Buying a Sustainable Economy

Chemical & Engineering News (7/27, Johnson) – Views on the likely impact of the recovery act are mixed, but most energy economists, engineers, and scientists recognize that this is a sea change in government funding and are holding their opinions in check, waiting to see what happens. Only $8.0 billion has been obligated so far, with just $264 million having been spent. Many observers question whether $38.7 billion is enough to make much of a dent in a program that is attempting to change how the world generates and uses energy. In mid-July, 34 Nobel Laureates called on Obama to increase federal funding for climate-change technology in the cap-and-trade bill to the $15 billion per year he promised during his presidential campaign.

Since the mid-1990s, energy R&D has accounted for about 1% of all federal R&D investments, according to a study funded by Pacific Northwest National Laboratory… The study, based on several R&D reports and databases, found that between 1961 and 2008, the federal government spent $172 billion for energy technology development … During the same period, however, the government spent overall nearly $4 trillion in cumulative R&D funding. In all but one year, defense R&D was more than half of the total.

R&D spending mirrors the changing demands of society, government, and Congress. During the space race of the 1960s, for instance, space R&D accounted for up to one-third of all federal R&D, and in the mid-1990s, health R&D—mostly through the National Institutes of Health—ramped up to nearly one-quarter of the federal R&D investment for that period … “There never has been anything like a free market in energy,” counters Frank Laird, professor of technology and public policy at the University of Denver. “It is a fantasy. The first tax subsidies go back to 1918 and went to oil and gas. The question is, which energy sources do you support?”