How much is energy R&D worth

The value of energy technology R&D as an insurance investment to reduce the cost of climate change stabilization, oil price shocks, urban air pollution, and energy disruptions is estimated to be $5-8 billion/year in sum total. However, the total that is justified is actually less than this sum because some R&D is applicable to more than one risk. Nevertheless, the total DOE investment in energy technology R&D (about $1.3 billion/year in FY97) seems easily justified by its insurance value alone; and, in fact, more might be warranted, particularly in the areas related to climate change and urban air pollution. This conclusion appears robust even if the private sector is assumed to be investing a comparable amount. Not counted is the value to the economy and to US competitiveness of better energy technologies that may result from the R&D, only the insurance value for reducing the cost of these four risks to society was estimated.