Bush cleantech fund "window dressing"

Last year, new biofuel initiatives were a main pillar in the State of The Union speech by U.S. President George Bush (see the Cleantech Group's Bush beckons for biofuel).

Yet this year, despite record investment and a mounting sense of urgency internationally for clean technology initiatives, they received comparatively little mention in Bush's speech—and cleantech industry observers gave the President poor marks for what he did offer.

Bush called for more clean coal, "renewable power," "emissions-free nuclear power," advanced batteries and renewable fuels. In the only specific initiative, however, he proposed a new international cleantech fund to combat climate change.

"Let us create a new international clean technology fund, which will help developing nations like India and China make greater use of clean energy sources. And let us complete an international agreement that has the potential to slow, stop, and eventually reverse the growth of greenhouse gases. This agreement will be effective only if it includes commitments by every major economy and gives none a free ride," said Bush.

While specifics didn't make the speech, a White House communications brief characterized the fund as $2 billion over three years, accompanying some $18 billion the Bush government has already committed over its seven year term to the research, development and promotion of clean and efficient technologies.

Industry observers were skeptical the fund would be meaningful.

Not mincing words, Gilbert Metcalf, a professor in the department of economics at Tufts University who specializes in federal energy policy, told the Cleantech Group, "for him to call for this is just silly."

"This is window dressing. There's no way the other countries are going to get involved, given the Bush government's position on Kyoto and the post-Kyoto framework."

Bush has rejected Kyoto, saying it unfairly exempts developing countries from cutting their emissions. His administration favors voluntary measures and "aspirational goals" to limit climate change.

"What the President is saying is that the United States should not move forward on joining an international climate agreement unless China and India do also. I think we're going to be at an impasse if we continue with this approach," said Metcalf.

"I think it would be essential take the initiative to begin carbon pricing. We absolutely have to take the first step here."

Metcalf has written on the importance of federal tax credits for the expansion of wind, biomass and solar-generated electricity in the U.S.

Investor Neal Dikeman of Jane Capital also told the Cleantech Group the President missed the opportunity to be more proactive.

"It's nice to see a little bit more money thrown at it, but where's the climate change legislation?" he asked.

"The international technology fund is an excellent idea, and I agree that we want long term to see all nations participate in greenhouse gas commitments, but international partnership is critical."

"I'd like to see the U.S. explicitly backing the success of the Kyoto Protocol mechanisms. Even though we all acknowledge they are not perfect yet, participation in and support of international reduction mechanisms is important."

Industry observers widely agree that a price on carbon is fundamentally needed for the U.S. to meaningfully curb greenhouse gas emissions, but the speech gave no hints that the current administration would prioritize this in this, its last year.

Bush's $2 billion over three year allocation compares to a $10 billion clean technology unilateral commitment by Japan earlier today at the World Economic Forum in Davos, Switzerland (see Japan to set up $10B climate change fund) and a separate $15 billion commitment by the Abu Dhabi emirate last week (see the Cleantech Group's Abu Dhabi, the next cleantech hub?).

"We should really be taking the lead here. We didn't hear that in this speech," said Tufts University's Metcalf.