By Jesse Jenkins and Yael Borofsky, originally at the Breakthrough Institute
The latest draft of the Kerry-Boxer "Clean Energy Jobs and American Power Act" would invest less than $10 billion of the bill's nearly $80 billion in annual cap and trade allowance revenue in clean energy technology, assuming EPA-projected allowance prices (note: all figures in 2009 constant dollars).
Over a range of likely allowance prices, the bill's clean energy investments could total as little as $8.6 billion and as much as $15.4 billion annually, a fraction of the at least $30-80 billion annually advocated by the Breakthrough Institute and an investment level dwarfed by the $44-66 billion annually China plans to invest in clean energy industries, infrastructure and technology over the next ten years (see graphic below).
Investments in the kind of clean energy research and development critical to make clean energy cheap and develop the low-cost, commercial clean energy technologies needed to drive deep emissions cuts and secure America's energy independence at an affordable cost will receive just $1.2-2.2 billion annually, over a range of likely allowance prices. That's just $200 million more than the House-passed Waxman-Markey "American Clean Energy and Security Act" (ACES) would invest in R&D at EPA-projected allowance prices. While this is a (very) small step in the right direction, the clean energy R&D investments in Kerry-Boxer still fall far short of filling the massive energy innovation gap and would boost R&D spending by as little as one-tenth of the $15 billion annually advocated by President Barack Obama - as well as a broad range of energy innovation experts, including a recent report by the Breakthrough Institute and Third Way. Funding for R&D under CEJAPA will be about a quarter to half as much as investments currently being made by the economic stimulus package, ARRA.
With more revenue devoted to ensuring deficit neutrality in the Senate bill, total investments in clean energy technology, broadly defined, are actually $1.2 billion less in Kerry-Boxer than in Waxman-Markey, at EPA-projected prices.
As the graphics below illustrate, the Kerry-Boxer climate and energy bill does not invest nearly as much as numerous experts have deemed necessary to make clean energy cheap and put us on the path to the clean energy economy, of which President Obama so eloquently speaks. Nor will this level of investment be sufficient to keep the U.S. competitive with Asian and European competitors, particularly China, who are surging past the United States with major direct investments to support their emerging clean energy technologies and industries.
The first graph focuses on investments in clean energy R&D, only. The second depicts investments in clean energy technology, broadly defined.
How do you think this draft of CEJAPA stacks up?
(click any of these to enlarge...)
Sources and Notes:
[1] See "Kerry-Boxer Climate Bill Allowance Allocation Breakdown," Breakthrough Institute (Oct. 26, 2009).
[2] See "Investing in the Next Generation of Energy Technologies," WhiteHouse.gov. President Obama pledges to "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy."
[3] See "Jumpstarting a Clean Energy Revolution with a National Institutes of Energy," Breakthrough Institute and Third Way (Sept. 2009)
[4] See "34 Nobel Prize Winners Write President Obama Urging Support for Clean Energy R&D," Breakthrough Institute (July 2009)
[5] See "Top Energy Scientists Call for $30 Bi Annual Investment in Clean Energy," Breakthrough Institute (Dec. 2007). Call for $30 billion in clean energy technology RD&D investments
[6] See "Energy Discovery-Innovation Institutes: A Step toward America's Energy Sustainability," Brookings Institution (Feb., 2009).
[7] See "Budget and Performance," U.S. Department of Energy.
[8] See "Detailed Summary of Energy Investments in Stimulus," Breakthrough Institute (Feb. 2009).
[9] See "R&D in the FY2009 Budget," American Association for the Advancement of Science (March 2009).
[10] See "New Apollo Program," Apollo Alliance (March 2009).
[11] See "Fast, Clean, & Cheap: Cutting Global Warming's Gordian Knot," Harvard Law and Policy Review. Breakthrough Institute (Jan. 2008).
[12] See "China's Big Plan to Win the Clean Energy Race," Breakthrough Institute (July 2009)
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