General Electric Co.’s Jeffrey Immelt and Microsoft Corp.’s Bill Gates called today for the U.S. government to more than triple its spending on clean energy research and development to $16 billion a year.
Xerox Corp. Chief Executive Officer Ursula Burns and venture capitalist John Doerr, also members of a group called the American Energy Innovation Council, said their proposals have a chance because of the public attention focused on the BP Plc oil-spill in the Gulf of Mexico.
“The incident in the Gulf just intensified this discussion,” Burns said at a briefing in Washington today. “We have a fragile, brittle system today, and that system cannot be sustained as we go forward in a cost-effective way.”
Representatives of the group planned to meet today with President Barack Obama and lawmakers. Doerr and Immelt are members of the President’s Economic Recovery Advisory Board, a panel created to recommend steps to boost the economy. Burns is a member of a panel that advises Obama on trade.
Energy investments are necessary for more than environmental reasons, according to a report released by the council. Gates said expanded research is necessary to reduce the U.S. dependence on foreign oil. Immelt, chief executive of GE, said it’s needed if the U.S. is to match efforts of foreign competitors.
“If the supply chain is going to be dominated by Japan and China, something is wrong,” Immelt said. “If you have people talking about nuclear power, and you are in a country that isn’t building any new nuclear power plants, something is wrong.”
The Energy Department’s research and development budget has fallen to $4.8 billion this year, from more than $7 billion in the late 1970s, according to the report. Gates said the U.S. must start investing now if it wants to meet the goal of reducing energy emissions by 80 percent by 2050. The clean energy that results would also be more stable in price, he said.
Money should be spent on cutting carbon emissions from coal, nuclear fission research and energy efficient buildings, according to the 33-page report. The executives also proposed doubling research on nuclear fission to $1 billion and almost tripling funding for carbon capture and clean-coal devices to $1.3 billion.
They said the government should create a new agency to help deploy new techniques and spend $2 billion on that.
Policy makers should copy the example of GE, Immelt said. GE will increase its own investments in clean energy, and the government must do so if the U.S. is to keep up with countries such as Brazil and China, Immelt said.
GE’s power-generation equipment produces about one-third of the world’s electricity. The company’s Atlanta-based energy unit makes equipment in wind, gas, biogas, steam, solar, clean-coal and nuclear industries.
The council didn’t come up with proposals for how to pay for the new funding, and whether to impose an increase in cost on carbon emissions. Obama has pushed for a cap-and-trade system, which the administration says would boost private investments in alternative energy. The approach, which passed the House before stalling in the Senate, would limit carbon emissions and create a market for the trading of pollution allowances.
Doerr, a partner at Kleiner Perkins Caufield & Byers, said private investment spurred by such an approach could dwarf any government spending.
“Some combination” of renewable-energy requirements on businesses, a cap-and-trade system and technology standards will be necessary to create a market for clean-energy products, according to the group’s. Executives declined to endorse specific legislation. Senate Majority Leader Harry Reid, a Nevada Democrat, has said the Senate will take up energy legislation this month and that he hasn’t decided whether the measure will include a cap on carbon.
Reducing fossil-fuel subsidies, creating an oil import fee or increasing the gasoline tax could all be used to pay for the new investments, the group said. The report didn’t recommend a specific funding proposal partly to get the report together quickly, Charles “Chad” Holliday, chairman of Bank of America, said in an interview.
“We have a very fragile energy system today, and only through innovation can you eliminate that fragility,” Gates, chairman of software company Microsoft, said.