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Friday, August 13, 2010

In Defense of Bill Gates

By Devon Swezey and Rob Atkinson

Originally posted at the Huffington Post.

If you want to understand why we haven't made any measurable progress on energy and climate change for the last 30 years, there's no better place to look than the visceral partisan reaction to Bill Gates' recent call for major federal investment in energy innovation.

Gates has been speaking out publicly over the last few months--first in a blog post on his website, then in a talk at the TED conference, and now as part of the American Energy Innovation Council--for radical energy innovation to drive carbon emissions to zero. In a climate discourse dominated by targets and carbon caps, Gates has provided a refreshing and clear-eyed look at the first-order importance of direct public investment to develop clean, affordable technologies to replace fossil fuels on a global scale.

But proving once again that no good deed goes unpunished by both the right and the left, Gates was roundly criticized by partisans on both sides for speaking truthfully about the enormous climate and energy challenge.

On the left, environmental advocates attacked Gates for daring to suggest that innovation will be critical to dramatically reducing greenhouse gas emissions, recycling the tired mythology--repeated ad nauseum by Al Gore--that "we have all the technologies we need" and "all we lack is political will."

On the right, libertarians and conservatives, while not hypnotized by the myth that clean energy is an affordable alternative to fossil fuels today, attacked Gates for proposing a substantial role for government in innovation, conveniently ignoring the long and successful history of government investment in developing nearly all the high-tech products we take for granted today.

Both the left and the right are wrong and Gates is right. The intense reaction from both sides to Gates' message shows why so little progress has been made on shifting away from fossil fuel energy over the last 30 years.

The Off-the-Shelf Mythology: We Don't Have All the Technology We Need

After publishing his article and speaking at TED, climate and environmental advocates on the left immediately attacked Gates for centering on the need for breakthrough technologies and radical technology innovation to solve climate change and sustainably power the planet.

Climate blogger Joe Romm of the Center for American Progress called Gates' position "myth-filled," and "suicidal," and dismissed the need for R&D investment on the scale that Gates advocates.

David Roberts of Grist, an influential online environmental magazine, penned an article titled "Why Bill Gates is Wrong," arguing that "new social arrangements" with existing technology are as important as new technology in creating a sustainable future.

The idea that "we have all the technology we need" is not new. Indeed, it has been a mantra for the environmental left for over 30 years. In 1976, Amory Lovins, the President of the Rocky Mountain Institute (RMI) and one of Joe Romm's mentors, predicted that by the year 2000 renewable energy, excluding hydroelectricity, would supply nearly one-third of U.S. energy consumption. The actual contribution of these energy resources in 2000 was 3 percent. In 1984, Lovins, who is considered a national energy efficiency guru, predicted that "we see electricity demand ratcheting downward over the medium to long-term." In fact, America's electricity consumption increased nearly 66 percent over the following 20 years.

Despite the fact that Lovins' many predictions have been so obviously wrong for so many years, he has gained notoriety and attracted high-profile disciples who continue to preach that we don't need new technology. Top of the list is Former Vice President Al Gore, who told the Daily Show's Jon Stewart that "we have all the tools we need" to solve global warming. Joe Romm repeatedly dismisses the need for breakthrough innovations, calling it an "illusion."

Against this view is the consensus among energy experts and scientists that innovation, both incremental and radical, is necessary for a whole suite of technologies in order to achieve global carbon mitigation goals. Most clean energy technologies remain much too expensive to gain the necessary market penetration, especially in low and medium-income countries. This view is shared by leading energy scientists like Nate Lewis of Cal Tech and Secretary of Energy Steven Chu, the latter of who has repeatedly argued that Nobel-caliber breakthroughs are needed in areas like solar photovoltaics, advanced batteries for vehicles and energy storage technologies.

These experts also recognize the need for prioritizing major government investments to develop these technologies and make clean energy cheap. Last year, 34 Nobel prize winning scientists wrote a letter to President Obama calling on him to honor his commitment to investing $150 billion in energy R&D over 10 years, writing that "rapid scientific and technical progress is crucial to...reducing greenhouse gases at an affordable cost."

