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The Department of Energy has announced it will spend $3.7 billion to “jumpstart America’s decarbonization industry.” While most climate policy discussions focus on how to reduce greenhouse gas emissions, this initiative focuses on how to remove greenhouse gases that are already in the atmosphere.
One of the most promising and significant parts of the announcement is the acceptance of awards to encourage the technology. From the release:
- Commercial and pre-commercial award for direct air capture – DOE’s Office of Fossil Energy and Carbon Management (FECM) announces Direct Air Capture Award for support and awards totaling $115 million to promote various approaches to direct air capture. The Direct Air Capture Pre-Commercial Award provides up to $15 million in awards to incubate and accelerate research and development of breakthrough direct air capture technologies. The Direct Air Capture Commercial Award provides up to $100 million in awards to eligible direct air capture facilities for capturing CO2 from the atmosphere. Read the full Direct Air Capture Award competition announcement.
This represents only a small fraction of the relevant funding – and less than I would like – but it is still good to see some recognition of the power of prizes to drive desired innovation, particularly in the context of climate change.
As long-time readers may know, I’ve been advocating for climate awards for some time. In 2011, I published Eyes on the Climate Prize: Rewarding Energy Innovation for Achievement
Climate Stabilization” in Harvard Environmental Law Review, in which I argued that technology incentive rewards are particularly well-suited to problems like climate change. Here’s the summary:
Stabilizing atmospheric concentrations of greenhouse gases at double their pre-industrial levels (or below) will require emission reductions far greater than can be achieved at a politically acceptable cost with current or projected levels of technology. Significant technological innovation is required if the nations of the world are to move closer to the proposed emission reduction targets. Neither traditional federal support for research and development of new technologies nor traditional command-and-control regulations are likely to encourage sufficient innovation. Technology incentive awards, on the other hand, have the potential to significantly accelerate the rate of technological innovation in the energy sector. This article describes the theory and history of the use of incentive awards to encourage and direct inventive efforts and technological innovation, and identifies several comparative advantages that incentive awards have over traditional grants and subsidies to encourage the invention and development of climate-friendly technologies. Although no policy measure guarantees technological innovation, greater reliance on incentive awards would increase the likelihood of developing and deploying the necessary technologies in time to change the world’s climate future. Whatever their faults in other contexts, the awards are particularly well-suited to the challenge of climate policy.
I hope this recent announcement is a sign of more to come.
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