4 key takeaways on the future of funding for climate innovation
We’re living in an exciting moment. With the passage of the Inflation Reduction Act (IRA), Infrastructure Investment and Jobs Act (IIJA), and the CHIPs and Science Act, we are investing in climate at levels higher than anything we’ve seen for a generation.
But it can also be challenging for policy staff across the federal government, nonprofit and private sector to understand where the resources are going, and how we should prioritize investments going forward. Are we investing enough in different sectors, stages and solutions to reach our climate goals? And as we enter a new appropriations cycle, where should we focus?
Alongside the launch of EDF’s new Climate Innovation Funding Tracker, we gathered experts to talk through the resources available to navigate federal investments for climate innovation, as well as where funding gaps, opportunities and challenges lie ahead.
Panelists included Hoyu Chong, Senior Policy Analyst at the Information Technology and Innovation Foundation (ITIF); Tanya Das, Associate Director for Energy Innovation at the Bipartisan Policy Center; Arjun Krishnaswami, Special Advisor to the Chief of Staff at the Office of the Secretary of Energy; and Nicholas Montoni, Professional Staff Member on the House Subcommittee on Energy & Water Development Committee, but who spoke from the perspective of their previous professional experience working on appropriations at Third Way.
Here are 4 key takeaways from the discussion:
1. While new federal climate laws injected an immense amount of resources for climate, there’s still more work ahead to reach our 2030 and 2050 emissions goals.
Many analyses project that the Inflation Reduction Act will significantly cut emissions, leading to a roughly 40% reduction in U.S. emissions by 2030 if states fully maximize and leverage these investments. However, we’ll need to address the remaining emissions gap from President Biden’s 2030 goal of a 50-52% reduction.
Arjun Krishnaswami pointed out how new funding and offices in DOE intend to address that near-term gap, such as the new Office of Manufacturing and Energy Supply Chains, which aims to address challenges that might limit the effectiveness of new deployment funding in industry.
And of course, we have to think about what we need beyond 2030. “As important and impressive all of the authorities we got [from these new laws] are, it’s not the end of the story. We have to make it all the way to 2050 and hit global decarbonization,” Arjun said.
The White House net-zero game-changers report, released a few weeks ago, helps to create a vision for achieving net-zero emissions by no later than 2050 while driving benefits like equity and good-paying jobs. The report highlights five key areas for R&D: efficient building heating and cooling; net-zero aviation; industrial processes and feedstocks; net-zero electric grid and electrification; and fusion energy at scale. And importantly, it represents a major effort to coordinate across a number of federal agencies that have a hand in climate innovation and maximize their existing resources.
2. In the near-term, there’s opportunity for bipartisan support for innovation.
The flip to Republican leadership in the House means that key committees responsible for appropriating climate funding will likely also change leadership. While it’s unclear what effect that may have, innovation has emerged as an important area for bipartisan support, like we saw with the bipartisan IIJA. Historic funding for R&D and demonstration in new climate technologies like carbon removal, hydrogen and long-duration energy storage made it across the finish line in that law.
Tanya Das said she sees two potential paths ahead. We could see flat funding from fiscal year 2023, or we could see selected growth in programs that weren’t funded under IIJA and IRA. For example, the set of innovation and science programs that were authorized under the CHIPs and Science Act but not yet appropriated.
“The omnibus budget that is hopefully passed by the end of this year will be a big indication of what levels we could see… It will be the first since the IRA, so that’s going to be a really big signal to us about what to expect next year,” said Tanya.
3. Visualization tools can be powerful advocacy drivers and have a real impact.
All panelists agreed that when it comes to navigating federal funding that can support our near-term and long-term climate goals, tools that help uncover gaps and opportunities can be extremely valuable.
Tanya recounted how a striking chart Arjun created in a report a few years ago influenced her work on an industrial emissions R&D bill in the House on the Science, Space & Technology Committee in 2019. The chart displayed a huge disparity between DOE funding and actual emissions in the industrial sector.
“…That chart was so influential for helping us make the case about why we needed an industrial emissions R&D program…which led to a bill that was passed in the Energy Act and was then funded by IIJA and IRA.”
Given just how complex the federal budget is, the more tools the merrier! Hoyu Chong discussed how ITIF’s tracker tool digs deep into DOE’s research and development programs, provides a historical look at past R&D funding and offers policy recommendations from ITIF – features that complement EDF’s tool.
As she explained, “Instead of looking at the broad spectrum of the pipeline that the EDF tracker does, we’re more focused on early stages of the pre-commercialization of technologies…”
Arjun also underscored the value of these tools, by overviewing how experts within agencies often plan in terms of “budget control points” rather than in specific sectors or technologies. Therefore, being able to translate between these budget control points and more accessible categories like sectors, innovation stages or technologies is helpful for agency staff to understand how their particular agency’s dollars fit into the overall picture.
4. We need more tools and analysis that unpack the impact of federal climate innovation funding.
Beyond looking at what is currently well-funded and what is not, Dr. Nicholas Montoni highlighted how investigating the “timescale of investment and the timescale of impact” could be valuable for addressing budget gaps.
For example, could we show how an investment in R&D in a particular year led to a technology’s deployment 10-15 years later? And how could that information help us better advocate for more federal investment?
They also pointed out how it could be helpful to explore the “trends of trends,” referring to how climate innovation funding may change in response to current events. “Will we be able to look back and see how the picture of climate innovation funding responded to world events like the Russia invasion in Ukraine, gas shortages, hurricanes and winter storms that knocked out the power sector…?”
In terms of next steps for the Climate Innovation Funding Tracker, panelists agreed that including new funding from the three recent federal climate laws would be very useful. Future add-ons could also include an emissions inventory, as well as comparisons with budget requests from the President, Senate and House.
These are all welcome suggestions we are excited to explore in future versions of the Tracker. As the panel discussion underscored, we’re entering a new era of the climate fight with significant resources ready to drive decarbonization — but our work is far from over. New tools and insights on federal funding can help policymakers, advocates and business leaders gain a clearer view of the path ahead and unlock the next generation of solutions.
As we build on this first iteration of the Tracker, let us know if you have any comments or suggestions on different aspects that you’d like to see in the future by reaching out to InnovationTracker@edf.org.
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