Class 5 - The Structure of an Energy Technology Revolution

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Given the powerful and increasing importance of energy innovation in climate change and security contexts, this class will provide students with a close look at the systemic challenges now faced by the energy innovation system and draw on lessons from prior classes for possible organizational solutions.

Class Five will review the challenges to the energy innovation system, including both institutional organizational challenges and underlying economic challenges, affecting energy technology advance.

The class will be organized with the instructor presenting a broad framework as the backdrop for the discussion the one required reading, followed by a discussion of other policy documents on key energy issues led by students.

The instructor will note that the environmental and geopolitical costs of America's addiction to fossil fuels may make a major federal program to stimulate innovation in energy technology justifiable. Given the central role of energy in the economy and the variety of new technologies needed, this program may need to approach the dimensions of a major military transformational effort. It must go beyond research and development to include all aspects of the innovation process, and should be technology neutral as far as possible, consistent with the need for measures to overcome obstacles specific to particular technologies. Ideally, the instructor will note, such a technology supply-side program should be accompanied by policies that ensure a long-term, sustained increase in the price of carbon-based energy, for example a carbon tax or a cap-and-trade system, to foster technology demand. However, given the vested interests threatened by such measures, political support for such demand-side policies in Congress and the executive branch seems some years away. The political barriers to a technology supply-side strategy, on the other hand, are not as high.

Given the depth of the need for new energy technology, a supply side program arguably will be needed even if such measures are adopted. Numerous authoritative publications have called for an expansion of energy research and development as a complement to demand-side measures. However, the specific mechanisms by which the development, deployment and diffusion of these technologies might be facilitated by government action have been left largely unstudied. A hard look at these specific mechanisms will be the subject of the class.

Lecture Notes

Lecture 5 (PDF)

Readings

Required Reading

Bonvillian, William B., and Charles Weiss. "Taking Covered Wagons East: A New Innovation Theory for Energy and Other Established Sectors." Innovations 4, no 4 (2009): 289-300.

Other Readings for Class Discussion

The Future of Coal: Summary Report. MIT, 2007. (PDF - 1.5MB)

Socolow, Robert H., and Stephen W. Pacala. "A Plan to Keep Carbon in Check." Scientific American 295, no. 3 (2006): 50-57.

Climate Change 2007 Synthesis Report: Summary for Policymakers. Intergovernmental Panel on Climate Change. 2007. (PDF - 1.9MB)

Chapter 1 and Summary. The Future of Geothermal. MIT. 2007. (PDF - 4.8MB)