America Needs to COMPETE
Although America once led the global race in clean tech innovation and investment, our country has been slipping behind the rest of the world for quite some time. Last year, China surpassed the U.S. in clean energy investment by an almost two-to-one margin, according to a recent report from The Pew Charitable Trusts. The other “Rising Tigers” in Asia are also nipping at our heels. Over the next five years, these countries will out-invest the U.S. in energy technology by at least three-to-one. That’s a scary prospect.
Courtesy of Breakthrough Institute
So what exactly is causing this dramatic shift? The answer, in a word, is policy. Countries with robust national policy frameworks that include market-making mechanisms like a renewable electricity standard (RES), low-cost renewable energy financing and carbon pricing, are not only leading the race, they are blazing ever-faster ahead. Fortunately, there is hope that the U.S., dubbed the “Sleeping Giant” by the Breakthrough Institute and the Information Technology and Innovation Foundation (ITIF) in a November 2009 study, will soon wake up. The Breakthrough Institute and ITIF have teamed up once again, this time with the Brookings Institution, in producing a new report that calls for Congressional reauthorization of the America COMPETES Act. Among the study’s policy recommendations, the authors urge our lawmakers to:
- Invest in a new generation of clean scientists and engineers
- Invest in increasing funding for clean energy R&D at existing agencies and in new innovative programs like Energy Frontier Research Centers, DOE Innovation Hubs, and ARPA-E
- Support American clean energy manufacturers with a new industrial innovation institute, new clean energy supply chain initiatives, and low-cost financing to help US manufacturers retool for the clean economy
- Spur the development of clean energy industry clusters by funding new regional cluster initiatives and clean energy research consortia.
Additionally, the report calls for an extension of the Advanced Energy Manufacturing Tax Credit (MTC) [Section 48C] and the enactment of a “more robust” tax credit for R&D. Applied Materials certainly stands behind these policy recommendations and is hopeful that Congress will act swiftly and appropriately to ensure that America regains its competitive edge. There is reason to be optimistic. Late last month, the House passed the COMPETES Act handily, and we look forward to a similar outcome in the Senate.
As we look farther forward, though, we need to make permanent the MTC and its attendant renewable energy credits, and include solar manufacturing equipment within the MTC. Permanency in the tax code would not only greatly increase America’s competitiveness, but also give the long-term certainty necessary to spur additional renewable energy investment and employment.
As we wrote about our country’s lagging competitiveness on this very blog back in December, the “clean technology tigers are not waiting for [us]. They are busy charting their clean energy growth strategies, attracting investment and taking other steps to move them from the ‘poised’ position to the ‘dominant’ one. It’s time for the giant to awaken.”