Over the past few years, “green jobs” and the “clean economy” have become the growth mantra for a wide variety of energy, climate, and economic policy advocates. Much of this excitement has been productive and justified, but some of it has been misinformed. Few reports have shed more light on this debate than the new study by the Brookings Institution Metropolitan Policy Program, “Sizing the Clean Economy: A National and Regional Green Jobs Assessment.”

The report offers a plethora of data and analysis, and several commentators have already weighed in with various interpretations (see Bryan Walsh at TIME). But one of the key conclusions worth highlighting is that the driving force behind the U.S. “clean economy” over the last decade has been emerging energy technologies –- not in other “green” sectors related to buildings and home weatherization, energy-saving consumer products, or efficient appliances (as some advocates predicted). In other words, emerging energy technologies appear to have the greatest job and export growth potential, and this carries important implications for U.S. policy priorities — a conclusion recently echoed in Google’s energy innovation report.

Brookings defines the “clean economy” as a very broad range of goods and services that provide environmental benefit, including everything from electric vehicle technologies to organic foods and waste management (see list below). As it explains, the report is “the first study of the U.S. clean economy to provide timely information that is both comprehensive enough in its scope and detailed enough in its categorization to inform national, state, and regional leaders on the recent employment dynamics of the U.S. low-carbon and environmental goods and services super-sector…”

According to the data, the highest job growth and export intensity in the overall clean economy between 2003-2010 was primarily in emerging energy technologies. Out of the 39 measured sectors, the top eight with the greatest relative job growth were all energy-related: wave/ocean power, solar thermal, wind, carbon storage and management, solar PV, fuel cells, biofuels, and smart grid.   In terms of export intensity, seven of the top eight sectors were energy technologies: biofuels/biomass, electric vehicle technology, battery technology, wind, solar PV, and fuel cells. The most export-intensive “category” of sectors was renewable energy technologies, at $64,884 in exports per job, compared to only $20,129 for the aggregate clean economy.


On Friday, the House of Representatives voted on its final version of the 2012 Energy & Water Development Appropriations Bill. In terms of the Advanced Research Projects Agency for Energy (ARPA-E) — the Department of Energy’s flagship energy innovation program — the good news is that advocates were able to boost the budget from $100 to $180 million with a last-minute amendment, which passed by just one vote.

Americans for Energy Leadership was proud to support this effort, joining dozens of universities and high-tech companies in signing a letter supporting ARPA-E. Now we move on to the Senate appropriations bill, where we expect to achieve a larger budget and eventually come out somewhere inbetween the House and Senate version at conference.

Yet even while we “celebrate” salvaging a $180 million budget for ARPA-E in the House, we recognize this amount falls fall short of what ARPA-E needs to achieve its potential.  Indeed, ARPA-E merits a much larger budget for its investments, which can spur the development of entirely new industries and technological breakthroughs, create high-skilled jobs, support small businesses, improve U.S. energy security, and enhance our competitiveness in the advanced energy industry.  As the Information Technology & Innovation Foundation recently concluded in a report, “A Model for Innovation: ARPA-E Merits Full Funding“:


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A few years ago, the high-tech giant Google helped reframe the national energy and climate policy debate when it launched its “RE<C” program, or “renewable energy cheaper than coal.”  The idea was clear: instead of primarily focusing on making fossil fuels expensive through climate policy, Google believed the U.S. should focus on driving down the price of clean energy through technological innovation — ormaking clean energy cheap,” as the Breakthrough Institute puts it.

Today, in the midst of a raging national debate about energy and economic policy, Google took its analysis a big step further by releasing a new report and interactive website that offers one of the most comprehensive assessments ever performed on the economic impact of clean energy technology innovation.

