A multibillionaire computer geek is an unlikely revolutionary, but Microsoft founder Bill Gates has suggested nothing short of a radical inversion of the nation’s economy. A guest on the ABC News program “This Week” recently, he spoke about a report released by the American Energy Innovation Council, a group of business leaders that includes Mr. Gates. The report calls for the federal government to invest $16 billion each year in clean energy innovation.
The BP oil spill, gas prices that topped $4 per gallon two summers ago and two U.S. wars in energy-rich countries should provide the requisite urgency for solving the problem Mr. Gates and his group identify. If not, there is the U.S. economy itself.
“As business leaders, we feel that America’s current energy system is deficient in ways that cause serious harm to our economy, our national security and our environment,” the report states. “To correct these deficiencies, we must make a serious commitment to modernizing our energy system with cleaner, more efficient technologies. Such a commitment should include both robust, public investments in innovative energy technologies as well as policy reforms to deploy these technologies on a large scale. By tapping America’s entrepreneurial spirit and long-standing leadership in technology innovation, we can set a course for a prosperous, sustainable economy and take control of our energy future.”
With between $800 billion and $1 trillion leaving the U.S. each year for foreign energy sources, the effects of keeping that money circulating through the domestic economy would be like an annual stimulus package without the debt.
The current federal energy research budget is less than $5 billion. As a comparison, the council notes that the U.S. spends $30 billion each year on health research and $80 billion on military research and development. Mr. Gates told the New York Times that government must direct large sums of money at energy solutions, accept that many will fail to come to fruition, and then work to develop those that have promise.
Mr. Gates acknowledged on the ABC News program that new spending would be a tough sell: “Well, there is obviously a tight budget … The question is, ‘Can the energy sector finance its own revolution and create these great R&D jobs here in America?’” He believes that waiting for industry to muster the resources is a gamble the country can ill-afford to take.
Though the mood of the day is cutting government spending, the federal government is the only entity that can jump-start a new economic sector. Fiscal conservatism should not result in across the board cuts; rather, it must analyze where cuts make sense and where more investment will reap re-turns. Mr. Gates makes the case that government investment in retooling our energy portfolio is conservatism at its best.
The fossil-fuel economy will remain for decades to come, but the sooner the U.S. can rely more on new energy solutions the brighter its future will be. Mr. Gates, with no ulterior or political motive, should be heeded.