Take the case of solar. Issues like system reliability, integration with existing systems, control infrastructure, and installation economics pose key technical issues that must be addressed if we want to have greater penetration than the forecasted 5 percent to 10 percent in the next decade. The integration of a high volume of inverter-based photovoltaic systems will require not only a smart grid, but also advances in present-day inverters. Sophisticated algorithms need to be designed to ensure interactive controls like passive monitoring and active control that will allow PV systems to disconnect when necessary but stay on-line when drops in utility voltage and frequency levels occur. Currently, the technology is not there to support massive movement to solar PV.

Perhaps the greatest indictment of the left's dismissal of breakthrough technology is an honest assessment of the scale of the global energy and climate challenge. In 2007, humans consumed roughly fifteen terawatts (trillion watts) of energy. Humans will need to produce roughly 60 terawatts of energy annually by 2100, if every human on earth is to reach the level of prosperity enjoyed by the world's wealthiest 1 billion people. Even assuming an increase in energy efficiency of 30%, global energy demand would still triple by century's end.

To give a sense of scale, providing 10 TW of carbon free power, less than one-third of what will likely be necessary by the end of the century, would require the equivalent of building 10,000 new 1GW nuclear reactors, or a new nuclear reactor every other day for the next 50 years. This is, quite simply, an impossible task with current technology. Radical innovation to reduce the costs and improve the performance of low-carbon energy technologies is the only possible path forward.

The Lone Inventor Mythology: Government Investment is Key

On the right, conservatives and libertarians dismissed Gates for acknowledging a substantial government role in innovation; something they know is better left to the private sector.

James Pethokoukis, a right-leaning business and economics columnist for Reuters, suggested that Gates' "Big Government" plan is "a long-shot at best," arguing that there is "no clear-cut evidence" that government R&D provides any economic benefit.

Robert Michaels, an Adjunct Scholar at the libertarian Cato Institute, urged Gates to remember how he made his fortune ostensibly free from government intrusion:

"Can you imagine where you (Gates) would be now had there been a National Computing Strategy Board to coordinate research and investments? None of us really want to know what might have happened, although there is a chance we would have gotten something better than Windows Vista."

But alas, as with most libertarian critiques, blind disdain for anything involving the government has led them to misunderstand (or deliberately misrepresent) the history of government involvement in technology innovation.

Against the "lone inventor" mythos that is so widely propagated in the United States, it has been clearly documented that most of the U.S. technologies that we now take for granted today, including jet engines, microchips, computers, and the Internet, were the result of direct investment and support from the public sector--the same thing that Gates and Co argue is needed to drive innovation in new clean energy technologies today

There is a pervasive collective amnesia among not just libertarians and conservatives but increasingly mainstream environmentalists like Joe Romm--who perpetually derides massive public investment in clean technology as "Big Government"--about the critical role that the U.S. federal government has played in developing the technologies that have driven waves of U.S. economic prosperity.

Personal computing is one clear example. The story of the PC is consistently misrepresented as the genius of lone inventors tinkering away in secluded garages. In reality, from the beginnings of the computer industry, federal agencies promoted critical research into computing hardware and deployed early computers throughout the federal government. Indeed, the roots of IBM come from early contracts with the Census Bureau. Moreover, not only did government provide the key support for research, including often bringing researchers from the public and private sector together to better share and commercialize results, but computer, semiconductor and software technologies were, according to economics professor Vernon W. Ruttan, "nourished by markets that were almost completely dependent on the defense, energy, and space industries."

The story is the same for microchips, where public procurement played the key role in allowing early semiconductor firms like Fairchild, Texas Instruments and Intel to not only sell enough chips to gain needed revenue to reinvest in R&D but to get the scale needed to bring down prices. Throughout the early 1960's, the federal government bought virtually every microchip that firms could produce--so many that the price of a microchip fell from $1,000 per unit to $20 per unit in the span of a few years.

