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How Will G.O.P.'s House Budget Affect Clean Tech?

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Taking House Republicans at face value on their pledge to cut 20% of all non-defense discretionary spending, we took a quick look at what cuts might mean for America's ability to compete in the $2 trillion clean energy market. While there are certainly areas of the nation's energy budget that should get cut or eliminated, to achieve $100 billion in savings every program -- even those that help fuel the economic growth the new majority says it wants -- is going to suffer.

Thanks to smart government investments, many clean energy businesses are getting off the ground or expanding in the U.S. This means new jobs created by Dow at a battery plant in Michigan, by Nissan for electric vehicles in Tennessee or Southern Company to build a new nuclear reactor in Georgia.

So what might a 20% chop look like?

-- A $1.6 billion cut in the federal loan guarantee program would potentially cripple the much-needed nuclear renaissance at a time when China is planning a five-fold expansion over the next decade. Without loan guarantees, it's unlikely we'd be building first nuclear power plant in the US in almost 30 years, and creating as many as 3,500 jobs, in Georgia today.

-- $60 million less for ARPA-E's already meager $300 million budget, gutting funding for advanced energy storage, next generation nuclear power and micro-battery technology that could also be used by the US military.

-- Eliminating almost $500 million in grants to companies innovating in renewable energy, advanced vehicle technology, and battery storage. This could kill emerging clean energy businesses that have the potential to become the 21st century's Google, General Electric or Exxon.

-- Slicing $20 million from R&D investments to schools like Purdue University, Penn State, University of Wisconsin, and Iowa State University, which are developing the next generation of innovators and ideas that could spawn new businesses and jobs across the U.S.

Even conservative columnist George Will is ringing alarm bells. On January 5, warned House freshmen, "Making the government lean by cutting the most defensible -- because most productive -- federal spending is akin to making an overweight aircraft flight-worthy by removing an engine."

Cutting the U.S.'s already meager innovation budget would be troubling enough in a vacuum. But clean energy is already a crowded global marketplace. Our economic competitors in China, the UK, South Korea and Japan are all increasing clean tech funding to fuel their growth -- often while making tough decisions in other areas to slash their own budget deficits.

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