An Energy Agenda for the New Congress: In Spite of Bipartisan Support, Numerous Critical Energy Initiatives Languished in the Previous Congressional Session. the Need to Take Action Is Even More Pressing for the Current Congress

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At the beginning of this new Congress, it is already becoming clear that energy policy will have a major place on the agenda. Part of that is because the president made clear in his State of the Union Speech that he will give energy a major priority in his administration. In part, it is because our energy security is dependent on overseas supplies and global stability. The events that we have seen unfold in North Africa and the Middle East are stark reminders that the world is an unpredictable place. Whenever geopolitical events potentially affect our access to affordable energy supplies, it is a spur to consider energy policies that might reduce those geopolitical risks.

But perhaps more important than any of those reasons is the competitive pressure the United States is experiencing from other major world economic powers as they take a very leading role in clean energy markets. According to Bloomberg New Energy Finance, new investment in clean energy globally reached nearly a quarter of a trillion dollars in 2010. That was a 30% jump from where it was in 2009, and a 100% increase from the level in 2006.

China alone invested $51.1 billion in clean energy in 2010, making it the world's largest investor in this sector. China now manufactures over half of the photovoltaic modules used globally. In 2010, China installed about 17 gigawatts of new wind capacity, roughly half of the total capacity installed globally, with virtually all the equipment being supplied by its domestic manufacturers.

But the concern about the competition for clean energy jobs is not just about China. Europe also made major strides last year toward competing in these markets. Countries such as Germany, the Czech Republic, Italy, and the United Kingdom, have emphasized small-scale distributed electricity-generation projects. In Germany, 8.5 gigawatts of new photovoltaic capacity were added in 2010. The United States must be aware of these initiatives as it considers its course of action.

It is also significant that other countries consume energy more efficiently than does the United States. According to the International Energy Agency, Japan, the United Kingdom, and Canada are all ahead of the United States in implementing policies to make sure they get the most out of every BTU that they consume. Japan, for example, has its Top Runner program, which encourages competition among appliance and equipment manufacturers to continuously improve the efficiency of those appliances

and that equipment.

So the question is: How does the United States respond to this competition for clean energy jobs? I believe that to remain at or near the forefront of this strongly developing market, the United States needs to do at least four things:

* First, it needs to ensure that it remains at the forefront of energy R&D, because innovation is the source of its greatest competitive strength. The president made that point in his State of the Union Speech and in other forums as well.

* Second, it must ensure that it has a strong domestic market for clean energy technologies. Without clean energy market pull in the United States, there will not be the incentive to manufacture and deploy these technologies here.

* Third, it has to ensure that it has the necessary financial infrastructure and the incentives to provide the capital needed to build advanced energy technology projects.

* Finally, it needs to have explicit policies to promote the development of U.S. manufacturing capabilities for these clean energy technologies.

I think these four items or elements should be at the heart of whatever comprehensive energy legislation we undertake in this Congress. Let me say a few more words about each of them.


The first item to consider is support for advanced energy technology R&D. The United States has traditionally led the world in many of the characteristics that are essential to having an innovation economy. …