The Education of Bill Gates

Gates himself was an early preacher of the view that private sector and the magic of the free market created the PC industry. Defending his company on the day the Justice Department brought an anti-trust suit against Microsoft in 1998, Gates declared, "The PC industry is leading our nation's economy into the 21st century...there isn't an industry in America that is more creative, more alive and more competitive. And the amazing thing is all this happened without any government involvement."

Yet, to his credit, Gates has since taken a hard look at the facts and recognized the important role government has played. Indeed, he now willfully acknowledges that he owes much of his career to early government investments in information technology, telling the Washington Post:

"The Internet and the microprocessor, which were very fundamental to Microsoft being able to take the magic of software and having the PC explode, were among many of the elements that came through government research and development."

The private-sector executives of the American Energy Innovation Council point to similar government investments across a whole host of technologies that led to the development of world-leading industries:

"Federal programs have been responsible for a wide range of game-changing technologies: new unmanned aircraft systems save the lives of American soldiers serving overseas; the Internet was born from military programs; and many of the most important medical breakthroughs of the last century came from our world leading investments in medical science research at our universities and laboratories."

This is not to say that entrepreneurial drive and risk taking were not also critical to America's innovation success story in the second half of the 20th century. Of course they were. But what made America the leader of the world is that we combined both factors: brilliant entrepreneurs like Gates and a visionary federal government willing to make the kinds of investments needed to foster technology revolutions.

Why the Left and Right Reject Innovation

So why do both the right and left not only ignore the message but shoot the messenger that we need clean energy innovation? There two main reasons. First, admitting that we need innovation threatens the core project of both: the left's job of getting more government, the right's of getting less.

The left fears, perhaps with some truth, that if policymakers realize that we don't actually have the technology needed to address climate change, they will balk at putting in place carbon caps. In contrast, the right fears, again probably with some justification, that if policymakers realize that we don't have the technology, they will empower government to play a key role in developing it.

But there is a deeper reason for the left and right's attack on the apostles of clean energy innovation. Neither pay much attention to innovation and neither think the government has much to do with it. For the left, government's job is to regulate business, (e.g., cap carbon emissions) not help them. How they meet these caps is their problem, not our problem. For the right, government's job is to get out of the way and let the magic of the market do its thing. For them, if we don't have a technology, by definition it means we don't need it. For to admit anything else is to admit that the market alone is not the final arbiter for technologies; the government is.

But, ironically by attacking the message that we need a robust clean energy innovation policy both the left and right are likely to have their worst fears realized. For the left, without clean energy innovation climate won't get solved. For the right, without clean energy innovation big government regulations, and the significant costs they impose, will be the only, albeit inadequate, path forward.

So how do we go forward? Gates has pointed the way (as has Breakthrough and ITIF). Gates and company call for public investment of a similar scale as in the last half of the 20th century to catalyze both incremental and radical innovation in the energy sector. Their conclusion is the same as a growing "energy innovation" consensus among Nobel scientists, high-tech businesses, and leading think tanks and universities.

To break the deadlock stalling the transition to clean energy technologies in the United States and around the world, at minimum, direct federal funding for energy R&D of the scale that Bill Gates advocates--$16 billion per year--is necessary to make clean energy cheap. Even greater investment would in fact be quite prudent.

If we are ever going to deal with our energy and climate challenges, then both the left and the right need to take a cold hard look at the facts, instead of attacking Bill Gates for injecting a needed dose of realism into the climate debate.

Rob Atkinson is President of the Information Technology and Innovation Foundation, a Washington, DC-based think tank. He is also author of The Past and Future of America's Economy: Long Waves of Innovation that Drive Cycles of Growth. His focus is on IT and innovation and policy to support them.

Devon Swezey is Project Director at the Breakthrough Institute and co-author of "Rising Tigers, Sleeping Giant."

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