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    Is There Hope for Greentech?

    Written by

    Alec Liu

    Contributor

    Amidst the ruins of the country’s latest love affair with renewable energy, ARPA-E is all that remains, an oasis of deep scientific research that could lead to game-changing technologies, ones that might wean us off our addiction to petroleum, create tons of jobs, and maybe even save planet Earth (if it isn’t already too late). At least, that’s the hope.

    Green tech, for better or worse, has always seemingly offered the promise of salvation. That’s perhaps too weighty a promise, one that could very well be behind the movement’s failure to launch. In part, we’ve never fully accepted the need for failure in developing new tech, mainly because we live in a political climate and culture where success must be guaranteed.

    Take the Solyndra example. The stars were fucking aligned. Soaring energy prices, a doomed economy, and a really pissed off Mother Nature meant there was unprecedented public support for greentech (well, except since the last time), matched in enthusiasm with cash money and policy support. The culmination was essentially a government funded energy V.C. fund, a guaranteed loan program worth $25 billion. Who better to lead the whole thing and decide where the money goes but Nobel Prize-winning rockstar rocket scientist Steven Chu?

    We all know what happened next. The program’s first high-profile showpiece Solyndra went down in flames, ending in tears, bankruptcy, and for Chu, a very public humiliation. But failure was always inevitable; indeed, it should have been the whole point. After all, it’s an industry where over 90 percent of startups will probably fail, according to Bill Gates. Yet those in power, so imbued in their notion of guaranteed success, were so caught off guard by Chu’s misstep, they put him on the hot seat to answer to what were basically charges of conspiracy. It “was not the high point of what I wanted to do with my time,” Chu admitted to the New Republic. Chu was, expectedly, found to be clean, but the backlash was still swift and fierce.

    If the Solyndra investigation didn’t produce a scalp, however, it did make one thing clear: The federal government’s foray into venture capitalism was over. The loan guarantee program expired in September, at the height of the Solyndra controversy; virtually nobody I talked to in Washington or Silicon Valley believed it would be revived. Brookings Institution scholar Mark Muro, an authority on renewable energy policy, points to an array of programs due to sunset in the next year that are unlikely to be renewed, some launched through the stimulus and others dating back to the Bush-era Republican Congress. They include not just the loan guarantees but also Treasury Department grants, IRS-administered bonds for clean energy projects, and tax credits for energy efficient appliances and new homes.

    Some of the high-tech research programs, particularly Chu’s own ARPA-E, will probably survive. But absent unlikely congressional action, Muro estimates that as much as 70 percent of the current federal funding for clean energy could vanish by 2014. “I think we are going to exit the clean-tech finance business as a nation,” he says.

    No one could have predicted Solyndra’s titanic collapse. If we are then to take Gates’s numbers at face value, this is a bubble that pops 90 percent of the time. Which seems maddening, but the program was actually smarter than that with a built-in need for risk.

    There was also the fact that Congress had appropriated a $2.4 billion risk reserve for the program, explicitly authorizing the Energy Department to lose nearly five times what Solyndra had lost. And even Republicans who had voted against the program’s 2009 expansion had clamored for more federal funds to support wind farms, solar arrays, and nuclear plants in their own districts. If anything, Chu’s department should have been faulted for its caution: A Bloomberg Government report released in December found that 87 percent of the $16 billion worth of projects underwritten by the program were of minimal risk, not the transformative loans the department was supposed to be making.

    So it wasn’t necessarily Solyndra’s need to fail that dashed our hopes of a government sponsored green revolution but rather our own need for Solyndra to succeed and when it didn’t, we just couldn’t deal (which should probably make us wonder about that tech bubble down the street).

    ARPA-E is still a beacon of hope, for now, but only if we can learn to properly learn to manage what we can really expect in such greentechier pastures. Representatives there will be quick to remind us of how DARPA created the internet under similar conditions, between showing off the latest research in seaweed photosynthesis, but for Gates, it’s a dangerous comparison to make.

    “The IT revolution is the exception that has warped people’s minds in how quickly things work,” Gates warned, speaking at the ARPA-E Energy Innovation Summit this past February. “It’s very different than having a software company—or even a chip factory, where your innovation cycles are two or three years, and your dependence on government policy is very low.”

    So I hope you weren’t looking for a quick fix. Remember, despite all of our technological innovations, energy continues to be something we struggle with. Fundamentally, we haven’t strayed very far from burning stuff, we’ve simply been able to be more efficient at getting it, and finding more of it to burn (natural gas FTW?).

    Would it be heretic to consider that maybe, just maybe technology won’t save us after all? At least not in the way that we want it to.

    Lead photo: Charles Dharapak / AP

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    Topics: greentech, energy, climate change, nature, business-and-politics

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