Underinvestment: the energy technology and R&D policy challenge

This Viewpoint examines data on international trends in energy research and development (R&D) funding, patterns of U.S. energy technology patents and R&D funding, and U.S. R&D intensities across selected sectors. The data present a disturbing picture: (i) Energy technology funding levels have de-clined signiÞcantly during the past two decades throughout the industrial world; (ii) U.S. R&D spending and patents, both overall and in the energy sector, have been highly correlated during the past two decades; and (iii) the R&D intensity of the U.S. energy sector is extremely low. It is argued that recent cutbacks in energy R&D are likely to reduce the capacity of the energy sector to innovate. The trends are particularly troubling given the need for increased international capacity to respond to emerging risks such as global climate change. The recent wave of interest in R&D policy in general (1) and energy R&D in particular (2) comes at an important time, particularl