Last October, the Department of Energy's Advanced Research Projects Agency–Energy (ARPA-E) announced $151 million in funding for 37 bold energy projects. The agency was created to seed high-risk, high-reward technology companies that aim to transform how America is powered. With a total budget of $400 million, ARPA-E's stated mission is to fund projects that will reduce America's dependence on foreign energy imports, limit energy-related greenhouse gas emissions, improve energy efficiency, and make the United States a global competitor in the development of advanced energy technologies.
Can this new agency help close the gap between the United States and nations like China, Japan, and Korea currently dominating the emerging green-tech industry? ARPA-E's $400 million budget is loose change compared to the massive investments—$217 billion—that China plans to make in green technologies over the next five years. Even the $80 billion pledged to green projects as part of Obama's economic stimulus falls short, so the question remains whether the United States can really compete in a battle of green investments.
Rising Tigers, Sleeping Giant, a much-discussed report released by the Breakthrough Institute last November, found that China, Japan, and South Korea have all surpassed the United States in the production of virtually all types of clean-energy technologies. It is expected that over the next five years the governments of these nations will out-invest the United States three to one in the clean-tech sector.
What the United States lacks in total dollars invested, it will try to make up for in innovation. While it is expected that many of the 37 projects funded by ARPA-E will fail, the hope is that at least a few—or even one—will turn out to be game changers. Among the projects receiving the most funding are a new hybrid thermal-mechanical drill technology from Foro Energy intended to improve access to U.S. geothermal energy stores (grant: $9,151,300); FloDesign's Mixer Ejector Wind Turbine, a high-efficiency shrouded wind turbine (grant: $8,325,400); EaglePicher and Pacific Northwest National Laboratory's high-energy, low-cost planar liquid sodium beta batteries for grid-scale electrical power storage (grant: $7,200,000); and DuPont and Bio Architecture Lab's biobutanol biofuel from seaweed (grant: $9,000,000).
The upshot of the Rising Tigers, Sleeping Giant report is that ultimately the public investment gap between the United States and Asia will cause private investors eager to fund promising green technologies to turn to Asia, not the United States. The report predicted that the United States, unless there is a focused and substantial increase in public investment, will likely have to import most of its green technologies in the coming years.