This is How the Government Can Ramp Up Climate Tech Investment

(Bloomberg) -- The last couple of weeks have brought a steady stream of new pledges to achieve net-zero carbon emissions within the next handful of decades. China committed to it; so did Walmart Inc. And yet a report released last month by the International Energy Agency, which advises governments on energy policy, estimated that roughly half of the technologies that will be needed to get us to net zero globally by 2050 aren't even commercially available yet. Yikes.

The dirty secret of deep decarbonization is that it won't occur from just plugging into a wind farm or buying carbon offsets in a tropical forest. Without new technologies, it will be impossible to rein in emissions from the most-carbon intensive sectors of the economy such as heavy industry and long-distance transport.

Varun Sivaram, a physicist and clean energy expert, has a plan for how the next president can quickly speed up government energy innovation. Currently a senior research scholar at the Center on Global Energy Policy at Columbia University, he teamed up with colleagues to write, “Energizing America: A Roadmap to Launch a National Energy Innovation Mission.”  The book, which came out in September, details down to the budget line item exactly how much money America should spend and how it should spend it.

“Innovation isn't one of the things we need to do to tackle climate change. It is half the game,” he said in a recent interview. “If we drop the ball on this one, we are lost.”

The first step, as Sivaram and his colleagues see it, is for the next president to establish a National Energy Innovation Mission and create a White House Task Force to coordinate spending across different federal agencies. Sivaram and his team include a draft executive order in the report so the next administration can just plug and play.

Step two is to ramp up spending on energy innovation research and development from the current rate of about $9 billion a year to at least $25 billion by 2022. Sivaram calls that number “very feasible,” explaining that it is “less than a quarter of what the government invests in health innovation and less than a tenth of what it invests in defense innovation.”

But the most interesting part of the report is how it proposes spending the $25 billion. The plan breaks down decarbonization into 10 categories where breakthroughs must occur. These include clean fuels, clean agricultural systems, carbon capture use and sequestration, and carbon removal. Identifying these categories is key because it allows for the next step: matching money to the need.

One of the most persuasive moments in the report comes in a chart showing the disconnect between the sectors in the U.S. responsible for emissions and the corresponding research budget through the Department of Energy. Electricity produces 27% of emissions but gets 47% of the research dollars, while industry produces 22% of the emissions but receives 6% of the innovation funding.

The Columbia team's budget would remedy that by adding money to underfunded areas, like tripling the money for carbon capture from $115 million a year to $300 million. Sivaram points out that carbon capture—the process of trapping and storing the gas so it doesn't leak into the atmosphere—offers a perfect example of how these research dollars will not only promote needed technology but will also bolster emerging industries with high-paying jobs. 

“Carbon capture is an area where America is ahead,” he said. “The technology is not set. This is a sweet spot where we can compete internationally on something that is hard to abate and also nurture a domestic industry.”

Sivaram says one of the most exciting thing about releasing the report is the positive reception it has received on Capitol Hill—from Democrats and Republicans alike. He said that, in fact, Democratic staffers (he wouldn't specify the chamber or committee) have asked to see the Excel sheets behind the budget numbers. But still he's concerned that it won't be enough.

“I am worried that energy innovation will get lost in a cacophony of demands,” he said. “Innovation is not just one of a laundry list of items that need to get done. It is foundational.”

©2020 Bloomberg L.P.