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This post by Mark Muro<\/a>, fellow and policy director, Metropolitan Policy Program at the Brookings Institution, was first published on the Brookings’s Up Front Blog<\/a>.<\/em><\/p>\n As the spin cycles speculate<\/a> on whether the Kerry-Lieberman Senate climate bill<\/a> has a chance to pass this year, I\u2019ve been looking at its clean energy innovation provisions and am underwhelmed. I\u2019ll defer to our colleagues at the National Commission on Energy Policy for a good side-by-side<\/a> comparison of Kerry-Lieberman with the Waxman-Markey bill<\/a> that passed the House last year.\u00a0But suffice it to say Kerry-Lieberman looks surprisingly similar to the only so-so House bill on innovation matters.<\/p>\n <\/span><\/p>\n The Advanced Research Projects Agency-Energy<\/a> (ARPA-E), which is beginning to support \u201cdisruptive\u201d efforts to develop transformational clean energy breakthroughs, is slated to receive cap-trade allowances.<\/p>\n Allowance sale revenue is also reserved for support of state-level renewable energy and efficiency programs to help accelerate market uptake and deployment of low-carbon products and services, like building retrofits and solar panel installations.<\/p>\n And beyond that there\u2019s the usual grab-bag of technology-specific and fragmented research and deployment efforts (with the feel of interest-group pandering) around nuclear power, clean coal, advanced batteries, natural gas vehicles, plug-in hybrids, the steel industry, and so on.<\/p>\n The problem, though, is that while all of these items are well and good, nothing here answers to the urgency and scale of the nation\u2019s energy innovation needs.<\/p>\n All told, the Kerry-Lieberman outline would, like Waxman-Markey, apply about 2 percent (or $1 billion to 2 billion a year) of its allowance revenue to clean energy R&D in the bill\u2019s early years, and about 5 to 7 percent ($3 billion to 7 billion) to clean-tech research and deployment in various sectors over time\u2014a little less than the House bill did<\/a>. (Check here<\/a> for my Brookings colleague Ted Gayer\u2019s helpful tabulation of the year-to-year allowance distributions in the bill). So that\u2019s real money.<\/p>\n However, while solid-sounding by itself, that\u2019s paltry in the real scheme of things. All told, by our calculations, the U.S. needs to be spending $15 to $25 billion <\/em>a year on federal clean energy R&D alone just to attain a research intensity on a par with other innovation driven sectors as health, or IT, or for that matter agriculture.\u00a0Since that number is currently running to only $4 billion or 5 billion a year, the stark fact is that the nation needs to come up with another $10 or 20 billion in clean energy research investment each and every year for the foreseeable future\u2014and starting now.<\/p>\n From that perspective, that Kerry-Lieberman would only manage to reserve for energy R&D pursuits $1 billion to 2 billion a year\u2014or maybe $4 to 8 billion to be generous\u2014must be counted a major disappointment.\u00a0Once again, it\u2019s extremely disappointing to see that the basic congressional dynamic continues to require massive allowance giveaways that \u201cgive away the store\u201d in order to obtain the political support of interest groups.\u00a0And its disappointing to see once again the failure in this process to serve the nation\u2019s clear interest.<\/p>\n In the end, the American Power Act\u2014like its House predecessor\u2014underscores that Congress and the country are simply not yet serious about de-carbonizing the nation\u2019s energy system, catalyzing a clean new economy, and limiting global warming to acceptable levels.\u00a0Here\u2019s hoping further negotiations will bear down more thoughtfully on those critical imperatives.<\/p>\n