Energy Innovation and Military Procurement

"The history of tech innovation in the U.S. is really a history of military procurement, R&D funding, science and engineering education, and demonstration projects," says Michael Shellenberger. "We’re missing a demanding customer, which is what the Pentagon has been."

Ever since 2004's "The Death of Environmentalism," Shellenberger and partner Ted Nordhaus of The Breakthrough Institute have promoted R&D funding for clean energy over legislation to put a price on carbon. An ideal approach would include both public investment and carbon pricing - as well as regulatory standards. Indeed, investment without a cap on carbon may lead to a "consumption effect" that causes overall emissions to rise. Alas, meaningful climate legislation is now off the table in the U.S. Senate.

The military procurement strategy mentioned by Shellenberger is discussed in a recent opinion piece in Nature by John Alic, Daniel Sarewitz, Charles Weiss, and William Bonvillian ("A new strategy for energy innovation" sub. req.):

For two main reasons, government R&D by itself, almost regardless of its scale, cannot foster innovation on a broad front. The first reason is simply that, although publicly financed research deepens the knowledge base and sometimes leads directly to technological advances, innovation has many sources other than R&D. ... Second, R&D is difficult to manage and often unproductive in the absence of strong feedback from customers and users.

The DOE [Department of Energy] neither buys nor sells goods or services based on energy and climate innovations. It therefore has few incentives to manage R&D in accord with marketplace needs rather than scientific norms. ...

The DOD [Department of Defense] is better placed for catalysing rapid innovation in energy technologies than the DOE because the DOD is a major customer for energy-consuming systems and equipment for its roughly 500 permanent installations, as well as for operational equipment (spending $10 billion a year on liquid fuels alone). The scale of the resources that the DOD brings to technology development is impressive. It employs more than 30,000 engineers and scientists in R&D and procurement, and its annual R&D spending comes to about $80 billion, with procurement spending in excess of $100 billion. The DOD thus has the incentives and capacity to be a smart and demanding customer for new energy technologies, as well as a test bed for new ideas such as high-energy-density electrical storage.