Geoscience Reference
In-Depth Information
same logic would apply to investments in solar, wind, geothermal, and
nuclear power.
This leads to an essential conclusion: A high price of carbon is neces-
sary to induce profi t-oriented business to undertake research, develop-
ment, and investments in new low-carbon technologies.
The country may have the best climate scientists developing the
best projections of climate change; it might have the best materials sci-
entists working on high-effi ciency CO
2
pipelines; it may have the best
fi nancial wizards developing new fi nancial derivatives to fund all these
investments. But if the carbon price is zero, then projects to develop
promising low-carbon technologies like CCS will not get to the board-
room of a profi t-oriented company.
CROSSING THE VALLEY OF DEATH
The U.S. economy has superb fundamental science and engineering
in its universities and research labs. American fi rms are highly attuned
to the marketplace and produce thousands of new and improved prod-
ucts every year. But in between the ivory tower and the jungle of the
marketplace, the terrain dips into what Stanford economist John Wey-
bright ideas from the laboratory do not survive the transition to the
marketplace because they are starved of funds (see Figure 40).
This problem has been thoughtfully analyzed by a leading scholar
in this area, F. M. Scherer:
Somewhere between the extremes of basic research and specifi c
new product or process development lie investments in technologi-
cal advances that have not matured enough to permit commercial
embodiment, but that blaze the trail for concrete developments.
Investments in such “precompetitive generic enabling” technolo-
gies are believed to be susceptible to private-sector market failures
nearly as severe as those affl icting basic research. The investment
outlays required to bring a technology forward to the point of com-
mercial applicability may be substantial, but once decisive advances
