No plan to substantially reduce greenhouse gas emissions can succeed through increases in energy efficiency alone. Because economic growth continues to boost the demand for energy-- more coal for powering new factories, more oil for fueling new cars, more natural gas for heating new homes--carbon emissions will keep climbing despite the introduction of more energy-efficient vehicles, buildings and appliances. To counter the alarming trend of global warming, the U.S. and other countries must make a major commitment to developing renewable energy sources that generate little or no carbon.

Renewable energy technologies were suddenly and briefly fashionable three decades ago in response to the oil embargoes of the 1970s, but the interest and support were not sustained. In recent years, however, dramatic improvements in the performance and affordability of solar cells, wind turbines and biofuels--ethanol and other fuels derived from plants--have paved the way for mass commercialization. In addition to their environmental benefits, renewable sources promise to enhance America's energy security by reducing the country's reliance on fossil fuels from other nations. What is more, high and wildly fluctuating prices for oil and natural gas have made renewable alternatives more appealing.

We are now in an era where the opportunities for renewable energy are unprecedented, making this the ideal time to advance clean power for decades to come. But the endeavor will require a long-term investment of scientific, economic and political resources. Policymakers and ordinary citizens must demand action and challenge one another to hasten the transition.

Let the Sun Shine

SOLAR CELLS, also known as photovoltaics, use semiconductor materials to convert sunlight into electric current. They now provide just a tiny slice of the world's electricity: their global generating capacity of 5,000 megawatts (MW) is only 0.15 percent of the total generating capacity from all sources. Yet sunlight could potentially supply 5,000 times as much energy as the world currently consumes. And thanks to technology improvements, cost declines and favorable policies in many states and nations, the annual production of photovoltaics has increased by more than 25 percent a year for the past decade and by a remarkable 45 percent in 2005. The cells manufactured last year added 1,727 MW to worldwide generating capacity, with 833 MW made in Japan, 353 MW in Germany and 153 MW in the U.S.

Solar cells can now be made from a range of materials, from the traditional multicrystalline silicon wafers that still dominate the market to thin-film silicon cells and devices composed of plastic or organic semiconductors. Thin-film photovoltaics are cheaper to produce than crystalline silicon cells but are also less efficient at turning light into power. In laboratory tests, crystalline cells have achieved efficiencies of 30 percent or more; current commercial cells of this type range from 15 to 20 percent. Both laboratory and commercial efficiencies for all kinds of solar cells have risen steadily in recent years, indicating that an expansion of research efforts would further enhance the performance of solar cells on the market.

Solar photovoltaics are particularly easy to use because they can be installed in so many places--on the roofs or walls of homes and office buildings, in vast arrays in the desert, even sewn into clothing to power portable electronic devices. The state of California has joined Japan and Germany in leading a global push for solar installations; the Million Solar Roof commitment is intended to create 3,000 MW of new generating capacity in the state by 2018. Studies done by my research group, the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley, show that annual production of solar photovoltaics in the U.S. alone could grow to 10,000 MW in just 20 years if current trends continue.

Blowing in the Wind

WIND POWER has been growing at a pace rivaling that of the solar industry. The worldwide generating capacity of wind turbines has increased more than 25 percent a year, on average, for the past decade, reaching nearly 60,000 MW in 2005. The growth has been nothing short of explosive in Europe-- between 1994 and 2005, the installed wind power capacity in European Union nations jumped from 1,700 to 40,000 MW. Germany alone has more than 18,000 MW of capacity thanks to an aggressive construction program. The northern German state of Schleswig-Holstein currently meets one quarter of its annual electricity demand with more than 2,400 wind turbines, and in certain months wind power provides more than half the state's electricity. In addition, Spain has 10,000 MW of wind capacity, Denmark has 3,000 MW, and Great Britain, the Netherlands, Italy and Portugal each have more than 1,000 MW.

In the U.S. the wind power industry has accelerated dramatically in the past five years, with total generating capacity leaping 36 percent to 9,100 MW in 2005. Although wind turbines now produce only 0.5 percent of the nation's electricity, the potential for expansion is enormous, especially in the windy Great Plains states. (North Dakota, for example, has greater wind energy resources than Germany, but only 98 MW of generating capacity is installed there.) If the U.S. constructed enough wind farms to fully tap these resources, the turbines could generate as much as 11 trillion kilowatt-hours of electricity, or nearly three times the total amount produced from all energy sources in the nation last year. The wind industry has developed increasingly large and efficient turbines, each capable of yielding 4 to 6 MW. And in many locations, wind power is the cheapest form of new electricity, with costs ranging from four to seven cents per kilowatt-hour.

