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No doubt, then, new funding for research will be critical to the search for low-carbon technologies. Somewhat overshadowed in the stimulus bill is the $1.6 billion increase for basic science at the DOE. Even more encouraging, the legislation included $400 million to start up and fund the Advanced Research Projects Agency-Energy (ARPA-E), an office designed to mimic the success of the original ARPA program that pioneered such breakthroughs in information technology as the precursor to the Internet. Programs like ARPA-E, which emphasizes government and industry research on high-risk programs, are likely to yield significant advances. It’s also encouraging that in his recent 10-year budget plan, President Obama proposed almost $75 billion for a permanent R&D tax credit to stimulate private funding of research.

The money is welcome to many in the research community, especially after years of declining federal and private support (see “Energy R&D Slowdown”). But the new emphasis on energy R&D is also a stark reminder that, almost 30 years after such funding peaked in the late 1970s, there are still no good or easy answers when it comes to replacing fossil fuels. Recent statistics from the DOE’s Energy Information Administration reflect the lack of progress: coal-fired power plants still supply the overwhelming bulk of the nation’s electricity, while solar, wind, and geothermal together provide about 2 percent (and most of that comes from wind power). There is little, if any, sign that the green economy has even begun to sprout.

Congress and the president were, arguably, right to attempt to revitalize energy research and to link technology spending to the long-term objective of transforming the country to a clean-energy economy. Including R&D and other technology programs in the stimulus bill makes evident to the public what every economist knows: long-term economic growth depends on innovation and technological progress. Most important, it has once again established energy research and the search for cleaner power as a national priority.

But including so much technology spending in the stimulus bill also brings dangers. Technology–more specifically, technological progress–can save the economy. A cleaner energy infrastructure will prove invaluable to economic growth in the long term. However, it will take time to realize the benefits. By confusing immediate help for the economy with technology’s role in creating growth, the stimulus bill runs the risk of raising unrealistic expectations that could backfire in the face of inevitably slow progress.

If the transition to a clean-tech economy is ever truly to begin, government policy makers will have to move past politics and get the economics, policy, and technologies right. The way technologies are chosen, implemented, and funded will matter. That means properly designing a carbon pricing program and supporting institutions like the DOE in the expectation that they will make informed decisions and work closely with private investors and venture capitalists to develop the most viable technologies. Perhaps most important, it means that the government will need to support and fund energy research even as the stimulus spending peters out and political support for massive technology funding wanes.

Richard Lester, director of MIT’s Industrial Performance Center and a professor of nuclear science and engineering, seems clearly ambivalent about the merits of the technology funding in the stimulus bill. “Would it be better not to spend the money on R&D? Probably not,” he says, choosing his words carefully. “I just don’t think we should have high expectations.” The difficulty, he says, will be to select the right research projects, given the sudden flood of money. “It would be prudent to expect that a lot of the money will not be well spent,” he says.

Adds Lester: “I don’t think there is an understanding of the scale of the task that lies ahead. This will be a long transformation, and it is going to be very expensive.” The reinvention of the nation’s energy sources, he says, “is inherently a project on the time scale of several decades.”

Read part II, “Chasing the Sun”, which looks at how the stimulus money is being spent on solar power around the country.

David Rotman is the editor of Technology Review.

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Credits: Technology Review, Tommy McCall
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