Energy Innovation Driving Technology Competition and Cooperation Among the U.S., China, India, and Brazil

Council on Foreign Relations / by Michael A. Levi, Elizabeth C. Economy, Shannon K. O’Neill and Adam Segal
http://www.cfr.org/publication/23321/energy_innovation.html

[Michael Levi's blog] Three colleagues of mine and I have a new study on low-carbon technology out today. We’re focused on what an academic would call the international political economy of energy technology and innovation policy. In plain English, what we’re asking is this: How do you craft energy technology policy when everyone seems to want to win a clean energy race? In particular, how should the United States view others’ strength in clean technology – which could encourage them to also adopt those technologies, and lower the cost of low-carbon options for everyone – when that strength can also come at the expense of U.S. economic success?

I’ll address many of the broad themes of the study, which focuses on China, India, and Brazil, in forthcoming posts. But I’d like to focus here on one question that grounded the rest of our analysis. Efforts to deploy clean technology in the United States are increasingly sold as essential to U.S. innovation and manufacturing policy; everything else being equal, the better the United States does on clean energy innovation and manufacturing, the more it will do on deployment too. To what extent is that also true in the big emerging economies?

The answer, we found, depends a lot on what country you’re looking at. China is focused on being a clean technology leader, but, for the most part, the link to actually deploying technology is tenuous. As one person we met with in Beijing observed, China has a low-carbon economy policy, and a low-carbon technology policy, but the links between the two are weak at best. There are exceptions (wind turbines are the most obvious), and things may change in the future, but that’s where we are now.

India, in contrast, is focused much more on deploying technology, and not nearly as much on the innovation and manufacturing side. That makes sense: India has far more to gain from fixing its energy problems than from becoming a technology leader. There are also exceptions to this pattern  – the new National Solar Mission is the most obvious one – but they are rare.

Brazil, meanwhile, isn’t particularly focused on being a low-carbon technology leader (even in biofuels). But to the extent that it’s going to push the deployment of particular technologies, Brazilian leaders would much rather those technologies be domestic, or at least take advantage of domestic manufacturing. By the way, for those who think that low-carbon technology isn’t all that relevant in Brazil, think again: technology that enables agricultural productivity is critical to slowing land use change, the biggest source of Brazilian emissions.

Why does this matter? U.S. strategy on clean energy will influence global patterns of low-carbon technology development and diffusion – and that, in turn, will influence whether and how that technology is deployed. The bulk of our study is devoted to figuring out how to use that connection to promote stronger action on climate change. Take a look, and let me (and other readers of this blog) know what you think.

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