A recent "60 Minutes" story highlighted the demise of a few high-profile clean-tech companies that received federal funding. The story neglected to report why clean technology is vital to the future of our economy and environment in the first place, and therefore why it makes sense for the government to promote the development of wind  and solar  energy, electric vehicles , and other clean tech. Simply put, the goal is to transform our economy from one based on fossil fuels that emit heat-trapping gases to one based on clean energy  that won't contribute to global climate change .This sweeping change will not occur through market forces alone, unless an economy-wide carbon price  is established that provides a market-based payoff to clean-tech investment. Absent a clear outlook on when carbon pricing might occur, if ever, makes developing clean technologies too expensive for the private sector. Progress often is measured over decades rather than just a few years. However, with a government partner, companies are more willing to take on these challenges.
It's easy to find examples of well-designed government incentives or investments in basic research and development leading to meaningful technology transformations. In the energy sector, industry and government came together over the past three decades to research and develop new technologies that directly led to unlocking vast quantities of natural gas embedded in shale formations across the United States. Today, we are only just beginning to realize the benefits of that investment, but one notable impact is that cleaner natural gas-fired generation met 30 percent of U.S. electricity needs in 2012 compared with 22 percent in 2007.
The Department of Energy's long-term investments in clean energy , such as onshore wind generation, solar photovoltaics, LED lighting, and electric vehicles have already been successful in increasing deployment and dramatically reducing prices for these technologies. Notably, renewable energy capacity nearly doubled to 86 GW from 2009 to 2012, and the levelized cost of electricity generation for large-scale solar dropped by more than half during that same period.
As any investor knows, individual investments don’t always pay off, and we should not be surprised that the same holds for the government as well. Yet, by selectively focusing on just a few individual companies over the past couple of years, the "60 Minutes" story sets aside not only the many successes, but also the larger story. When technology costs come down as a result of these public-private partnerships, new industries develop and drive economic growth. While creating a clean energy economy is a complex and long-term proposition, government incentives and investments are critical if we are to reduce the emissions that are changing our climate.