The growth of new wind farms in the U.S. has been spurred by a production tax credit that provides a modest subsidy equivalent to 1.9 cents per kilowatt-hour, enabling wind turbines to compete with coal-fired plants. Unfortunately, Congress has repeatedly threatened to eliminate the tax credit. Instead of instituting a long-term subsidy for wind power, the lawmakers have extended the tax credit on a year-to-year basis, and the continual uncertainty has slowed investment in wind farms. Congress is also threatening to derail a proposed 130-turbine farm off the coast of Massachusetts that would provide 468 MW of generating capacity, enough to power most of Cape Cod, Martha's Vineyard and Nantucket.

The reservations about wind power come partly from utility companies that are reluctant to embrace the new technology and partly from so-called NIMBY-ism. (NIMBY is an acronym for Not in My Backyard.) Although local concerns over how wind turbines will affect landscape views may have some merit, they must be balanced against the social costs of the alternatives. Because society's energy needs are growing relentlessly, rejecting wind farms often means requiring the construction or expansion of fossil fuel-burning power plants that will have far more devastating environmental effects.

Green Fuels

RESEARCHERS ARE ALSO pressing ahead with the development of biofuels that could replace at least a portion of the oil currently consumed by motor vehicles. The most common biofuel by far in the U.S. is ethanol, which is typically made from corn and blended with gasoline. The manufacturers of ethanol benefit from a substantial tax credit: with the help of the 2-billion annual subsidy, they sold more than 16 billion liters of ethanol in 2005 (almost 3 percent of all automobile fuel by volume), and production is expected to rise 50 percent by 2007. Some policymakers have questioned the wisdom of the subsidy, pointing to studies showing that it takes more energy to harvest the corn and refine the ethanol than the fuel can deliver to combustion engines. In a recent analysis, though, my colleagues and I discovered that some of these studies did not properly account for the energy content of the by-products manufactured along with the ethanol. When all the inputs and outputs were correctly factored in, we found that ethanol has a positive net energy of almost five megajoules per liter.

We also found, however, that ethanol's impact on greenhouse gas emissions is more ambiguous. Our best estimates indicate that substituting cornbased ethanol for gasoline reduces greenhouse gas emissions by 18 percent, but the analysis is hampered by large uncertainties regarding certain agricultural practices, particularly the environmental costs of fertilizers. If we use different assumptions about these practices, the results of switching to ethanol range from a 36 percent drop in emissions to a 29 percent increase. Although corn-based ethanol may help the U.S. reduce its reliance on foreign oil, it will probably not do much to slow global warming unless the production of the biofuel becomes cleaner.

But the calculations change substantially when the ethanol is made from cellulosic sources: woody plants such as switchgrass or poplar. Whereas most makers of corn-based ethanol burn fossil fuels to provide the heat for fermentation, the producers of cellulosic ethanol burn lignin--an unfermentable part of the organic material--to heat the plant sugars. Burning lignin does not add any greenhouse gases to the atmosphere, because the emissions are offset by the carbon dioxide absorbed during the growth of the plants used to make the ethanol. As a result, substituting cellulosic ethanol for gasoline can slash greenhouse gas emissions by 90 percent or more.

Another promising biofuel is socalled green diesel. Researchers have produced this fuel by first gasifying biomass-- heating organic materials enough that they release hydrogen and carbon monoxide--and then converting these compounds into long-chain hydrocarbons using the Fischer-Tropsch process. (During World War II, German engineers employed these chemical reactions to make synthetic motor fuels out of coal.) The result would be an economically competitive liquid fuel for motor vehicles that would add virtually no greenhouse gases to the atmosphere. Oil giant Royal Dutch/Shell is currently investigating the technology.

The Need for R&D

EACH OF THESE renewable sources is now at or near a tipping point, the crucial stage when investment and innovation, as well as market access, could enable these attractive but generally marginal providers to become major contributors to regional and global energy supplies. At the same time, aggressive policies designed to open markets for renewables are taking hold at city, state and federal levels around the world. Governments have adopted these policies for a wide variety of reasons: to promote market diversity or energy security, to bolster industries and jobs, and to protect the environment on both the local and global scales. In the U.S. more than 20 states have adopted standards setting a minimum for the fraction of electricity that must be supplied with renewable sources. Germany plans to generate 20 percent of its electricity from renewables by 2020, and Sweden intends to give up fossil fuels entirely.

