Berkeleyan

Meaningful support of energy R&D, spread across various federal agencies, would represent no more of a commitment by the government than it has expended on behalf of the Apollo program, the Manhattan Project, or the Iraq war.

Investment in energy R&D declines despite supply problems
Increased funding could stabilize carbon levels while stimulating employment and the economy

By Robert Sanders, Public Affairs | 29 September 2005

At a time of soaring gas prices, public concern over U.S. dependence on foreign oil, and mounting evidence of global warming, the nation's investment in energy research and development (R&D) is declining, say two Berkeley researchers.

In a paper in the journal Issues in Science & Technology, Professor Dan Kammen, co-director of the Berkeley Institute of the Environment, and doctoral student Greg Nemet use data on patents, federal and industry spending, and emerging venture-capital funds to examine the relationship between federal investment and innovation. The statistics they marshal show that investments in energy R&D by both the federal government and private business have declined significantly since the 1980s.

Despite the current administration's expressed concern about the nation's energy problems, the 2005 federal budget reduced energy research and development by 11 percent below the 2004 level, Kammen and Nemet note. Equally worrisome is the 50-percent decline in U.S. companies' investments in energy R&D between 1991 and 2003.

"Energy issues facing the country warrant a massive increase in energy spending, and our findings indicate that this can be done while bolstering the economy," said Kammen, who will present his results at a Capitol Hill briefing later this fall.

Dan Kammen

"An increase in federal energy-R&D spending by a full factor of 5 to 10, or from $3 billion to $15 billion or $30 billion, would act as an economic and employment stimulus package," Kammen continued. That would not be the only benefit of such investment: Using emissions scenarios from the Intergovernmental Panel on Climate Change, Kammen and his co-author estimate that energy-R&D spending at that level would be sufficient to stabilize atmospheric carbon-dioxide levels at twice the levels of pre-industrial times.

Such an increase would be "a small investment in our future that [would] contrast dramatically with the hundreds of billions we are spending fighting wars over oil or addressing the early effects of global warming," Kammen concludes.

Kammen and Nemet show a correlation between declining energy-R&D funding and fewer energy patents filed, arguing that successful patents are a good indication of the state of innovation in the United States. Citations of federal energy patents also are declining, indicating a lack of development of government-sponsored inventions as innovation in private energy companies declines.

"In the private sector, U.S. energy companies could increase their R&D spending by a factor of 10 and still be below the average R&D intensity of U.S. industry," the authors note, pointing out that research and development in the pharmaceutical industry, for example, is more than 10 times that in the energy industry. "Past experience indicates that this investment would be repaid several times over in technological innovations, business opportunities, and job growth."

Kammen and Nemet argue that a five- to tenfold increase in federal investment in energy R&D is feasible, based on a comparison with previous intensely capitalized government programs, such as the Manhattan Project, the Apollo Program, and today's War on Terror. They recommend that such funding be spread throughout the federal budget, across government agencies, with the new funding made available for a range of programs prioritized by their impact on national energy security, job creation, and environmental protection.

"The nation's ability to respond to the challenge of climate change and to the economic consequences of disruptions in energy supply has been significantly weakened by the lack of attention to long-term energy planning," they write. "The current energy bill is a collection of subsidies without any such vision."

In addition to co-directing the Berkeley Institute of the Environment (bie.berkeley.edu), Kammen is the founding director of the Berkeley-based Renewable and Appropriate Energy Laboratory (socrates.berkeley.edu/~rael), where copies of this paper and the laboratory's other publications are available for download. Kammen is the Class of 1935 Distinguished Chair in Energy and a professor in the Energy and Resources Group and in the Goldman School of Public Policy.