House Climate Plan Recognizes Importance of Innovation

Policymakers and members of Congress have increasingly talked a good game over the past few years about supporting a strong energy innovation strategy. There’s even been bipartisan backing from lawmakers to move an innovation package this session. But, for the most part, the proposals in Congress have not stepped up to the challenge—until now.

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The House Select Committee on the Climate Crisis recently released a climate action plan that includes the first comprehensive congressional proposal on innovation that matches the scale of the challenge. With more than 100 references to innovation, some of which I discuss below, the Select Committee proposes a much-needed upgrade to the federal programs to improve clean energy technologies—now seriously outdated and ineffective—and embeds research, development, and demonstration investments in its recommendations to address pollution from each energy-using sector of the economy. We hope that lawmakers will take the recommendations in the report and include them in forthcoming innovation legislative packages.

That’s how Congress can translate talk into real action that curbs the damages to our health, economy, environment, and future expected from the climate crisis.

The federal innovation apparatus needs repairs

To slow, stop, and try to reverse the climate crisis requires a total, rapid transformation of global energy systems, driven by a bold, comprehensive set of policy and technology solutions. Technologies that are already market tested—such as wind energy and electric vehicles—can get us almost all the way to the clean economy we need, but innovation is necessary to squeeze out the last bit of climate-warming emissions from sectors like aviation, heavy-duty trucking, and heavy industry.

Moreover, policies and investments to drive innovation, if done right, can make the transformation happen faster and help more people. In the near term, these investments create jobs by accelerating the buildout of new clean energy projects and improving technologies to help revitalize domestic clean energy manufacturing. And, by improving technologies and making them more accessible, innovation broadens the political will for further climate action.

The Department of Energy (DOE) is the largest public funder of clean energy research, development, and demonstration, but it is not well-equipped to address the challenges of cutting emissions from the economy.

As we argued in our 2019 report, Transforming the U.S. Department of Energy in Response to the Climate Crisis, DOE’s innovation apparatus has an outdated mission, structure, and set of tools—and its budget is far too small to meet the scale of the climate crisis. For example, the transportation, buildings, and industrial sectors are severely underfunded relative to their share of U.S. climate-warming emissions, as Figure 1 below shows.

Our report detailed a pathway modernizing DOE’s clean energy programs and developing a federal innovation strategy that is well-suited to respond to the climate emergency. In particular, we asked lawmakers to:

  • Increase funding for DOE programs and modernize the agency’s structure, including by elevating and expanding the transportation and industrial decarbonization programs
  • Update DOE’s missions and goals to include addressing climate change, preparing for climate impacts, improving U.S. clean energy manufacturing, expanding the clean energy workforce, and prioritizing equitable energy and climate justice solutions
  • Expand the set of tools at DOE’s disposal to include technology demonstrations (large projects to test technologies that have been developed in the lab and tested at small scale), clean energy deployment, innovation prizes and challenges, and incubators and accelerators
  • Update the authorizations for the technology offices to encompass the latest technological challenges and opportunities

If implemented, these DOE upgrades would bring even greater benefits to all Americans. We were pleased to see many of these changes recommended in the Select Committee’s report.

The House plan for a strong federal innovation engine

Innovation features prominently in the Select Committee’s plan. This is a promising development, an indication of the Democrats being enthusiastic to link RDD&D (research, development, demonstration, and deployment) programs with other investments and standards to craft a comprehensive climate policy.

The report includes recommendations to restructure and expand federal innovation programs, which aligns squarely with our recommended updates to DOE. Here are some highlights:

  • Update DOE’s mission to include climate change mitigation, climate resilience, domestic clean energy manufacturing competitiveness, workforce development, and energy equity and environmental justice
  • Reorganize DOE to align with decarbonization needs, including by elevating DOE’s industrial, buildings, and transportation decarbonization efforts
  • Significantly increase funding for clean energy RD&D and specifically increase funding to advance the most promising technologies, based on an evaluation of their opportunities and challenges
  • Engage environmental justice communities in clean energy innovation programs and ensure diverse participation
  • Expand the innovation toolset, including through incubators and accelerators, prizes and challenges, large-scale demonstrations, and a foundation that could take advantage of private-sector and philanthropic funding

The report also notes innovation programs as a component of a broader suite of policies for each sector, which is the right approach. The power sector recommendations include expansion of RDD&D for grid modernization technologies and advanced renewable energy resources, such as improved solar panels, offshore wind turbines, and novel geothermal energy technologies. The transportation sector recommendations include innovation spending to develop decarbonizing solutions for aviation and marine shipping. The building sector recommendations include support for continued R&D for building heating technologies, building-to-grid integration, and advanced building construction. And the industrial sector recommendations include a robust innovation plan, as my colleagues and I describe in more detail here.

Ensuring innovation policies include deployment

A strong strategy requires policies to get technologies from the lab to commercial-scale projects and widespread use. The Select Committee’s plan gets this right by including financing mechanisms and deployment grants and incentives, new institutions and programs to drive massive investments, smart procurement policy, and standards to drive adoption of clean technologies.

The recommendations include large expansions to financing and deployment programs, including: the Loan Programs Office, which finances large-scale innovative clean energy projects; grant programs like the Energy Efficiency and Conservation Block Grant program; and tax incentives to drive clean energy adoption. These programs provide a landing pad for clean energy technologies emerging from the lab and DOE demonstration programs.

The report also recommends establishment of a national climate bank, which would finance clean energy, decarbonization, and climate resilience projects. Recent analysis found that $35 billion in initial capital for a climate bank could drive $500 billion in new public and private investment and sustain 680,000 to 1.7 million new jobs for the next five years.  

In the same vein, the report proposed a long list of procurement policies (requiring the federal government to purchase increasingly clean products) and standards that would create a massive new source of demand for clean industrial products, clean vehicles, building decarbonization technologies, and clean power.

Congress should move these ideas

Innovation has been a hot topic of conversation this Congress due to its broad popularity and bipartisan political support. Lawmakers have introduced bills, some piecemeal and some packaged, to update federal innovation programs. But even the best packages advanced over the past few years are still missing key components. The Climate Crisis Committee’s plan would fill in the gaps.

We hope lawmakers will use it as a roadmap for crafting a strong federal innovation engine. The time is ripe for to move this bold plan forward and into action that delivers a better future for us all.

About the Authors

Arjun Krishnaswami

Policy Analyst, Climate & Clean Energy Program

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