We are losing our generation’s “race to the moon” in clean energy technology innovation. Plain and simple. The EU and Asia are beating us. Hands down. The main driver for this is two-fold. First and foremost is financial. The 2009 Recovery Act stimulus package poured $27 Billion into energy efficiency and research into renewable energy from the Federal government. The well is running dry providing less incentive to develop new clean energy technologies. Manufacturing in the US has historically turned to consumer-facing technologies rather than develop back-line solutions to increase their bottom line when they have to rely on their own financial backbone.
In addition to this financial resource dwindling, the current Federal Budget has proposed even more cuts to federal energy research as well as a complete closure of the Department of Energy’s Moonshot Unit, ARPA-E. This unit is responsible to funding high-risk to reward opportunities for improving and inventing technologies to reduce carbon emissions and combat global climate change. This would require the states to fill the void as a funding mechanism. The challenge there is the financial health of many states is not so great – I’m looking at you Illinois and Kansas specifically, among many others.
This brings us to the second driver which is political. The current administration’s contempt for climate change and indication it plans on pulling out of the Paris climate deal coupled with a gutting of the EPA and Department of Energy have set the tone for now our standing in the global race for energy sustainability. Some states, such as California, New York, Massachusetts, Oregon, and others have not only taken a stand against what the Federal Government is doing and has proposed, but also have made it a core mission to financially back green technology innovation.
The US has already seen a 9% dip in federally funded clean technology patents compared to 2014 after seeing patents double every year between 2001-2014. This lack of available funds in the U.S. will make it very difficult to achieve even modest sustainability goals here at home. Lack of innovation coupled with a shift in attitude towards adoption could spell disaster for the United States standing on this issue. We have already seen countries such as Germany, China, Indian, Pakistan and even Russia call the US out as failing to live up to its COP21 commitment.
A recent study by the Nicholas School of the Environment indicates that green technology must see an adoption rate globally 10 times greater than what is currently happening in order to meet climate change goals of COP21. This requires not only a long-game view of new green energy solutions but a near term investment in capital but participating nations to achieve this. The greatest opportunity in the US for this adoption is with the Millennials who not only have rapidly growing purchasing power but also have little brand or country of origin loyalties that precious generations have had. This means that the European and Asian countries who are investing heavily into clean technology will be where these people go to make their purchases.
Germany and China are leading the pack in this race and have already blown right by us. Germany recently set a record with 41 percent of its power coming from renewables and China’s recent heavy $32B investment in foreign investment in renewables (a 60 percent increase for 2017) shows they are serious players in this arena. This is in addition to China already outspending the US on renewable energy 2:1 which has spurred economic growth and job creation outpacing the US in every metric. This is more than just their heavy investment in solar panel factories but includes electric vehicles and Lithium-Ion battery technology that could put a major dent in the US auto industry. Why would the US care? Developing nations, that’s why. These are the buyers of tomorrow and will certainly look to who is leading the pack which will not only hurt the US domestic markets for exports but will dramatically reduce our ability to inject ourselves at a later date if we ever get back on tract and have to play catch up as the EU and Asian technologies will have had the benefit of longevity in the market.
Even now, many of the ICT industries technologies are currently and increasingly designed and manufactured in China and elsewhere in the Asian peninsula instead of on US soil. Until the US gets its political house in order and back it up with a solid financial commitment instead of the current slash and burn while supporting legacy energy solutions such as coal and oil we will continue to lose this race. The discussions at the recent G20 summit in Germany are indicative of how badly we are not Making America Great Again.