Reports & Papers

Sustainable development requires harnessing technological innovation to improve human well-being in current and future generations. However, poor, marginalized, and unborn populations too often lack the economic or political power to shape innovation processes to meet their needs. Issues arise at all stages of innovation, from invention of a technology through its selection, production, adaptation, adoption, and retirement.

Characterizing the future performance of energy technologies can improve the development of energy policies that have net benefits under a broad set of future conditions. In particular, decisions about public investments in research, development, and demonstration (RD&D) that promote technological change can benefit from (1) an explicit consideration of the uncertainty inherent in the innovation process and (2) a systematic evaluation of the tradeoffs in investment allocations across different technologies. To shed light on these questions, over the past five years several groups in the United States and Europe have conducted expert elicitations and modeled the resulting societal benefits. In this paper, the authors discuss the lessons learned from the design and implementation of these initiatives.

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.

This study examines the legal, regulatory and financial issues encountered in nine planned commercial-scale carbon capture and sequestration (CCS) research, development and demonstration (RD&D) projects under Phase III of the U.S. Department of Energy’s Regional Carbon Sequestration Partnerships (RCSP) Program. In Phase III of the RCSP, financial issues dominated the outcomes in these projects, directly causing termination of three of the projects and contributing to termination in two others. Long-term liability and lack of coordination among regulatory authorities also posed significant barriers.

This paper summarizes the discussions from a workshop convened by the Harvard Law School's Emmett Environmental Law & Policy Clinic in Washington, DC on June 21, 2010.

There is broad consensus in scientific, business, and political circles that carbon capture and sequestration ("CCS") must be demonstrated quickly on a large scale because it is likely to be an important technology for reducing carbon dioxide ("CO2") emissions throughout the world. Indeed, a number of commentators predict that it may be impossible to achieve significant emissions reduction in the United States and abroad without the use of CCS.

Dramatic growth in nuclear energy would be required for nuclear power to provide a significant part of the carbon-free energy the world is likely to need in the 21st century, or a major part in meeting other energy challenges. This would require increased support from governments, utilities, and publics around the world. Achieving that support is likely to require improved economics and major progress toward resolving issues of nuclear safety, proliferation-resistance, and nuclear waste management. This is likely to require both research, development, and demonstration (RD&D) of improved technologies and new policy approaches.

"The focus of the workshop was on the demonstration stage of the technology innovation cycle. Current policies do not adequately address the private sector’s inability to overcome the demonstration "valley of death" for new energy technologies. Investors and financiers fear that the technology and operational risks at this stage of the cycle remain too high to justify the level of investment to build a commercial-sized facility."

"There is broad political consensus that the current energy system in the United States is unable to meet the nation's future energy needs, from the security, environment, and economic perspectives. New energy technologies are required to increase the availability of domestic energy supplies, to reduce the negative environmental impacts of our energy system, to improve the reliability of current energy infrastructure (e.g., smart grid, energy storage), and to increase energy efficiency throughout the economy."

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.