Gabe Chan February 7, 2011
2.9. Recommendations for the Budget Decision-Making Process 1. Recommendations from this chapter
2.9.2. Cross-cutting recommendations from the full report
As we pursued our research, several themes arose repeatedly. We believe these principles are important to improve the effectiveness of U.S. energy innovation policy.
The first of these themes is the need for stable long-term policies that allow industry to plan and make investments, and that provide researchers with time to collect sufficient information and to explore
dif-ferent research avenues efficiently. The Quadrennial Technology Review that DOE was undertaking at the time of writing this report is a first step that can help provide more stability by identifying multi-year programs for different technologies. Long-term stability is also needed for policies to pull technologies into the marketplace, such as standards or carbon prices.
The second theme is the need for improved coordination between agencies. Again, the Quadrennial Technology Review will help provide coordination within DOE, but ultimately a government-wide re-view (such as the Quadrennial Energy Rere-view recommended by the President’s Committee of Advisors in Science and Technology) will be needed to align DOE programs with government-wide initiatives.
For example, a price on carbon or a clean-energy standard will affect private sector activity in energy innovation and the investments that DOE should make.
The third theme is the need to have a balanced portfolio of: (a) investments in different technologies;
(b) investments in different stages of technology development; and (c) mechanisms to interact with the private sector and universities. The outcome of innovation is uncertain, and as a result managing risks requires spreading bets across a range of projects and expecting some failures. At the same time, given that budgets are constrained and bets that are too small are unlikely to yield results, not everything can be supported.
A fourth theme that emerged was the need to strengthen the interaction between the government and the private sector. Although members of the private sector testify to Congress, participate in advisory boards, and respond to requests for information, it would be useful to integrate private sector perspec-tives more fully in the design of policies and research programs. An extended use of advisory boards—
such as the Energy Innovation Advisory Board we propose—could help strengthen the connections between the public and private sectors.
And fifth, our research indicated that there is a lot of work to be done to design an energy technology innovation strategy that is guided by learning. Today, program managers are often unaware of which ap-proaches worked and which did not in areas related to their own, making it difficult to strengthen these efforts by learning lessons from past experience. Much more work can be done to collect and analyze data on the different approaches that are being implemented, and to determine which ones seem to work best, and under what circumstances. For example, better information is needed for program planning and the budget process. Information required includes: (1) the portfolio of mechanisms and projects that are in place; (2) multi-year program plans that take into account what capabilities and resources will be needed; (3) managers’ experience with what partners are able to contribute and what DOE has to contribute, which is as important as the state of technology in deciding what actions to take; (4) the pace of technology development and the challenges that are being encountered by those involved in projects;
and (5) the impacts of the programs. ARPA-E is placing an increased emphasis on self-evaluation and data collection, and is an example of an institution that is adopting this “learning” principle.
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Chapter 3