Stimulating Innovation in Energy Technology: Meeting the Worlds Urgent Need for a Cleaner and More Efficient Energy System Will Require a More Effective Strategy That Incorporates Technology Neutrality, International Collaboration, Institutional Change, And a More Fine-Tuned Understanding of the Innovation Process‪.‬

Energy technology poses a special challenge to the U.S. innovation system. Fossil fuels are deeply imbedded in the economy and the political system. To the user, they are usually cheap, convenient, efficient, and available in huge quantities. They benefit from public investments in infrastructure as well as direct subsidies through the tax system. The industries that produce and sell them are major employers and benefit from the public expectation of low-cost and readily available energy. New energy technologies seeking to enter the marketplace thus face a far from level playing field. But fossil fuels, of course, are not really cheap; their economic, environmental, and geopolitical costs place a heavy burden on the nation. The effort to reduce this burden amply justifies a program of the size and scope, although not the form, of the Manhattan Project, the Marshall Plan, or the Apollo Project. President Obama's $39 billion energy stimulus program and his April address to the National Academy of Sciences make it clear that he regards support for innovation in energy technology as an essential element of this administration's efforts to deal with the country's addiction to fossil fuels. It constitutes a recognition that market forces alone, even if augmented by a carbon charge or cap-and-trade regime, will not generate the pace and scope of innovations in energy supply and efficient end use that are needed to overcome the huge built-in preferences for existing energy technologies.