The United States and the world need a revolution in energy technology—a revolution that would improve the performance of our energy systems to face the challenges ahead. In an intensely competitive and interdependent global landscape, and in the face of large climate risks from ongoing U.S. reliance on a fossil-fuel based energy system, it is important to maintain and expand long-term investments in the energy future of the U.S. even at a time of budget stringency. It is equally necessary to think about how to improve the efficiency of those investments, through strengthening U.S. energy innovation institutions, providing expanded incentives for private-sector innovation, and seizing opportunities where international cooperation can accelerate innovation. The private sector role is key: in the United States the vast majority of the energy system is owned by private enterprises, whose innovation and technology deployment decisions drive much of the country's overall energy systems.

The United States needs a revolution in energy technology innovation to meet the profound economic, environmental, and national security challenges that energy poses in the 21st century. Researchers at Harvard Kennedy School undertook a three-year project to develop actionable recommendations for transforming the U.S. energy innovation system. This research has led to five key recommendations for accelerating U.S. energy innovation.

The report, Transforming U.S. Energy Innovation, released on Nov. 22, 2011,is the result of a three-year energy research, development, demonstration, and deployment (ERD3) project of the Energy Technology Innovation Policy (ETIP) research group at Harvard Kennedy School's Belfer Center for Science and International Affairs. The ERD3 project was funded by a grant from the Doris Duke Charitable Foundation to produce and promote a comprehensive set of recommendations to help the U.S. administration accelerate the development and deployment of low-carbon energy technologies.

There is uncertainty about the ex-ante returns to research, development, and demonstration programs in the United States on carbon capture and sequestration (CCS) technology. To quantify this uncertainty, we conducted a written expert elicitation of thirteen experts in fossil power and CCS technologies from the government, academia, and the private sector. We asked experts to provide their recommended budget and allocation of RD&D funds by specific fossil power and CCS technology and type of RD&D activity (i.e. basic research, applied research, pilot plants, and demonstration plants) for the United States....On average, experts estimated that if their recommended RD&D portfolio was implemented, the capital cost of new coal plants with CCS in 2030 would decrease by 10% in addition to the cost reductions/increases that would occur by 2030 through non-public RD&D related factors.

This analysis provides an overview the Department of Energy's fiscal year 2011 energy research, development, demonstration, and deployment (ERD3) budget proposals, and lays out actionable recommendations to strengthen the effort.  Overall, the report concludes that the 7 percent requested increase in applied energy research, development, and demonstration funds, while welcome in a time of budget stringency, remains well short of the sustained investment likely to be needed to meet the energy demands of the 21st century.

Melissa Chan and Laura Diaz Anadon of the Energy Research, Development, Demonstration & Deployment (ERD3) Policy Project presented at the 2009 Annual Meeting of the Institute for Operations Research and the Management Sciences (INFORMS).

"A Technology-Based Greenhouse Gas Reduction Strategy for 2030" was presented by Melissa Chan and Laura Diaz Anadon of the Energy Research, Development, Demonstration & Deployment (ERD3) Policy Project at the U.S. Society of Ecological Economics 2009 Conference, Washington, D.C., June 1, 2009.