Transatlantic Landscape for Energy Innovation and Cooperation
A. Existing Support
Energy Independence and Security Act of 2007 was already an important driver of clean transportation fuels and energy efficiency measures. Fuel ethanol plants have now evolved through several stages of design resulting in substantial improvements in efficiency while economizing on resources such as energy and water use.
In the stimulus bill Congress extended the production tax credit for 4 years for wind and 5 years for solar renewable energy. We understand that these are not easily used as income offset in a recession. The Treasury will monetize these credits according to the American renewable energy association.
B. Cap and Trade
The President’s commitment to cap and trade program to reduce greenhouse gas emissions is a huge driver for energy innovation in the United States. It is a market mechanism that gives all businesses the incentive to use their ingenuity to develop economically effective solutions to climate change including energy efficiency, renewable energy, smart grid and clean coal. The Waxman-Markey bill is one approach. US focused cap and trade initiatives and earlier carbon-market programs in Europe will be part of an overall learning and adjustment cycle. The World needs a number of such regional incubators to see what would be useful for other parts of the globe.
A portion of cap and trade auction receipts ($15 Billion per year for ten years) should be used to support the development of clean energy and energy efficiency for commercial application.
Finally, the President’s Economic Stimulus Bill provided $80 billion of new spending and loan guarantees to accelerate Clean Energy Transformation.
President supports a green recovery and conversion of our manufacturing centers into clean technology leaders. American companies and workers should build the high-demand technologies of the future. A federal investment program will help manufacturing centers modernize and help American workers learn new skills to produce green products.
President wants to invest in developing advanced vehicles and put 1 million plug-in electric vehicles on the road by 2015.
President wants to triple our share of electricity (to 10 percent) coming from renewable energy by 2012.
He wants to ensure that clean coal technology becomes commercialized. The Administration will provide incentives to accelerate private sector investment in commercial scale zero-carbon coal facilities. DOE must enter into public private partnerships to develop 5 first of a kind commercial scale coal-fired plants with carbon capture and sequestration.
2. How can we achieve transformational technological change?
No one doubts that to meet the challenging goals of GHG emission reductions that President Obama has set for the US, we will need to achieve transformational technological change for energy production and use. We will also need to find good ways to see that this clean energy technology is diffused around the world.
A. Methods of Cooperation for Innovation Process
One strong message that came out of the Washington International Renewable Energy Conference last year is that there needs to be more international cooperation in research and development of renewable energy. Expertise varies between countries with Iceland strong in geothermal questions or Brazil in biofuel development and use. The positive interactions at WIREC among the public and private sectors and the research community demonstrated a commitment to use existing and new avenues of collaboration in order to accomplish this.
One promising model for US-European clean energy research cooperation is NUCORE. US scientists and government officials have spoken with scientists from the Nordic countries, that are highly advanced in energy innovation technologies to map out a plan for cooperation this spring in areas of mutual interest. They also discussed the training of students and research scientists on renewable energy within the NUCORE umbrella and involving students and scientists from developing countries. So part of the R&D activities between US and Europe could be directed towards training and education.
National Laboratories can be an important source of international cooperation on clean energy innovation. NREL has done solar and wind mapping for the United Nations Environment Program. Pacific Northwest laboratories are working with China on energy efficiency in buildings. Lawrence Berkley Lab is developing demand side management programs in India. Nevertheless, these labs are constrained by meager funding for international projects.
For diffusion the US has used effectively a program, the Asia Pacific Partnership for clean energy and climate to transfer clean technology to India and China leveraging investments with other donor countries and private sector partners.
B. Subjects of Innovation or the Direction of R&D
I would like to ask you, are there particular technologies in clean energy or energy efficiency that are ripe for US-EU cooperation in the light of new U.S. steps to speed energy innovation and the context of the race to Copenhagen UNFCCC meeting?
Already Energy Commissioner Piebalgs and Energy Secretary Chu have exchanged letters on how we might cooperate on energy innovations.
It appears there is some interest for the EU TREN and US DOE to cooperate on energy efficiency (buildings and appliances); renewable energy sources (notably biomass); sustainable biofuels; carbon capture and storage (including geological and cooperation with India and China); energy security and smart grids.
This complements a new road map for EC DG for R and D cooperation with DOE on technologies for solar power, hydrogen and fuel cells, biofuels and CCS.
C. Avoiding Trade Barriers
As the US and EU take steps to reduce GHG emissions and encourage clean energy technological development US and EU business will have a great need of discussion to advise governments on how to avoid non-tariff barriers on products like bio-diesel.
The clear alternative is for all of us to redouble our efforts in the Global Bio energy partnership (GBEP) a 20 nation creature of the G-8, to reach a common understanding of the criteria and indicators for the sustainable production of bio fuels.
Tariff barriers could be reduced or eliminated on a whole host of clean energy technologies to spur the diffusion of innovations. Some may wish to ask whether there are dual use technologies that have export controls?
World leaders will need to design a post 2012 framework for climate change that does not encourage capital migration and job loss. My personal opinion, new carbon tariff barriers are not the answer.
In the past we have pursued US-EU energy innovation questions in the Strategic Energy Review and the High Level Discussion of Climate and Clean energy. Are these mechanisms still appropriate fora?
The US and EU should commit to continual innovation in our energy sectors. The US and Europe should additionally be committed to working with other nations to ensure that clean technologies can be adapted quickly and appropriately in the world.
Transatlantic Energy Innovation Roundtable