Toward a Sustainable Energy Policy

by Benjamin K. Sovacool

San Francisco and California have long been ahead of the nation in terms of pursuing climate-friendly energy technologies. San Francisco has an ambitious incentive program for solar panels, despite the city's fog, and California aggressively promotes renewable energy and energy efficiency through its building codes, research programs, renewable portfolio standard, and a slew of other mechanisms.

Instead of following California's lead, however, the federal government is quietly cutting its research and development budget for renewable energy at the same time it is calling for increased funding for fossil fuels, even though conventional sources have already received the majority of federal spending on energy technologies.

According to new data released by the U.S. Government Accountability Office, 90 percent of Department of Energy R&D expenditures have gone toward conventional sources from 1978 to 2008. The entire class of renewable power technologies received a miserly 12 percent of DOE research expenditures from 2002 to 2007. A review of Department of Treasury data indicates that fossil fuels received 75 percent of all energy-related tax credits compared to a meager 15 percent for renewables and biofuels over the same period.

More discouraging, the DOE intends to worsen this bias in its most recent request for fiscal year 2009 appropriations. The DOE has requested to cut renewable energy R&D between 2008 and 2009, but it is seeking to increase funding by 34 percent for fossil energy R&D and 44 percent for nuclear R&D.

In addition, the Senate just failed to renew $18 billion in tax incentives for renewables, energy efficiency and other alternative technologies, including the soon-to-expire production tax credit for wind turbines, in the end of July.

Researchers at Lawrence Berkeley National Laboratory cautioned earlier this year that failing to extend that very tax credit would definitively slow domestic wind development and private R&D, induce higher installment costs, increase reliance on foreign manufacturing, and corrode incentives to expand transmission access to wind farms.

Forcing clean energy sources to compete with oil, coal and nuclear under these conditions is like trying to race a bicycle against a Ferrari.

The impact of this flagrant subsidization of dirty, dangerous and conventional energy technologies is threefold.

First, the government's R&D plans will directly exacerbate American dependence on imported fuels such as oil and uranium, and commit the country to a greenhouse-gas intensive energy future. Government support of these polluting technologies guarantees that they will retain their dominance in the American market.

Second, subsidizing conventional energy systems artificially lowers the costs of innovation in mature industries and increase barriers to entry for newer, cleaner and emerging technologies. For California, this translates into fewer jobs in the renewable energy manufacturing sector and more expensive renewable energy.

But third, the pattern of federal subsidies and research support reminds us that we cannot trust the federal government or the conventional industries that it supports to move the nation toward new sources of energy production and transmission. The Bush administration's rhetoric that it intends to "do something" about fighting climate change at precisely the same time as it increases subsidies on oil, coal, and gas technologies is shameful.

Conventional industries are no better. They frequently attack cleaner energy sources for needing subsidies while they surreptitiously receive subsidies.

The result is an energy policy for the country that damages the natural environment, forces higher fossil fuel prices on customers, and corrodes America's image abroad.

In 1976, President Carter argued that the country could either transition to a more sustainable energy sector intentionally through careful planning, or chaotically once the inexorable laws of nature and copious amounts of human suffering forced it to. We are speedily heading down the second path, despite California and San Francisco heading down the first.

Who gets energy R&D subsidies

Department of Energy R&D subsidies from 2002 to 2007 (in 2007 dollars)

Nuclear power received $6.2 billion (54%)

Fossil-fuel related energy received $3.1 billion (27%)

Renewable power technologies received $1.4 billion (12%)

Other technologies $.8 billion (7 percent)

Source: Department of Energy

Energy subsidies compared*

End-use energy efficiency has received $1 in subsidies for every $35 spent on oil, gas and coal subsidies granted between 1943 and 1998.

Nuclear $150 billion

Solar $4.4 billion

Wind $1.3 billion

Note: Calculated in 2007 dollars

Source: Department of Energy

Benjamin K. Sovacool is an adjunct assistant professor at Virginia Tech and a research fellow at the National University of Singapore.
© 2008 San Francisco Chronicle