Brooking Institution fellow Mark Muro debates whether the Waxman-Markey Cap & Trade bill will spark innovation:

Waxman and Markey deserve credit given the circumstances for reserving some 16 percent of the cap-and-trade revenue for clean-energy development and deployment. Also welcome is the bill's allocation of 1 percent of cap-and-trade permit revenue for the establishment of eight "Clean Energy Innovation Centers"regional R&D hubs reminiscent of Brookings' proposals for the creation of a network of energy discovery-innovation institutes (e-DIIs) that can leverage the expertise of universities, national laboratories, industry, venture capital, and others in the transfer of innovative technologies to the marketplace. (The Department of Energy's FY2010 budget makes a similar proposal, as well.)
Yet on balance the innovation investments in the bill remain far too small. According to an analysis by the Breakthrough Institute, the bill would direct just $9 billion annually to technology innovation, assuming an average carbon price of $15 per ton. And it would reserve just $735 million per year for the energy R&D centers. That may sound like a lot compared to the nation's current, anemic efforts, but it pales beside the $20 to $30 billion per year on R&D called for by Brookings (or the $15 billion annually called for by Barack Obama). And it's doubly disappointing given that the cap-and-trade system represents the best potential source for funding game-changing innovation in the face of tight budgets for the foreseeable future.