While several eco-pundits have been lamenting the failure of a climate bill to pass through Congress, it is important to keep one thing clear. Clean technology deployment is core to any policy intended to decrease GHG emissions. In this respect, we have witnessed unprecedented funding for the clean tech industry from the Obama Administration.
In fact, Bloomberg reports that:
By the end of 2011, the White House plans to channel more than $50 billion to thousands of clean-technology companies through tax credits, low-interest guaranteed loans and grants. Add in money for a “smart” electric power grid, research and consumer tax breaks, such as the $7,500 credit for buying an electric car, and the commitment rises to $69 billion.
The electric vehicle industry has been particularly successful in securing federal funding. In my research, I tracked over $5 billion in federal loans and grants to more than thirty battery, electric utility, and electric vehicle firms over the past two years. This kind of government support has had a domino effect throughout private investor communities, who have also invested heavily in plug-in vehicle firms.
Acting in the capacity of a clean tech “investor-in-chief,” Obama has succeeded in jumpstarting this industry more effectively than any other federal or state policymaker to date. Prior policies intended to stimulate the production of clean cars, such as the federal government’s CAFE standards or California’s Zero-Emission Vehicle Mandate, use “command-and-control” mechanisms to regulate industry production. By setting specific performance standards without giving any economic incentives for moving in this direction, these policies have been contested by automakers for decades.
In contrast, by providing funding for the evaluation, demonstration, and production of electric cars, Obama has generated widespread industry support. Major automakers and entrepreneurial firms are ramping up production on a scale that supersedes any regulatory policy currently in place.
Of course, the amount of funding Obama has funneled to this space is still paltry compared to the incentives and subsidies fossil fuel industries continue to receive. Nonetheless, there is a strong lesson to be learned here for those who would like to see continued environmental improvement from the market sector. Rather than get hung up on complex cap-and-trade regulatory measures that meet industry resistance, we should push for more policies that reduce investments in dirty energy and shift funding towards clean tech firms. This will facilitate desired ecological change in a more timely manner, while also creating the kind of economic expansion that this country needs.
Shannon Arvizu, Ph.D., is a clean-tech marketing and policy consultant. To maximize your triple bottom-line, visit www.MissElectric.com.