Environmental Engineering Reference
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than a few years of patience. h ey can also take hundreds of millions, if
not billions, of dollars just to get of the ground. Most venture capital-
ists prefer to take their risks on more bite-sized chunks.
When the free market looks as though it isn't delivering on needed
innovation, economists ot en suggest governments should intervene. By
subsidizing innovative activity, governments can, in principle, help cor-
rect the problem. h is was the theory behind support for companies
like MiaSolé: it, and pret y much any similar company, would require
lots of capital and patience to scale up, and it might still fall victim to
competitors that could learn from its gains. Policymakers concluded
that, as a result, private investors might be unwilling to step up. h at,
the U.S. government decided, was a good-enough reason to back the
i r m .
h e theory is solid, but the real challenge is what happens when
it is put into practice. h ere are doubtless many occasions in which
more innovation would be benei cial. But it is far from clear that gov-
ernments are much good at identifying them. Government analysts
evaluating projects for potential support don't face the same i nancial
incentives to get things right that private sector i nanciers do. Worse,
this all can quickly be compounded by politics. h at doesn't require
anything nefarious, like the debunked claims of crony capitalism sur-
rounding Solyndra; it simply requires governments and their agencies
to seek their own survival, as they are wont to do. Regular failures of
government-backed companies make for awful politics, so in the long
run big-ticket risk-taking government programs are rare. Instead, those
programs ot en end up supporting less-than-innovative activities; alter-
natively, they sometimes just die.
And there's a i nal problem with government ef orts to drive innova-
tion so extensively that renewable energy beats fossil fuels: even if they
work the way they ought to in theory, it's far from clear that they will
actually succeed in their ultimate goals.
h e i rst reason is that innovations that drive down the cost of new
energy sources may well lower the costs of traditional ones too. Many
of the biggest advances in clean energy, for example, have been due to
the availability of cheap computers. h is allowed developers to opti-
mize wind turbine design and precisely aim solar panels to maximize
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