Even President George W. Bush said, in his now famous State of the Union address this past January, that the U.S. is addicted to oil. And although Bush did not make the link to global warming, nearly all scientists agree that humanity's addiction to fossil fuels is disrupting the earth's climate. The time for action is now, and at last the tools exist to alter energy production and consumption in ways that simultaneously benefit the economy and the environment. Over the past 25 years, however, the public and private funding of research and development in the energy sector has withered. Between 1980 and 2005 the fraction of all U.S. R&D spending devoted to energy declined from 10 to 2 percent. Annual public R&D funding for energy sank from 8 billion to 3 billion (in 2002 dollars); private R&D plummeted from 4 billion to 1 billion [see box on next page].

To put these declines in perspective, consider that in the early 1980s energy companies were investing more in R&D than were drug companies, whereas today investment by energy firms is an order of magnitude lower. Total private R&D funding for the entire energy sector is less than that of a single large biotech company. (Amgen, for example, had R&D expenses of 2.3 billion in 2005.) And as R&D spending dwindles, so does innovation. For instance, as R&D funding for photovoltaics and wind power has slipped over the past quarter of a century, the number of successful patent applications in these fields has fallen accordingly. The lack of attention to long-term research and planning has significantly weakened our nation's ability to respond to the challenges of climate change and disruptions in energy supplies.

Calls for major new commitments to energy R&D have become common. A 1997 study by the President's Committee of Advisors on Science and Technology and a 2004 report by the bipartisan National Commission on Energy Policy both recommended that the federal government double its R&D spending on energy. But would such an expansion be enough? Probably not. Based on assessments of the cost to stabilize the amount of carbon dioxide in the atmosphere and other studies that estimate the success of energy R&D programs and the resulting savings from the technologies that would emerge, my research group has calculated that public funding of 15 billion to 30 billion a year would be required--a fivefold to 10-fold increase over current levels.

Greg F. Nemet, a doctoral student in my laboratory, and I found that an increase of this magnitude would be roughly comparable to those that occurred during previous federal R&D initiatives such as the Manhattan Project and the Apollo program, each of which produced demonstrable economic benefits in addition to meeting its objectives. American energy companies could also boost their R&D spending by a factor of 10, and it would still be below the average for U.S. industry overall. Although government funding is essential to supporting early-stage technologies, private-sector R&D is the key to winnowing the best ideas and reducing the barriers to commercialization.

Raising R&D spending, though, is not the only way to make clean energy a national priority. Educators at all grade levels, from kindergarten to college, can stimulate public interest and activism by teaching how energy use and production affect the social and natural environment. Nonprofit organizations can establish a series of contests that would reward the first company or private group to achieve a challenging and worthwhile energy goal, such as constructing a building or appliance that can generate its own power or developing a commercial vehicle that can go 200 miles on a single gallon of fuel. The contests could be modeled after the Ashoka awards for pioneers in public policy and the Ansari X Prize for the developers of space vehicles. Scientists and entrepreneurs should also focus on finding clean, affordable ways to meet the energy needs of people in the developing world. My colleagues and I, for instance, recently detailed the environmental benefits of improving cooking stoves in Africa.

But perhaps the most important step toward creating a sustainable energy economy is to institute market-based schemes to make the prices of carbon fuels reflect their social cost. The use of coal, oil and natural gas imposes a huge collective toll on society, in the form of health care expenditures for ailments caused by air pollution, military spending to secure oil supplies, environmental damage from mining operations, and the potentially devastating economic impacts of global warming. A fee on carbon emissions would provide a simple, logical and transparent method to reward renewable, clean energy sources over those that harm the economy and the environment. The tax revenues could pay for some of the social costs of carbon emissions, and a portion could be designated to compensate low-income families who spend a larger share of their income on energy. Furthermore, the carbon fee could be combined with a cap-and-trade program that would set limits on carbon emissions but also allow the cleanest energy suppliers to sell permits to their dirtier competitors. The federal government has used such programs with great success to curb other pollutants, and several northeastern states are already experimenting with greenhouse gas emissions trading.

Best of all, these steps would give energy companies an enormous financial incentive to advance the development and commercialization of renewable energy sources. In essence, the U.S. has the opportunity to foster an entirely new industry. The threat of climate change can be a rallying cry for a clean-technology revolution that would strengthen the country's manufacturing base, create thousands of jobs and alleviate our international trade deficits--instead of importing foreign oil, we can export high-efficiency vehicles, appliances, wind turbines and photovoltaics. This transformation can turn the nation's energy sector into something that was once deemed impossible: a vibrant, environmentally sustainable engine of growth.


DANIEL M. KAMMEN is Class of 1935 Distinguished Professor of Energy at the University of California, Berkeley, where he holds appointments in the Energy and Resources Group, the Goldman School of Public Policy and the department of nuclear engineering. He is founding director of the Renewable and Appropriate Energy Laboratory and co-director of the Berkeley Institute of the Environment.