from Energy, Security, and Climate and Energy Security and Climate Change Program

Beyond Climate Confusion: Why Both Energy Innovation and Deployment Matter

May 4, 2016

Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

I have a new essay in the May/June issue of Foreign Affairs—“The Clean Energy Revolution: Fighting Climate Change with Innovation”—which I co-authored with Teryn Norris, a former advisor at the Department of Energy (DOE). We are grateful for the positive and constructive comments we’ve received, but I do want to respond to a pair of critical posts by Joseph Romm, formerly an acting Assistant Secretary at the DOE under President Clinton. I hope we can put to rest an unhelpful debate among those passionate about confronting climate change, or, at the very least, respectfully agree to disagree.

First, here’s some of the positive coverage of our essay. Bill Gates called it “One of the best arguments I’ve read for why the U.S. should invest in an energy revolution.” A visionary who plans to double his personal investment in clean energy technology ventures to $2 billion over the next five years, Mr. Gates is reinvigorating the sector, and we’re honored by his endorsement.

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Gernot Wagner, a senior economist at the Environmental Defense Fund and author of Climate Shock, called it “clean energy revolution, walk-and-chew edition: price carbon, *and* innovate.” On the other side of the aisle, Rich Powell, Managing Director at the conservative ClearPath Foundation, called it “the best summary of our clean energy innovation challenge I’ve read.”

Finally, David Roberts at Vox also wrote an article about our essay, remarking, “Here’s a sign of a more constructive debate on clean energy innovation.” I was gratified he recognized our intent to embrace intelligent policies that advance both innovation in and deployment of clean energy technologies “without forcing unnecessary either-or choices.”[1] He quoted our essay’s thesis:

"Fighting climate change successfully will certainly require sensible government policies to level the economic playing field between clean and dirty energy, such as putting a price on carbon dioxide emissions. But it will also require policies that encourage investment in new clean energy technology, which even a level playing field may not generate on its own."

We set out to write an inclusive essay, and we sincerely appreciate that most readers recognized that. Unfortunately, Dr. Romm chose to interpret our essay as a one-sided argument for innovation at the expense of deployment. That characterization is neither accurate nor constructive, as I’ll demonstrate.

Of Red Herrings and Straw Men

The first critical post runs over 4,000 words, under the headline, “We Fact-Checked A High-Profile Article On Climate And Energy. It Wasn’t Pretty.”[2] The post boils down to three central contentions:

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1.We have made a factual error by asserting, “If the world is to avoid climate calamity, it needs to reduce its carbon emissions by 80 percent by the middle of this century—a target that is simply out of reach with existing technology.”
2. It is impossible to achieve deep reductions in greenhouse gas (GHG) emissions by mid-century using "mysterious nonexistent technology.”
3. Existing clean energy technologies have fallen in cost and will continue to do so as a function of their deployment, which implies that they are sufficient to achieve ambitious climate goals.

It should be clear that only the first contention is amenable to straightforward fact-checking. So the title is a red herring that does not reflect the bulk of the post’s discussion, which invites complex, rather than yes/no, answers. We answered the factual question immediately after Dr. Romm published his post. Climate models suggest that global GHG emissions must fall by 75–90 percent by 2050, compared with 2010 levels, to provide the best chance of limiting climate change to 1.5 degrees Celsius. This is a warming level above which scientific uncertainty about the effects of climate change increases substantially. As a result, the Paris Agreement reflects an aspiration to meet this target. Dr. Romm did not contest this fact. We do concede, however, that we could have been clearer in explaining the context behind the 80 percent GHG reduction figure. Still, whether the required reduction is 60 percent (to limit warming to two degrees) or 80 percent by 2050, improved technology can accelerate progress toward either of the targets. And the emissions reduction challenge will not end in 2050, another reason why it is crucial to make long-term investments in innovation today.

