Regaining America’s Competitive Edge: Energy Research and Development by the Numbers

March 4, 2008

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On Wednesday, the House of Representatives Committee on Science and Technology will plan the Department of Energy's research-and-development budget for the 2009 fiscal year. America’s competitive edge in energy R&D has been eroding for years because of budget cuts. It’s time to restore that edge and spur the creation of a low-carbon economy to confront the threat of climate change and compete in a global economy by doubling the budget for energy R&D.

To help restore our competitive edge, the Center for American Progress has put forward plan to achieve a low-carbon economy. At the center of the plan is a cap-and-trade system for carbon emissions that would simultaneously reduce carbon emissions and generate revenue. Twenty percent of that revenue can go directly to policies that spur technological innovation. But increasing the Department of Energy's research-and-development budget is a crucial component of transitioning to a low-carbon economy.

CAP takes a by the numbers look at why the energy research-and-development budget must be doubled:

Federal medical and military research and development investments have risen...

• 300 percent: The rise in federal spending on medical research during the past 25 years.
• 250 percent: The rise in federal spending on military research during the past 25 years.

...but federal investments in civilian research have declined overall.

• $1 billion: The money spent on civilian R&D in the U.S. in 2006.
• $7 billion: The money spent on civilian R&D in 1980.
• 85 percent: The drop in the Department of Energy's budget for energy R&D from 1978 to 2005.

All this, despite the fact that even the private sector has placed a high value on energy innovation.

• $2.4 billion: The money invested by venture capitalists in energy technologies in 2006 alone.
• $55.4 billion: The annual revenue of solar, wind, biofuels, and photovoltaic cell companies in 2006.

We need policies that will limit global temperatures and reduce trade with hostile countries, and we need innovative R&D to make it happen.

• 2 billion: The number of cars needed to run at 60 mpg in order to keep carbon emissions at safe levels.
• 50 percent: The rise in efficiency of coal-fired power plants required to keep carbon emissions at safe levels.

How can we fund this research and development? A moderately aggressive cap-and-trade system would generate tremendous revenue, and about 20 percent of that revenue could be directly reinvested into research and development.

• $746 billion: Total expected revenue from cap-and-trade auctions over the period 2009-2018.
• $152 billion: Total federal research-and-development expenditures over the period 2009-2018, as recommended by the Center for American Progress.
• $9 billion: Total research-and-development expenditures specifically for the Department of Energy over the period 2009-2018, as recommended by the Center for American Progress.

Read more about the transition to a low-carbon economy from CAP:

• A New Strategy to Spur Energy Innovation
• Capturing the Energy Opportunity