Yesterday marked the 40th anniversary of Neil Armstrong’s moonwalk, the event which made the US the first and only nation to accomplish one of the greatest technological feats in human history. While space-race aficionados will argue that US-Soviet competition continued beyond the 1969 moon landing, for the layperson, Armstrong’s ‘small step’ marked the end of the space race.
In 2009, a race for clean energy is gathering pace. The dual challenges of climate change and increased economic competitiveness are driving nations to develop new energy technologies that harness earth’s abundant renewable resources. This technology is increasingly viewed as central to our economic fortunes with renewable energy poised to be the next big market. On several occasions President Obama has acknowledged that:
‘The nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy.’
We’ve heard calls for a New Apollo project for renewable energy before, and I will not discuss the merits of such a scheme here. Instead, on the anniversary of the Apollo program achieving its mission objective, I will explore the notion of a clean energy race. I will compare the space race of the Cold War era and the clean energy race of today—identifying a few of the similarities and differences, and commenting on America’s current standing.
Unlike the space race, which was a competition between the world’s two superpowers, the renewable energy race features several nations who quietly compete for the renewable energy technology edge. While it was arguably the US started the energy race in the 1970s when President Jimmy Carter implemented renewable energy research programs to deal with the oil shocks of the 1970s, nations with foresight have managed to position themselves at the head of the pack—and the US.
The US faces stiff competition from multiple nations, including:
China – In recent years China has established a strong foothold in manufacturing solar PV cells and wind turbines. The nation is set to strengthen this position with a multi-billion dollar investment package for renewable energy. Estimated at $440-660 billion to 2020, the investment will be unprecedented, and has the potential to secure a dominant position in renewable energy markets for years, if not decades.
South Korea – South Korea is starting from a low level of installed renewable energy, but the Asian tiger economy seeks to change this with its recently announced $84 billion investment in green technologies, including renewable energy, over five years. South Korea’s ‘Green New Deal’ aims to catapult the nation into the top seven ‘green powers’ by 2020, and top five by 2050. The nation has set the international benchmark for public investment as a proportion of GDP—investing 2 percent each year for the next five.
Japan – Japan was one of the leading nations for solar PV production but has rapidly lost market share over the last five years. To address this decline Japan has announced the goal to double its solar energy capacity by 2020 and become world’s number one solar nation.
The European Union – Europe’s renewable energy powerhouse Germany is a market leader in both wind turbine and solar PV technology. A combination of highly skilled workforce and successful feed-in-tariff policies has allowed the German renewable energy industry take root and provide a platform for clean energy exports. Denmark leadership in wind reinforces the European Union’s clean energy capabilities. Denmark’s Vestas Corporation is currently the world leader in wind energy with 20 percent market share.
The obvious parallel between the space and clean energy race is the type of national focus and investment required to achieve ambitious technological goals. US investment in renewable energy R&D peaked in the late 1970s under the Carter Administration and has steadily declined since. As the Federation of American Scientists noted last week:
‘Federal energy research in new energy technologies declined from 1980 to 2007 by more than 50 percent in real dollars, and corporate energy research has also declined significantly.’
Like the space race, the clean energy race will require comparable national focus and effort, and sustained investment.
The Breakthrough Institute and President Obama have called for annual investment of $15 billion in clean energy R&D for a decade. The Brookings Institution, and top energy scientists recommend public investment of between $20-30 billion per year over a decade to ensure the development of breakthrough energy technology in the US. Unfortunately, the Waxman-Markey bill to be considered by the Senate later this year, will likely invest about $1 billion annually in clean energy R&D and roughly $10 billion in the clean energy sector as a whole. This is clearly much less than the $44-66 billion per year the Chinese are expected to invest, the investments energy experts recommend, and also less than NASA’s 2010 budget of $18.6 billion.
Some will cite the green stimulus measures of the Recovery and Reinvestment Act 2009 as enough to jump-start the domestic renewable energy industry. While the green stimulus investment does indeed represent a great starting point, it should be followed by sustained public investment. To emphasize the point, JFK didn’t just put down a one-off payment on the mission to the moon with a cap-and-trade scheme to provide the ongoing funding for the program. The Kennedy and Johnson Administrations directly invested billions of dollars over the decade. Around $200 billion (in 2007 dollars)—$20 billion per year—was invested in the national space program during the 1960s. This approach underscores the fact that achieving a leadership role in high technology requires ongoing public investment.
In recent opinion pieces, co-sponsors of the ACES bill Rep. Henry Waxman (D-CA) and Rep. Ed Markey (D-MA) use the anniversary of the moon landing to support their bill. They claim that the provisions contained in ACES present the best way for the US to win the clean energy race. While both Waxman and Markey correctly acknowledge the efforts of China and South Korea as clean energy competitors and note America’s laggard position, they overstate the amount of revenue ACES will direct to clean energy. And fail to mention that the bulk of the revenue generated will be directed to the incumbent energy sources. Furthermore, by associating ACES with the Apollo model of public investment, Waxman and Markey conceal the fact that the ability of cap-and-trade schemes to deliver the type of technology innovation required is without historical precedent.
Will the US rise to the challenge?
So, will the US rise to the challenge? Some analysts like Michael Lind and TNR’s Franklin Foer and Noam Scheiber would lead us to believe that President Obama is unlikely to act as boldly as JFK and LBJ. However, I think it’s too early to tell whether he will or not. One thing is clear: Obama, with his remarkable communications skills and network of progressive Americans, has a great platform for launching an Apollo-like initiative for the 21st century. Putting America back on track with clean energy will start with a ‘giant leap’ in public investment.