The second contention suffers from another logical fallacy: it sets up our essay’s argument for supporting innovative technologies as a straw man argument favoring “mysterious nonexistent technology.” I am genuinely surprised by this contention, especially because of its author. Dr. Romm and I are both trained physicists. And my experience in the lab, working with some of the best scientists in the world on a revolutionary solar energy technology, proved to me that the breakthroughs we need are within reach. The technologies we need to develop are neither mysterious nor nonexistent—science and technology enable us to probe materials at the nanoscale and simulate novel ideas on supercomputers. And, as Dr. Romm and I both know, the academic literature brims with sanguine reports that do just that.

Concretely, in our essay we propose several clean energy technologies that the world needs to achieve deep decarbonization. We write:

"New reactor designs could make nuclear meltdowns physically impossible, and nanoengineered membranes could block carbon emissions in fossil-fueled power plants. Solar coatings as cheap as wallpaper could enable buildings to generate more power than they consume. And advanced storage technologies—from energy-dense batteries to catalysts that harness sunlight to split water and create hydrogen fuel—could stabilize grids and power vehicles. The wish list goes on: new ways to tap previously inaccessible reservoirs of geothermal energy, biofuels that don’t compete with food crops, and ultra-efficient equipment to heat and cool buildings. Every one of those advances is possible, but most need a fundamental breakthrough in the lab or a first-of-its-kind demonstration project in the field."

For example, there are several candidate chemistries for an energy-dense battery that could power long-range, inexpensive electric vehicles (DOE’s Quadrennial Technology Review names lithium-sulfur, magnesium-ion, zinc-air, and lithium-air), but further lab science is needed to develop these technologies. And whereas solar perovskites have excelled in lab efficiency tests, they still need real-world experience to persuade investors and customers to trust the product.

None of these technologies are mysterious or non-existent, but they will require resources and time to achieve commercial entry and displace fossil fuels. Dr. Romm argues that the pace of previous energy transitions and the colossal amounts of capital required for such a transition preclude next-generation technologies from playing a major role before 2050.

I disagree. That Dr. Romm can point to a particular example of a slow technology development cycle (he references “thorium-based nuclear power”) should not entail inductive license to dismiss every other technology out of hand. At the 2015 Paris summit, Energy Secretary Ernest Moniz provided a compelling vision for nuclear technology development:

"If we have a viable pathway at building nuclear power in smaller bites, the whole financing structure can change and make it much more affordable…If we can demonstrate let’s say the first modular reactor in the early part of the next decade, then what we hope is it’s part of the planning process in the middle of the next decade for our utilities. Around 2030 the 60-year lifetime of existing reactors will start to kick in, and that’s a time period when utility commitments to a new round of nuclear will be especially important…If a couple of [the more than 50 privately funded companies developing advanced nuclear technologies] make it it’s a big deal."

And even though there may not be a good precedent for a rapid transition in the energy sector, there are other infrastructure sectors that have been transformed rapidly by innovation. Consider fiber optic networks, which compose a massive global infrastructure system. Over the last four decades, the information capacity of these networks has increased by a factor of roughly ten million. Real scientific breakthroughs and the deployment of innovative technologies made this possible (for more on the science, see this article on Keck’s Law).

Partnering Innovation with Deployment

Dr. Romm’s third contention is actually one on which we share substantial common ground. We should celebrate the fall in the costs of several clean energy technologies as a function of their cumulative production (the “experience” effect). But I do disagree with Dr. Romm’s extrapolation that existing technologies will suffice to meet the climate challenge. Still, I think that their deployment plays an important role in paving the way for superior technologies to succeed them.

Deployment can lead to financial and business model innovation, as we see with residential solar leases in the United States or rural microgrid ventures in India and East Africa. Similarly, governments can hone policies through the experience of deployment, like the streamlined renewable energy permitting, inspection, and interconnection regimes in Germany. Utilities learn how to manage grids that overflow with intermittent power. Investors learn how to finance large projects that deliver steady cash flows but are unfamiliar to most investors. And innovative companies look for viable deployment pathways to ensure that their investments in technology development can pay off. Today’s technologies alone won’t actually power tomorrow’s world. But they could make it possible for advanced successors to do so.