The key conclusion? Achieving breakthroughs in energy technology could have a “transformative impact” on United States, offering major benefits for economic growth, job creation, lower energy costs for American families, and reduced oil consumption and carbon emissions. By 2030, the economic analysis finds that key energy innovations alone could provide the following benefits over business-as-usual:

  • Grow the US economy by over $155 billion in GDP/year
  • Create over 1.1 million new net jobs
  • Save US consumers over $942/household/year
  • Reduce US oil consumption by over 1.1 billion barrels/year
  • Reduce US total greenhouse gas emissions (GHG) by 13%


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As Congress and the American people wonder out loud about the proper way to restore American prosperity and global competitiveness, a growing chorus of industry experts and influential journalists is embracing innovation economics, calling for a reinvigorated national economic policy founded upon research, education, and manufacturing. Fareed Zakaria of TIME Magazine added his considerable microphone to the cause in his column yesterday, reminding readers of the role of technological and commercial innovation in American economic history:

The ecosystem that encourages technological breakthroughs and their application does not develop in a vacuum. It requires great universities, vibrant companies that devote time and energy to research and — yes — large amounts of government funding. The latter may be a controversial topic in theory, but in practice, the rise of technology was clearly fueled by government.

In the rest of the world, the role of the state is not controversial. While Americans continue to debate whether government should have any role in fostering innovation, the fastest-growing economies are all busy using government policy to establish commanding leads in one industry after another. Google’s [Eric] Schmidt points out that “the fact of the matter is, other countries are putting a lot more money into nurturing new industries than we are, and we are not going to win unless we do something like what they’re doing.”

Zakaria cites a report by the Breakthrough Institute to demonstrate the remarkable efficacy of government procurement in the technological innovation process. Following recent pronouncements from the likes of Vice President Joe Biden and Bill Gates, Mr. Zakaria is an encouraging addition to the campaign to renew American prosperity through innovation policies.


Bill Gates, the world’s second richest man and American business magnate, has been using the microphone at several recent events to send a strong and simple message: the U.S. federal government needs to dramatically expand its investment in advanced energy research and development.  As the New York Times reported today via ClimateWire:

At home, the government isn’t doing enough to invest in basic research and development and should more than double it, Gates said. A few good things have been done, including the founding of the Advanced Research Projects Agency-Energy, or ARPA-E. But even that doesn’t get much money and almost had it all cut, Gates said.

Last year, Gates, venture capitalist John Doerr and General Electric CEO Jeff Immelt and a few others founded the American Energy Innovation Council, which lobbied the federal government to spend $16 billion a year on renewable energy development. It didn’t pan out and, in face of a conservative House, probably won’t for a while.

Still, Gates was adamant that research and development can only come from government. He said he’s shocked that there’s virtually no current bipartisan support for it… The energy sector is going to be underinvested in unless the government promotes research and encourages investment by making its policy positions on incentives and regulations clear, Gates said.

Over the last year, Gates has significantly ramped up his energy R&D advocacy.  It began with his winter 2010 TED talk, when he declared that if he were granted “one wish” for the next fifty years, it would be to develop low-carbon energy technology at half today’s price, which he claimed would have the “greatest impact” on the world.

Later in the year, he helped organize a group of CEOs under the  American Energy Innovation Council, which released a report calling on the federal government to increase energy R&D up to $16 billion annually.  This week,  Gates said he was “stunned” that more bipartisan developments haven’t happened on energy R&D, but he was hopeful that progress could be made over the next two to three years: (more…)

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Screen shot 2011-05-04 at 2.21.44 PMIn the high-stakes federal budget debate, getting the facts right is critical.  That is why the Heritage Foundation’s recent error-riddled report — which proposed a near-dismantling of the U.S. energy innovation system — demanded an immediate response, which Americans for Energy Leadership has provided with our colleagues at the Information Technology & Innovation Foundation (ITIF) and the Breakthrough Institute.

Last week, these three organizations released a point-by-point analysis of the inaccuracies and misrepresentations of Heritage’s proposal.  Today, we are releasing a new report on the fundamental misconceptions of Heritage’s approach.

Download: All About the Fundamentals: Three Misconceptions of the Heritage Foundation’s Deficit/Energy Proposal” [PDF]

The report highlights three major problems with the Heritage proposal:

1. The proposal fails to meaningfully reduce the deficit now or in the future.

Even though the proposal advocates cutting DOE research budgets in the name of deficit reduction, the Department of Energy represents a tiny portion of the federal budget and contributes little to the deficit and national debt. Moreover, the proposal fails to distinguish between government spending and productive public investment in science and technology, which drives innovation and economic growth.

