Federal R&D spending on energy efficiency and fossil energy technologies looks like a pretty good investment, according to a new report by a committee of the National Research Council (NRC).

"Energy Research at DOE" found that some $22 billion was invested between 1978 and 2000 by the Department of Energy in these two areas--$7.3 billion in energy efficiency R&D and $15 billion in fossil fuels.

The NRC committee then assessed a $13 billion sample of these R&D programs--$1.6 billion invested in 17 efficiency programs and $11 billion in 22 fossil fuel programs--and found a $40 billion economic return.

Investments in energy efficiency technologies led the way. Indeed, over the 22-year period, a comparatively paltry $11 million investment in three energy efficiency technologies produced nearly three-quarters of total returns, or $30 billion.

These three investments were in advances for refrigerator and freezer compressors, electronic ballasts for energy-efficient fluorescent lighting, and heat-resistant and low-heat-emitting window glass.

The report's discovery that a few "home runs" were responsible for most investment returns underscores the importance of a diversified investment portfolio, in the authors' view. The report adds that adoption of these new products was ensured since national standards guaranteed their use.

When that is not the case and technologies are introduced with no incentives for use, the report notes, federal investments have had little economic return. Pointing to investments in fuel-cell technologies, the report criticizes DOE for funding a variety of disparate programs without clear goals and not partnering with industry to make products marketable.

Federal R&D energy investments also contributed to large environmental gains, the report says, estimating that more than $60 billion was avoided in damage and mitigation costs because of investments in cleaner burning coal technologies and nitrogen oxides control techniques. For more information, go to http://www.nas.edu.

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