Fellow blogger Dexter Johnson has commented, in connection with the recent Konarka bankruptcy, on the perils of "market push" politics in green tech and on assertions Konarka might be billed as "Romney's Solyndra." The fact of the matter is, the $1.5 million the state of Massachusetts pumped into Konarka during Romney's governorship was but a tiny fraction of what credulous investors would bet on the company during the years that followed. "Driven by the promise of cheap, printed solar modules that can be made colorful and transparent, technically unsavvy investors rushed to invest in Massachusetts organic photovoltaic developer Konarka to the tune of $170 million, with an additional $30 million coming from grant funding," as Lux Research put it.
Initially, to be sure, Konarka's technology appeared very promising. The company had a prestigious Nobelist in its corner, and the claims it made for its material's light-to-energy conversion efficiency were independently verified. But then doubts emerged about whether the company was going to meet cost targets and ramp up production as fast as it needed to. Lux rated Konarka a "strong caution" for three years running, while technology journalists including those at Eart2Tech also expressed skepticism about Konarka's prospects.
So one lesson from the bankruptcy, surely, is that the private sector can be just as bad at picking technology winners as the public sector. That does not play well with Candidate Romney's theme about government, but it does not make Konarka Romney's Solyndra.
The bigger lesson from bankruptcies like Solyndra and Konarka is that the best way to encourage growth of such companies is not to pick specific ones but rather to tilt the playing field to favor any company that develops desirable technology. That can be done either by means of a feed-in tariff of the kind Germany and Denmark pioneered, which guarantees a market for electricity generated from renewable resources, at specified rates for each major category over time, or by taxing energy or carbon. The feed-in tariff creates a stable, predictable market for innovators and entrepreneurs, in that they know what target they have to meet to make a technology profitable at any given time. So if you're developing a new photovoltatic material, for example, and you know with confidence what it will cost to make it three years from now, you know for sure whether you stand to make a profit or not.
Almost as effective a means of tilting the playing field is a fossil energy tax or a cap-and-trade system that raises costs of carbon-emitting energy technology while favoring all low-carbon or zero-carbon technologies equally. Best of all, perhaps, would be the measures in a combination--a cap-and-trade system in which proceeds from sale of emissions credits would be used to subsidize clean energy tech according to a schedule of feed-in tariffs.
If the Obama administration is open to criticism in clean tech policy, it's for not having promoted a feed-in tariff system and for not having pushed a cap-and-trade bill through Congress. But that is not a criticism Romney or Republicans will make. Instead Democrats and Republicans will trade shots about who is the worse investor, the public or private sectors, all the while neglecting the much better approach, which is to engineer a market that equally favors anybody developing innovative green technology.