Cleantech Funding, Including for Energy & Transport, at “Critical Juncture”

The Brookings Institution (BI) today released a report finding that not only is energy innovation hugely important to America’s (and the globe’s) future it represents a $1.4 trillion global business opportunity that the Trump Administration seems ready to throw away (my assessment, not necessarily BI’s but I doubt they would disagree). Low-carbon technology “holds great potential to spark high-quality growth in U.S. regions, support the manufacturing sector, and improve the trade balance,” BI notes. But the key question BI notes is the following:

“Congress especially, but also the private sector and states and regions, stand at a critical juncture this spring. With the economic potential for workers and regions of cleantech innovation widely acknowledged, the question has become: will the U.S. compete?”

This is especially critical as the Trump Administration prepares to gut key R&D programs within the U.S. Department of Energy (DOE) and Advanced Research Projects Agency (ARPA-E) to both save a few bucks and as a client mine said, “relive a past that is just over and done.”

BI assessed the status of U.S. cleantech innovation, which includes energy and transport, looking at technology patenting activity as a key indicator for monitoring the development of new technologies, as represented by the volume and topics of new patents resulting from public and private funded research. What do these data show? BI notes:

“Even as cleantech patenting has grown over the years, serious concerns remain about the competitiveness of the U.S. cleantech innovation scene. At the same time, while much of America’s patenting takes place in relatively few large metropolitan areas, significant cleantech innovation activity extends into all regions of the country. That breadth underscores both the relevance and potential of low carbon innovation.”

According to BI, the findings provide a mixed picture of U.S. cleantech innovation that includes:

• U.S. cleantech patenting has grown significantly since 2001, outpacing growth in all U.S. patents, but may now be flagging. Since 2001, the total number of granted patents in the cleantech sector has more than doubled—from a little less than 15,000 cleantech patents granted in 2001 to approximately 32,000 in 2016. With that said, the number of cleantech patents granted in the country has declined by 9 percent between 2014 and 2016.

• Cleantech patenting is concentrated in relatively few technology categories. Overall, a total of 186,500 patents have been granted in the United States since 2011 across 14 cleantech categories. Of this activity, advanced green materials, energy efficiency, and transportation each accounted for fully 18% of the total patenting, while energy storage accounted for another 15%. The figure below shows the differences in the pace of patenting across different cleantech categories.
• U.S. cleantech patenting is both concentrated in large metropolitan areas and widely distributed across diverse regions of the country. Cleantech patenting, in terms of absolute patent issuance, is highly concentrated in a relatively small number of larger metropolitan areas. 10 metro areas ranging from Boston and Detroit to Houston, Minneapolis, San Francisco, and San Jose accounted for 38% of the cleantech patents developed by U.S. inventors since 2011, while 20 metro areas accounted for 52%. And yet, the patent data make clear that cleantech innovation is also widely distributed across diverse regions of the country as the figure dhows below. I bet if I overlaid these areas with the election results (electoral college and popular vote) there might be an interesting trend line to draw. And I will do that analysis and show it in a separate post. But nevertheless, this is not a Silicon Valley elite issue we’re dealing with here. The coming budget gut is as much a Heartland issue as it is a Silicon Valley issue.

BI notes that given the size of the global clean energy economic opportunity, the U.S. can’t afford to give up its lead on innovation in the growing cleantech market, particularly to China.

“For that reason, Congress should set aside the skinny budget and draw on years of bipartisan support for energy innovation to coalesce around a core list of minimum viable supports for low-carbon innovation and growth. Most crucial will be provisions to maintain clean energy R&D appropriations at viable levels; maximize the impact of the nation’s 17 national energy laboratories; and preserve the Advanced Research Projects Agency (ARPA-E) while maintaining and scaling up the nation’s energy innovation hubs and institutes. For their part, states and regions can and must step up to invest more robustly on their own in low-carbon innovation, just as must the private sector, which must argue more forcefully for essential federal supports even as it moves to shoulder more of the burden itself.”

Tammy Klein is a consultant and strategic advisor providing market and policy intelligence and analysis on transportation fuels to the auto and oil industries, governments, and NGOs. She writes and advises on petroleum fuels, biofuels, alternative fuels, automotive fuels, and fuels policy.