The period around 2003 was the golden spring of green technology. John McCain and Joe Lieberman introduced a bipartisan bill to curb global warming. I got my first ride in a Prius from a conservative foreign policy hawk who said that these new technologies were going to help us end our dependence on Middle Eastern despots. You’d go to Silicon Valley and all the venture capitalists, it seemed, were rushing into clean tech.
From that date on the story begins to get a little sadder.

Al Gore released his movie “An Inconvenient Truth” in 2006. The global warming issue became associated with the highly partisan former vice president. Gore mobilized liberals, but, once he became the global warming spokesman, no Republican could stand shoulder to shoulder with him and survive. Any slim chance of building a bipartisan national consensus was gone.

Then, in 2008, Barack Obama seized upon green technology and decided to make it the centerpiece of his jobs program. During his presidential campaign he promised to create five million green tech jobs. Renewable energy has many virtues, but it is not a jobs program. Obama’s stimulus package set aside $90 billion for renewable energy loans and grants, but the number of actual jobs created has been small. Articles began to appear in the press of green technology grants that were costing $2 million per job created. The program began to look like a wasteful disappointment.

Federal subsidies also created a network of green tech corporations hoping to benefit from taxpayer dollars. One of the players in this network was, again, Al Gore. As Carol Leonnig reported in The Washington Post last week, Gore left public office in 2001 worth less than $2 million. Today his wealth is estimated to be around $100 million.

Leonnig reports that 14 green tech firms that Gore invested in received or directly benefited from more than $2.5 billion in federal loans, grants and tax breaks. Suddenly, green tech looks less like a gleaming beacon of virtue and more like corporate welfare, further enriching already affluent investors.

The federal agencies invested in many winners, but they also invested in some spectacular losers, from Solyndra to the battery maker A123 Systems, which just filed for bankruptcy protection. Private investors can shake off bad investments. But when a political entity like the federal government makes a bad investment, the nasty publicity tarnishes the whole program.
The U.S. government wasn’t the only one investing in renewables. Governments around the world were also doing it, and the result has been gigantic oversupply, a green tech bubble. Keith Bradsher of The Times reported earlier this month that China’s biggest solar panel makers are suffering losses of up to $1 for every $3 in sales. Panel prices have fallen by three-fourths since 2008. Manufacturers will need huge subsidies far into the future — as Bradsher writes, “a looming financial disaster.” The U.S. share of the global market, meanwhile, has fallen from 7 percent to 3 percent since 2008.

The biggest blow to green tech has come from the marketplace itself. Fossil fuel technology has advanced more quickly than renewables technology. People used to worry that the world would soon run out of oil, but few worry about that now. Shale gas, meanwhile, has become the current hot, revolutionary fuel of the future.

Writing in Foreign Policy magazine, Daniel Yergin projects that in 2030 the worldwide fuel mix will not be too different than what it is today. That is, there will be more solar and wind power generated, but these sources will still account for a small fraction of total supply. Fossil fuels will still be the default fuel for decades ahead.

The Financial Post in Canada recently surveyed the gloom across the clean energy sector. “Revenues from renewable and alternative energy fell a little more than 12%” in 2011, the paper reported. Research and development spending on renewables is set to decline next year, according to United Nations figures, while the oil and gas sector is investing a whopping $490 billion a year in exploration.

All in all, the once bright green future is looking grimmer. Green tech is decidedly less glamorous, tarnished by political and technological disappointments.

The shifting mood was certainly evident in the presidential debate this week. Global warming was off the radar. Meanwhile, President Obama and Mitt Romney competed to see who could most ardently support coal and new pipelines. Obama is running radio ads in Ohio touting his record as a coal champion.

This is not where we thought we’d be back in 2003.

Global warming is still real. Green technology is still important. Personally, I’d support a carbon tax to give it a boost. But he who lives by the subsidy dies by the subsidy. Government planners should not be betting on what technologies will develop fastest. They should certainly not be betting on individual companies.

This is a story of overreach, misjudgments and disappointment.