July 6, 2006

U.S. INFO: Seeking Money to Accelerate Energy Innovation



The following article appears in the July 2006 issue of the State Department's electronic journal series Economic Perspectives. The complete issue, titled Clean Energy Solutions, can be viewed on the USINFO Web site.

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Aid Urged for Commercializing Clean Power-Generation Technologies

Unprecedented, massive innovation must take place to develop, commercialize, and bring to market and large-scale deployment low-carbon technologies that will revolutionize the world.

Moreover, today’s energy and climate policies alone cannot drive clean energy markets at the scale or pace necessary to solidify energy security and stabilize the climate by 2050. We must be more creative in deploying new innovation strategies for all these low-carbon options. Also, current structures for financing and commercializing innovative technologies are failing to deliver these much-needed, low-carbon technologies to market.

Only by simultaneously tackling the twin challenges of accelerating the pace of low-carbon technology innovation and creating broad-scale financing and commercialization can we achieve a planetary energy transformation.

Cellulosic biomass and biofuels: As interest in the production and use of biofuels rises, there is more use of biomass technologies, such as anaerobic digesters and gasifiers, to make power from crops, crop waste, and manure. However, the bioenergy market is relatively nascent and has a way to go to reach the point that signals the rapid and widespread adoption of biomass and biofuels technologies. Further, from a low-carbon perspective, it is widely recognized that using cellulosic (plant-based) biomass is preferable to growing dedicated crops, such as maize, to produce biofuels because harvesting and transporting the dedicated crops increases carbon dioxide emissions. Genomics research may be critical to advance this technology, but it has yet to be harnessed to develop and commercialize high-energy-producing biofuels and energy systems.

To achieve a transformation... several changes must take place:

-- Of the utmost importance, the government, academia and the private sector should coordinate research and development (R&D) with deployment and technology commercialization, rather than treat R&D as a sole area of focus.

-- Debate on low-carbon technologies should take place at various levels (international, sub-national) and within many frameworks for sub-national stakeholders, as well as the United Nations Framework Convention on Climate Change and the G8 Dialogue on Climate Change, Clean Energy, and Sustainable Development.

-- The task of reducing carbon emissions on a global scale should be distributed to all levels of the public and private sectors. This would open the door to the kind of creative problem solving that would address market shortcomings, promote low-carbon technology transfer and information sharing, foster linkages among disciplines, and produce real results.

-- Energy finance must shift aggressively toward new forms of capital accumulation to build the low-carbon energy infrastructure of the future.

-- The G8 investment framework and other forms of international collaboration must answer broader questions on technology innovation and commercialization. Gaps in the innovation chain must be filled in order to shift to low-carbon technologies in both industrialized and developing countries. To produce results, this must be coupled with a significant expansion of resources and distinct budgets. Public-private partnerships need to make it a top priority to accelerate the pace of low-carbon technology innovation and adoption.


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