stability of current spending do not appear to be consistent with the magnitude of R&D resources needed to address the challenges of limiting climate change. In regard to the private sector, compared to other U.S. industries, the U.S. energy sector currently spends very little on R&D relative to income from sales and employs very few R&D workers. Substantial increases in private-sector investments in R&D will be needed to foster innovation and technological change.
Creating and expanding markets for low-GHG-emissions technologies are also critical to spur innovation. Table 5.1 identifies a wide range of policy options, in addition to traditional R&D spending, that the federal government can use to help spur technological innovation and expand markets for low-GHG-emissions technologies. Creating some form of substantial and sustained carbon-pricing system (discussed in Chapter 4) is likely to be of the utmost importance in stimulating the development and deployment of new technologies and approaches to reducing GHG emissions.