2. Heritage fails to understand where technological innovations come from.

Heritage wrongly assumes that “when it comes to energy policy, the free market works” and is best suited to develop new technologies. In fact, the energy sector is anything but free, and has always been characterized by extensive regulations and subsidies, natural monopolies, and other divergences from the free-market ideal held by Heritage. Moreover, Heritage ignores the long history of public support for innovation and assumes the private sector will invest sufficiently in energy innovation. For decades, the energy sector has consistently underinvested in R&D, and market failures plague the energy innovation process at each stage of development, from lab to market launch. There is a broad expert consensus that public investment and public-private partnerships are essential to moving new, innovative technologies into the marketplace.

3. The proposal ignores the immediacy and enormity of U.S. energy challenges.

While Heritage pays lip service to energy security, its recommendations would undermine many of the best efforts underway to achieve it. The Department of Defense has recognized the critical role that innovative clean energy technologies will play in enhancing their strategic and tactical abilities, as well as the nation’s energy security. DOD also views the DOE as a strategic partner in its effort to reduce its own vulnerability from relying on fossil fuels. If Heritage had it their way, DOD would lose a key partner in the long-term effort for greater force effectiveness and security through better energy management.

Download the full report here.

Download the point-by-point rebuttal here.

Last week, the Heritage Foundation released a proposal that would nearly dismantle the Department of Energy in the name of budget deficit reduction. The proposal includes numerous inaccuracies and inconsistencies to justify eliminating programs vital to U.S. energy innovation, economic competitiveness, and national security.

In response, Americans for Energy Leadership joined the Information Technology & Innovation Foundation and the Breakthrough Institute to publish a detailed counterpoint that documents the fundamental inaccuracies of the Heritage proposal.

Download: “Counterpoint: Heritage Foundation Backgrounder” [PDF]
By Matthew Stepp, Alex Trembath, Daniel Goldfarb, Jesse Jenkins, and Devon Swezey

The Heritage proposal calls for: (1) fully eliminating the Office of Energy Efficiency and Renewable Energy, slashing the $3.2 billion budget, and eliminating proposed advanced nuclear energy technology programs from the Office of Nuclear Energy; (2) eliminating the Innovative Technology Loan Guarantee Program and reducing other applied programs like the Office of Nuclear Energy; (3) cutting $1.59 billion from the Office of Science, including the elimination of two of the four Energy Innovation Hubs, elimination of the 46 Energy Frontier Research Centers (EFRCs), elimination of the Workforce Development for Teachers and Scientists Program, and a broad range of other cuts to basic energy sciences; (4) eliminating the power marketing administrations; and (5) cutting the administration’s FY2012 budget request for ARPA-E from $650 million to $300 million.

As the counterpoint memo documents, the justification for this extreme proposal contains numerous inaccuracies and inconsistencies, such as:

  • Heritage cites several ventures as evidence of independent private sector efforts to develop next generation energy technologies that in fact each received public support.
  • The report wrongly suggests that DOE budget expenditures are prime targets for substantial deficit reduction.
  • The report uses out-of-context figures to exaggerate the relative magnitude of DOE’s budget.
  • The report is inconsistent in its support and understanding of the DOE’s role in enhancing energy security.
  • The report assumes a zero-sum competition between government and private investors rather than acknowledging the long and successful history of public-private partnerships.
  • Selective and prejudicial history is applied to suggest that government research has little to no commercial aim or value.
  • The report relies on the unfounded assumption that the private sector is, and should be, largely responsible for energy research, commerce, and infrastructure.
  • Heritage acknowledges the role of government in advancing a national interest not met by the private sector, yet claims that the government is not equipped to do so.
  • Heritage is inconsistent in applying their support or opposition to federal programs supporting clean energy innovation.
  • Heritage wrongly suggests that the private sector invests sufficiently in energy innovation.

For more, download the counterpoint here.

