Eric Strid
Aug 25, 2017 · 2 min read

The resulting solutions will require “long time-horizon investment: investments with no immediate payoff in terms of saleable products, no visible ROI (return on investment), no profit-making in the near-term. Such investment can be generated only in a non-market environment, in which payment is collective and financial profit is not the point.”

Having founded and grown a high-tech company, I can assure you economists that R&D is indeed part of a “non-market environment” and is alive and well in the technology sector (although pre-competitive federal clean-tech R&D is now being robustly trashed by the Koch Machine). The management of R&D spending is more an art than a science, in that it’s all about creating something that has never been done before; thus it is highly risky and economically volatile.

I think economists should pay more attention to the cost-performance trajectories of clean tech. These can be reliably extrapolated at least 5 years into the future due to manufacturing experience curves (no technology breakthroughs assumed)— the more widgets we build, the more we learn how to make them cheaper and better (as opposed to extractive industries that just extract the cheapest resources first). Clean-tech companies know all this and are focusing on continuous improvements in cost-performance. Wind and solar generation, battery storage, and electric vehicles all continue to get cheaper, with physical limits years away and no economic limits on how cheap we could manufacture them. Clean-tech adoptions will continue their exponential growth and create tipping points in which the energy transition looks like the adoption of smart phones.

Heads up: your gas guzzlers may start to look like all those PCs and monitors you’ve junked well before the end of their useful life.

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