February 24th, 2011

Using Government Policy to Spur Clean Energy Innovation

BOSTON -

When people (and companies) talk about the benefits of clean energy, they usually hammer home three key points:

  • Energy: yup, we continue to need it
  • Environment: a more sustainable option, from extraction to generation
  • Economic: secure supply, stable prices, new jobs

The President was no exception in his #SOTU, a few weeks back. In his familiar alliterative style, he said the investment in clean energy could “strengthen our security, protect our planet, and create countless new jobs.” If nothing else, it was a great piece of “earned media” for the industry. As a (very much, self proclaimed) “innovation economist,” I was more interested in the set-up: “The first step in winning the future is encouraging American innovation.” (Note: GLDer Walter Frick takes a well-said different perspective)

Clean energy is just another canvas, another “channel” — an important one for the trio of reasons above — for American (and global) innovation. That’s the reason for the President’s use of so many analogies: computing (“chips” in the President’s parlance), telecommunications (GPS), web (Google and Facebook), and space (Sputnik and Apollo). From a relatively small spark — in all of those cases, a government funded one — entire industries are born, along with all of the associated economic growth and benefits.

I credit the Breakthrough Institute with making this line of thinking mainstream for clean energy (in Washington, anyway). They have argued tirelessly, and often broken ranks with the environmental community to do so, that the importance of cleantech goes well beyond climate. Rather, there is opportunity for the next wave of “creative destruction” — a shift in the allocation of resources, a restructuring of sectors and industries, a “reset” button for learning curves — which can break through stagnation, create new markets, and power economies.

While government investment is necessary on the front end of this formula, subsequently the American entrepreneurial engine kicks in. This is enormously important: while stodgy, old-tech industries sustain big companies (with big work forces), emerging research by organizations like the Kauffman Foundation demonstrates that net job growth is primarily the result of entrepreneurial activity.

This is not a new message (or topic!), but it is an important nuance — because no one in either party argues with the need for American competitiveness, and the power of American innovation.

Like anything else, there are opportunity costs in policy design: so where should we be focusing our efforts to accelerate clean energy deployment?  Could promoting clean energy as a means as opposed to the all-holy end help or hurt industry momentum?

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Matt Marino

About Matt Marino

Matt C. Marino is a LEED Green Associate and 2010 graduate of the Boston College Carroll School of Management MBA program, where he studied energy and technology markets. Upon graduation, Matt started work as a Market and Policy Analyst at First Wind in Boston. He is also the founder of Clean Pursuits (@cleanpursuits) a “for-benefit” venture committed to developing cleantech applications for communities in need; and the co-founder of Switchback Life (@SwitchbackLife), a healthy snacks company. When not working, Matt can be found making lists and training for ultra-distance endurance competitions, often with his Brittany (spaniel), Cooper.