If Pres. Obama has his way, Washington will invest heavily in energy technology as part of a broader climate change initiative designed to wean us addicts from our daily (hourly? secondly?) carbon fix. The Republicans will take the technology minus the climate regulation, thank you very much. Either way, though, it appears the feds will invest more in carbon-sparing technologies.
But how? Brookings, the Breakthrough Institute and the Information Technology and Innovation Foundation just laid out their own wish list. A nice starting point for thinking about ways to get maximum bang for the buck. (Actually, we’d settle for a nice, solid return on same…).
This report is full of claims about the wonders of federal government intervention in the energy and technology sectors. Here’s an early paragraph that makes 3 such claims:
“While some may view the recommendations in this report as an unnecessary contribution to a
growing federal de!cit, the long history of federal investment in technology and education
shows that this assumption is incorrect. For example, every dollar invested in education by
the GI bill following World War II returned just over $5 in greater economic growth and $1.83
in greater tax revenues over the following 35 years, according to a Congressional report. Likewise, federal investment in R&D is a key driver of productivity gains and economic
growth, and studies routinely conclude that there is a signi!cant rate of return on such
investments for both the national economy and the federal tax base. For example, one study
of a sample of research projects funded by NIST demonstrated a median rate of return of 144
percent.”
QED, right? Well, the GI Bill undoubtedly did a lot of good for US society, but that we have no reason to believe that one “Congressional report”–not a CBO report–definatively established the large net benefit to the US economy asserted in this paragraph. Next is the assertion that “studies routinely conclude that there is a significant rate of return on such investments.” And the source for this claim is … one of the authors! Can’t be more authoritative than that. Finally, we learn that research projects funded by NIST demonstrated a median rate of return of 144 percent. Wow. That means that the Manhattan project, cited later, would have generated benefits of 56 million times its cost over the next 20 years alone. Since project cost about $2 billion, that implies benefits of $100 trillion, or more than 10 times total GDP over the that 20-year period. I suppose that actual rate of return was less than 144%, perhaps because it wasn’t funded by NIST.
The rest of the report carries on in this vein, with no mention of the decades of time and billions of dollars squandered by the federal government in the energy sector. Have we forgotten the Great Federal Synfuels Program, designed to save the country from unreliable foreign oil? How it ran on for years, finally building just one plant, which never operated–thankfully for US carbon emissions–and was later sold for 1% of its $2.5 billion cost? Have we forgotten the ethanol mandates and subsidies, which do a wonderful job of transfering money from taxpayers to Archer Daniels Midlands and its allies, and with no net benefit to air quality or carbon emissions? If a report is going to point to the benefits of programs like this, shouldn’t it at least acknowledge the failures?
The entire report brings to mind the comment that debates about energy and the environment in Washington feature first-rate lawyering but third-rate science. I am not surprised when I see a report like from a Washington lobbying firm. I am surprised when it bears the seal of the Brookings Institution.