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President Obama didn’t say much about climate change during his campaign—except to declare that it isn’t a hoax. But he made clear in his acceptance speech this morning that addressing the issue will be a priority: “We want our children to live in an America that isn’t burdened by debt, that isn’t weakened by inequality, that isn’t threatened by the destructive power of a warming planet.”

Given the fact that, in his first term, Obama was stymied in his attempts to deal with climate change through a cap and trade program or a clean energy standard that would require the use of low carbon electricity, what can he do now? The main sticking point with limits on carbon dioxide is the fact that right now, we don’t have technologies that can step in to replace fossil fuels at anywhere near their scale and cost. Getting to the point that alternatives can compete with fossil fuels—if indeed that’s possible given the limitations of renewable sources of energy and the high cost of nuclear power—will require both focused research and almost certainly some sort of government role in helping to demonstrate promising technologies at a large scale.

It looks likely that Obama can get Congressional support for the research side of things. If he wants to encourage large-scale demonstrations, though, he may continue on his current path of skirting Congress and creating a market for low-carbon energy via the Environmental Protection Agency.

Let’s take the research side first. To start cutting into the national debt, the other goal Obama cites in the quote above, Congress needs to find ways to greatly cut back spending. But in the middle of this, two innovative research programs have managed to continue to secure funding. The Advanced Research Projects Agency for Energy gives focused three-year grants to researchers and companies to quickly demonstrate, at a relatively small scale, whether a promising idea has a chance of commercial success. If researchers think a given combination of battery electrodes might yield a high energy battery for electric vehicles, for example, an Arpa-e grant would give them a chance to build a complete, large scale battery cell and make the discoveries needed to make it work, as happened with Envia Systems, which demonstrated a battery cell that stores about three times as much energy as the batteries used in electric cars now.

The other key new program, something proposed and championed by energy secretary Steven Chu, is the Innovation Hub program. Each hub is focused on a goal, such as making fuels for vehicles using water, air, and energy from the sun. These hubs combine basic research with applied research—in the case of the solar fuels hub, it quickly takes promising new catalysts and other materials from labs and puts them into prototypes (see “Artificial Photosynthesis Effort Takes Root”).

Many experts believe the U.S. needs to spend far more on energy research than it does now. But such programs are a clear positive step.

Yet even if these programs yield highly promising prototypes, companies will need to learn to manufacture them at large scale. Without some sort of government direction, there’s little incentive for utilities to switch away from fossil fuels, even if the alternatives could be economically competitive. A utility’s first responsibility is to keep the lights on, and that often means sticking to the tried and true technologies. Congress is unlikely to fund large technology demonstrations after high profile failures such as Solyndra, whose large, government funded solar panel factories couldn’t compete with conventional solar panel factories in China. And venture capitalists are shying away from financing clean technology, too, as they’ve struggled to get a decent return on their investment. There’s a real chance that promising technologies will languish in the lab without government prompting.

With loan guarantees and cap and trade off the table, and various tax incentives for renewable in danger, Obama has been turning to the Environmental Protection Agency. Under his leadership, the EPA has issued ambitious fuel economy regulations which could force automakers to develop new technologies, and indeed, automakers are funding work on better batteries, fuel cells, and other technologies in response. The EPA is also planning to issue carbon dioxide rules for power plants that could accelerate the shift from coal to natural gas (see “Natural Gas Changes the Energy Map” and “King Natural Gas”), and might eventually prompt a greater shift to renewables.

But Obama should be wary of pushing too hard on EPA regulation. While most people believe climate change is a serious problem, and climate change has once again become a hot topic after Sandy, many people in the U.S. don’t think it is a problem, and no one is sure just how much money should be spent to solve it. For example, scientists don’t know how much damage climate change will cause, and models can’t make good predictions about where the damage will occur. Tackling climate change will be a long term project that will need the long term support of Americans to solve, and creating that support will require working through difficult issues of how to proceed when the impact of climate change is uncertain. 

With these things in mind, Obama should reverse the course his administration has taken in the last couple of years, talking little about climate change, and only confusing the issue with talk of green jobs and oil independence which have little or nothing to do with addressing climate change (see “Avoiding the ‘C’ Words”). One of the most important steps Obama can take in the next four years isbe to make climate change the focus of an intense, high level, national debate.

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Tagged: Energy, climate change, global warming, ARPA-E, batteries, research, Obama, electric vehicles, Solyndra, Barack Obama, solar panels, regulations, innovation hubs, Envia, energy innovation

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