On Saturday, President Obama posted his weekly national address, this time focused on rising oil prices and long-term solutions.  He made a strong call for federal investment in clean energy technology as the most important long-term solution and criticized recent budget proposals that would slash these investments [read transcript]:

Instead of subsidizing yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in clean, renewable energy. In the long term, that’s the answer. That’s the key to helping families at the pump and reducing our dependence on foreign oil. We can see that promise already. Thanks to an historic agreement we secured with all the major auto companies, we’re raising the fuel economy of cars and trucks in America, using hybrid technology and other advances. As a result, if you buy a new car in the next few years, the better gas mileage is going to save you about $3,000 at the pump.

But we need to do more. We need to harness the potential I’ve seen at promising start-ups and innovative clean energy companies across America. And that’s at the heart of a debate we’re having right now in Washington about the budget.

Both Democrats and Republicans believe we need to reduce the deficit. That’s where we agree. The question we’re debating is how we do it. I’ve proposed a balanced approach that cuts spending while still investing in things like education and clean energy that are so critical to creating jobs and opportunities for the middle class. It’s a simple idea: we need to live within our means while at the same time investing in our future.

That’s why I disagree so strongly with a proposal in Congress that cuts our investments in clean energy by 70 percent. Yes, we have to get rid of wasteful spending – and make no mistake, we’re going through every line of the budget scouring for savings. But we can do that without sacrificing our future. We can do that while still investing in the technologies that will create jobs and allow the United States to lead the world in new industries. That’s how we’ll not only reduce the deficit, but also lower our dependence on foreign oil, grow the economy, and leave for our children a safer planet. And that’s what our mission has to be.

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Representative Paul Ryan’s budget proposal [PDF] would cut approximately 85% of federal investments in energy technology research and deployment within three years, from around $7 billion in 2010 to $1 billion in 2014, while retaining billions in subsidies for the oil and gas industry.  As the New York Times reports:

Under the Republican plan, overall discretionary funding for energy programs would fall to about $1 billion per year. President Obama’s 2012 budget, meanwhile, would provide about $8 billion to support clean energy research and deployment.

…Cuts proposed in a short-term spending bill provide further clues as to which specific energy programs are likely to face calls for long-term elimination. The House-passed bill reduces research and development financing for electric car battery technology and charging infrastructure and eliminates loan guarantees meant to encourage clean energy manufacturing.

Production and investment tax credits for wind and solar power, which will lapse in several years, are also probable targets for elimination.

Other energy incentives may go unchallenged, however. Questioned on Fox News on Sunday by Chris Wallace on whether multibillion-dollar subsidies for oil and gas companies would also be eliminated, Mr. Ryan did not give a direct answer.

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As the House GOP leadership proposes a plan to curtail long-term federal investment in strategic research, technology, and innovation, China’s new Five-Year Plan intends to increase the nation’s R&D investment as a percentage of GDP from 1.8% to 2.2% by 2015, an increase of over 22%, while raising its commitment to clean energy technology deployment and manufacturing.

According to Joshua Freed, director of the energy program at the centrist think tank Third Way, the new House budget proposal “protects existing regulated markets and guts innovation — particularly applied research and development that are parts of the valley of death for too many companies — while pulling the rug out from under clean energy deployment”

A new BusinessWeek article, “China Buries Obama’s ‘Sputnik’ Goal for Clean-Energy Use,” notes the following:

“They intend to leapfrog the U.S. in these technologies,” Will Coleman, a partner at Menlo Park, California-based Mohr Davidow Ventures, told the Senate Energy Committee on March 17. “If we don’t move forward urgently, I’m concerned that we will not only cede the current opportunity, but we’ll lose the knowledge and the experience necessary to compete.”

…After the Soviet Union in 1957 launched the beach ball- sized Sputnik, the first man-made satellite, President Dwight Eisenhower set up the National Aeronautics and Space Administration to energize the space program and take the lead from the Soviets. President John F. Kennedy set the goal of landing a man on the moon, and by 1965 NASA’s annual budget reached the equivalent of $37 billion in 2011 dollars.

China will invest about twice that in clean-energy projects each year for a decade in a 5 trillion-yuan program aimed at steering the economy away from fossil fuels, under a five-year plan announced last month. CDB loans are expanding the manufacturing base, driving down the cost of the renewable- energy equipment it exports.

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