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Between innovation and industrial policy: how Washington succeeds and fails at renewable energy
Abstract
During its eight years in office, the Obama administration undertook an ambitious effort to transition the US economy towards the use of renewable energy technologies, and promote American leads in the global ‘cleantech’ industry. While many of the strategies selected to achieve these goals rendered positive results, others proved unproductive and/or politically toxic. Approaching the issue from a critical innovation framework (which focuses on the political and economic conditions under which the federal government is best able to promote technological change), this paper argues that the administration ignored some of the key conditions that have historically allowed Washington to succeed in promoting the uptake of new technologies. The paper describes the nature of these mistakes, and suggests an alternative way forward based on historical precedent.
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The Energy Information Administration (2009) evaluated the Recovery Act in terms of a counterfactual assuming no new clean energy policies. The evaluation found that the emission outcome greatly outpaced what would have been expected in the absence of the Act's investments.
Solar cells have traditionally been made from very low-grade ingot that does not meet the standards for producing computer chips. Thus, the relatively small quantity of rejects from the computer industry was typically used in the production of solar cells. As solar cells became more popular throughout the 1990s, this low-grade ingot fell into short supply, and the price subsequently soared, damaging the prospects for solar.
This is not to say that the military is uniquely ‘good’ at innovation or that it is the most efficient or desirable institution with which to pursue technological progress. The point developed here is that the reason for its tremendous historical success has much to do with the unique political and financial capacity that it maintains.
Acknowledging the extent to which the military could prove an exceptionally powerful force in developing renewable technologies, many GOP law-makers and Democrats from coal states have resisted military efforts to develop such technologies. In arguing for a halt to the military's shift to the use of biofuels, Senator James Inhofe (a notorious climate skeptic) lamented that President Obama had found in the military ‘the one place where he can force [his renewable energy agenda] to happen’ (Service, 2012).