Pulling New Technologies Into the Market

In the next congressional session, Republicans will hold slim majorities in both the House and Senate. As they seek to advance their legislative priorities, energy policies will be high on the list. Energy innovation—particularly so-called technology-push policies that incentivize research and development—has long enjoyed bipartisan support, with lawmakers eager to bring federal funding and resources to their states and districts.

But David M. Hart encourages policymakers to consider supporting demand-pull policies, which “use direct spending, tax incentives, regulatory authority, and other tools to pull innovations into practice by encouraging users to adopt early versions of them, hastening the development of productive feedback loops.” Such demand-pull policies complement the supply of new—and often expensive—energy technologies by reducing risk and making them more cost competitive.

Demand-pull policies have their critics, and Hart notes that such policies must be crafted to encourage competition and drive cost reductions and performance improvements. Whether to advance nuclear, hydrogen, fossil fuels, or other energy innovations, demand-pull policies can be integral to a higher-performing, cleaner, more affordable, and more secure US energy system.

Read more about how to use demand-pull policies to drive energy innovation.