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3 A Framework for Planning and Implementing Energy Research and Development
Pages 25-44

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From page 25...
... A deliberate effort has been made to provide for steady annual increases in the resources devoted to the Basic Energy Sciences program, supporting research and technical analysis. Cutbacks in many of the applied R&D programs have been justified by intentions to reallocate R&D funding In an "upstream" direction-toward the basic research end of the spectrum.
From page 26...
... 26 human genome project,
From page 27...
... Cutbacks in company-funded R&D, like those of the federal government, have been unevenly distributed across f ields of application. Constant dollar company funds for conservation and renewable energy technologies declined 83 percent from $~.6 billion in 1979 to $284 million in 1987.
From page 28...
... . LESSONS FROM R&D PROG~S ~ UNSTRAPS The committee conducted a limited assessment of the federal energy R&D programs to gather information that could guide the design of future efforts targeted at reducing emissions of GHGs.
From page 29...
... It is axiomatic for good management of large programs that clear and relevant objectives be established before the program is begun and that the program be periodically reviewed relative to its objectives. Many federal energy R&D programs appeared to the committee to lack any clear economic rationale.
From page 30...
... General lessons from federal energy R&D experience at DOE can be combined with the experiences of programs dedicated to civilian technology development such as at National Advisory Committee on Aeronautics/National Aeronautics and Space Administrations and at the U.S. Department of Agriculture,'~' to provide the following general guidance for the design of GHG reduction R&D strategies: ~ To the extent possible, applied R&D programs can and should involve industry participants in establishing objectives and carrying out the research.
From page 31...
... Public funds can be used to subsidize this process through demonstration programs, but care must be taken to avoid the mistakes made in earlier energy demonstration projects. Some federal energy demonstration programs of the 1970s (e.g., Clinch River Breeder Reactor)
From page 32...
... As a result, the market price of high-GHG technologies rises relative to those having low GHG emissions. Again, the global economy would tend to shift away from fossil fuels, thereby reducing emissions of GHGs.
From page 33...
... Notwithstanding industry views to the contrary, a variety of policies in the past spurred development and adoption of technologies. These policies included federally mandated performance standards such as those on corporate average automotive fuel economy and large-appliance energy efficiency; taxation policies, including gasoline taxes and investment tax credits for adoption of conservation and renewables technologies; modification of federal, state, and local regulations, such as building codes; and electric utility regulatory policies that affect private payof fs to adoption.
From page 34...
... The global nature of the markets for technologies that produce and consume energy may also create new opportunities for collaborative R&D on alternative energy technologies with other countries. ROLE OF THE PRIVaTE SECTOR Based on lessons learned from R&D experience relevant to civilian technologies, the private sector will play a vital role in achieving significant reductions in GHG emissions.
From page 35...
... A p A L T A L Market stimulation L and intervention aL ~ lead role, P ~ partnership, and A Advisory role in establishing priorities and providing funding for research, development and demonstration.
From page 36...
... While there are some notable exceptions, the committee concludes that federal energy R&D programs have often been hampered by conflicting objectives, political interference, inertia in program selection, and preoccupation of top management with defense issues. As a result, the payoff in terms of successful commercialization of civilian energy R&D programs has been modest at best.
From page 37...
... The committee therefore recommends that Congress consider investing DOE's civilian energy functions with accountabilities that are distinct and separate from its defense energy functions. The committee also suggests that Congress consider alternative budget strategies for DOE such as those outlined below.
From page 38...
... These are building on informal cooperative relationships developed in the electric utility industry and the petroleum and gas sector. Existing arrangements facilitate a continuing development of non-fossil-fuel electrical generation opportunities as well as transportation options.
From page 39...
... The s must take advantage of resources such as forest management; simple, small-scale, ef f icient electrical generation; efficient public transportation; high end-use efficiency; and emission control schemes that will permit continued exploitation of world coal resources. At present the options are available for technical means to arrest GHG emissions while providing for energy needs.
From page 40...
... where the existence of other benefits may reduce the cost of implementation. The Insurance Strategy need not be directed exclusively on alternative energy technologies aimed at the domestic market.
From page 41...
... Prevailing market forces must be considered and government actions may be required to achieve specific national objectives. In the past, particularly at times of crisis, the government has used intervention mechanisms such as taxes, tax credits, energy efficiency standards, loan guarantees, subsidies, federal procurements, and liability limitations to influence the supply and demand of fuels and energy resources.
From page 42...
... GHG emissions over different time horizons. However, the technology-adoption actions identified in the various market sectors relate to existing technologies that can be shown to be reasonably cost-effective (i.e., economically viable aside from their GHG emissions reduction value)
From page 43...
... 6. Private sector underinvestment in R&D occurs not because projects are long term and high risk but because marginal social returns exceed marginal private returns.
From page 44...
... The French nuclear program, which shares many of the undesirable features of the British nuclear program and both the British and French programs in computers and aircraft, appears to have been relatively successful in producing reactors for extensive domestic use. This success was aided by the existence of a state-owned monopolistic domestic customer for the French reactors, which facilitated design standardization and reduced regulatory obstacles to adoption.


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