There are clear limits to the potential for existing technologies to meet climate targets. For example, the International Energy Agency warns, “Carbon capture and storage (CCS) remains a vital technology to meet long-term global climate goals for emissions reduction...To reduce the cost gap and stimulate innovation, increased policy action is needed to create more market opportunities in parallel with continued research and development (R&D).” As emerging economies like India invariably build more fossil-fuel generators, cost-effective CCS technology will indeed be essential.

Early CCS deployment efforts have experienced setbacks, such as construction delays and cost overruns (cf. Southern Company’s Kemper Project), but the deployment process will yield valuable insights into how to better budget, plan, and implement large CCS retrofit projects in the future. Still, the technology used in current-generation CCS projects to capture CO2, amine absorption, is inadequate for a widely deployable solution to decarbonizing the world’s fossil-fueled power plants. Instead, membrane separation and metal-organic framework capture technologies, which are showing promise in the lab, could meet the performance criteria for a scalable CCS solution.[3]

Dr. Romm’s argument is more convincing with respect to solar energy, which has become increasingly competitive with conventional energy sources as a result of rapid deployment. Harvard Professor David Keith recently predicted that solar’s dramatic price declines may obviate the need for technology improvements. I think the jury is still out, but we have good reasons to expect that technology improvements will be necessary for solar power to become truly mainstream by mid-century, as GTM Research director Shayle Kann and I wrote in Nature Energy last month. Still, I will be pleasantly surprised if I am proven wrong. Indeed, just this week, a Saudi-backed consortium placed an astonishingly low bid to build a solar farm in Dubai for only 3¢/kWh, half the local price of power from natural gas. Existing technologies may surprise us, as Dr. Romm suggests, especially if this bid turns into a contract and Dubai’s prices can be replicated elsewhere in the world. (I am skeptical, though, of the latter possibility).[4]

Deployment and innovation go hand in hand. Sometimes, policies that encourage deployment can discourage innovation. I contend, for example, that some solar deployment policies create ring-fenced markets in which mature technologies can lock out emerging competitors through incumbency advantages. But in most cases, public and private resources for deployment do not come at the expense of resources for innovation. And by holistically designing policies that support both emerging technologies as well as mature ones, as we argue in our essay, policymakers can most cost-effectively confront climate change. We assert that a price on carbon, in conjunction with increased support for research, development, and demonstration of innovative clean energy technologies, can best coordinate innovation with deployment.

I hope this resonates with anyone committed to the cause of combating climate change. I invite Dr. Romm and others who might disagree with me to engage in civil discourse—we have a lot to learn from each other. And if we find we have irreconcilable differences, I will be more than happy to respectfully agree to disagree.


[1] I also want to thank CFR’s Michael Levi and Andy Revkin at the New York Times for helping me understand the importance of an inclusive approach to climate change mitigation that embraces both innovation and deployment.
[2] Dr. Romm’s second post references the disagreements with our essay previously set out in his first post. But the second one focuses on Bill Gates and makes a third logical fallacy—an inappropriate ad hominem attack: “Gates, however, appears to be someone who doesn’t really listen to the advice of experts. This affliction—common to billionaires (I’m looking at you Donald Trump)—shines through from the very beginning of this interview [with the magazine, Technology Review].”
[3] I thank Mengyao Yuan at Stanford University for technical guidance on CCS research.
[4] Developers building projects at Dubai’s Mohammed bin Rashid Al Maktoum solar park enjoy a lower cost of capital than any counterpart around the world. Equity has historically been cheap because the Dubai Electricity and Water Agency (DEWA) takes a majority equity stake; debt is also cheap because of sovereign guarantees, for example from the Saudi government. And DEWA has set up the solar park to minimize regulatory and installation costs for developers.

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