr. Colin Cunliff and Dr. David Hart from the Information Technologyand Innovation Foundation (ITIF). I would like to thank them for theirtremendous work on this important project and for producing such anexcellent and valuable report.The spectacular success driving down the cost of renewable energy, alongwith the increasing sense of urgency around climate change and clean energyinvestments in multiple government stimulus plans around the world, shouldgive us optimism about the outlook for low-carbon technologies. At the sametime, much more work is required to bring many other sustainable energytechnologies to market and to scale, and to ensure clean energy technologiesare deployed in ways that promote a just and equitable energy transition.We hope you enjoy Energizing America and that it contributes to fosteringdialogue and understanding on these urgent questions of how to better builda more prosperous, secure and sustainable global energy system.Jason BordoffFounding Director, Center on Global Energy PolicyEnergizing America

1EXECUTIVE SUMMARYClean energy innovation is central to the fight against climate change. Thedramatic success in lowering the costs of solar panels and wind turbinesin the past decade must be replicated across a wide range of other energytechnologies. Doing so will open extraordinary economic opportunities.To rise to this challenge, the United States should launch a National EnergyInnovation Mission. Led by the president and authorized by Congress, thismission should harness the nation’s unmatched innovative capabilities—atresearch universities, federal laboratories, and private firms (both large andsmall), in all regions of the country—to speed the progress of clean energytechnologies. To jumpstart this mission and unlock a virtuous cycle of publicand private investment, the US federal government should triple its fundingfor energy research, development, and demonstration (RD&D) over the nextfive years.Although a growing bipartisan chorus is calling for more ambitious publicinvestment in clean energy innovation, no detailed roadmap exists for howCongress and federal agencies can most effectively increase funding. Thisvolume aims to fill that gap. We offer policymakers a strategic framework tobuild a growing RD&D portfolio over the next five years, detailed fundingproposals across the full spectrum of critical energy technologies, andrecommendations for immediate action. In making these proposals, we havesurveyed the scholarly literature, distilled decades of US historical experience,Energizing America

2Executive Summarydrawn on dozens of legislative proposals, and assembled the most up-todate database of federal clean energy RD&D funding to derive lessons formaximizing the return on public investment.This volume has two parts. Part I makes the case that the federal governmentshould dramatically increase funding for clean energy innovation. Part IIprovides a detailed roadmap for doing so.Part I: The need to increase federal investment in clean energyinnovationLeading the world to a clean energy future is in the US national interest.Unchecked climate change endangers our security, economy, and well-being.The devastating hurricanes and wildfires of recent years are a grim foretasteof a warmer future. Although the global slowdown from COVID-19 loweredgreenhouse gas emissions, they are already surging back as the world economyrecovers. Averting catastrophe will require new and improved clean energytechnologies to enable the world to reach net-zero emissions in the comingdecades, a herculean task known as “deep decarbonization.”The United States also stands to prosper by seizing the opportunity to leadthe low-carbon industries of the future. Around the world, countries areeagerly investing in clean energy—to cut air pollution, reduce dependenceon imported fossil fuels, and fight climate change. Today, China is the worldleader in deploying clean energy technologies and invests heavily in cleanenergy innovation. The United States—with the world’s best and largestinnovation system—could lead the world in clean energy innovation in thedecades ahead, but not without commitment and effort.Federal funding is critical to US energy innovation. Emerging clean energytechnologies face steep barriers to market success. Risk-averse incumbentfirms, byzantine regulations, and the inertia of existing infrastructure andsubsidies built around fossil fuels can sink even the most promising ventures.It will take strong and sustained public RD&D investment to stimulate themassive private investment needed for deep decarbonization. Such publicfunding could complement near-term stimulus measures to help the economyrecover from the COVID-19 crisis. RD&D investments should be pairedwith policies to support the market deployment and export of clean energyEnergizing America

Executive Summary3technologies, so that innovative energy industries of the future sustain longterm prosperity and inclusive economic growth.The National Energy Innovation Mission would open a new chapter inthe storied history of US innovation. Federal funding has accelerated thedevelopment of life-saving drugs, modernized the military’s arsenal, and puta man on the Moon. These past missions have helped make the United Statesthe world’s science and technology superpower.By comparison, the federal government has neglected energy innovation.Prior surges in federal energy RD&D spending have been short-lived, andrecent funding increases have been tepid. Today, the federal governmentinvests less than 9 billion per year on energy innovation, less than a quarterof what it invests in health innovation and less than a tenth of what it investsin defense innovation. The United States remains well short of meeting itsinternational commitment under the 2015 Mission Innovation compact todouble public funding for RD&D to 12.8 billion by 2021.This should change. The federal government should elevate energyinnovation as a core national priority and fund it accordingly. Over the nextfive years, annual public funding for energy innovation, across a range offederal agencies, should triple to 25 billion. A wealth of research showsthat US research institutions and private firms are capable of absorbing thisscale of federal support and translating it into rapid technological progress—delivering economic returns that far outstrip public investments.Part II: A National Energy Innovation MissionFederal policymakers should develop a strategy for ramping up federal fundingto most effectively invest in clean energy innovation—and take swift action toset this strategy in motion (Figure ES-1). To prioritize funding, they shouldbuild RD&D programs around ten technology pillars, each representinga critical challenge for deep decarbonization. In addition, as policymakersdesign and execute these programs, they should heed six principles thatwill maximize the effectiveness of federal investments. And following theinauguration in 2021, the next Congress and administration should takethree immediate actions to launch the National Energy Innovation Mission.Energizing America

4Executive SummaryFIGURE ES-1: Strategic and tactical guidance to the nextadministration and CongressTechnologyPillarsFoundational1 science & platformtechnologieselectricity2 CleangenerationAdvanced3 ctionsMatch the fundingto critical1 portfoliodecarbonizationneedsSupport all stages2 of the innovationpipeline1 The Presidentshould launch theNational EnergyInnovation Mission4 Clean fuelse