Carbon Capture in the Industrial Sector: Addressing Training, Startups, and Risk

This memo is part of the Day One Project Early Career Science Policy Accelerator, a joint initiative between the Federation of American Scientists & the National Science Policy Network.

Summary

Decarbonizing our energy system is a major priority for slowing and eventually reversing climate change. Federal policies supporting industrial-scale solutions for carbon capture, utilization, and sequestration (CCUS) have significantly decreased costs for large-scale technologies, yet these costs are still high enough to create considerable investment risks. Multiple companies and laboratories have developed smaller-scale, modular technologies to decrease the risk and cost of point-source carbon capture and storage (CCS). Additional federal support is needed to help these flexible, broadly implementable technologies meet the scope of necessary decarbonization in the highly complex industrial sector. Accordingly, the Department of Energy (DOE) should launch an innovation initiative comprising the following three pillars:

  1. Launch a vocational CCS training program to grow the pool of workers equipped with the skills to install, operate, and maintain CCS infrastructure.
  2. Develop an accelerator to develop and commercialize modular CCS for the industrial sector.
  3. Create a private-facing CCS Innovation Connector (CIC) to increase stability and investment. 

These activities will target underfunded areas and complement existing DOE policies for CCS technologies.

Challenge and Opportunity

Carbon dioxide (CO2) is the largest driver of human-induced climate change. Tackling the climate crisis requires the United States to significantly decarbonize; however, CCS and CCUS are still too costly. CCUS costs must drop to $100 per ton of CO2 captured to incentivize industry uptake. U.S. policymakers have paved the way for CCUS by funding breakthrough research, increasing demand for captured CO2through market-shaping, improving technologies for point-source CCS, and building large-scale plants for direct-air capture (DAC). DAC has great promise for remediating CO2 in the atmosphere despite its higher cost (up to $600/ton of CO2 sequestered), so the Biden Administration and DOE have recently focused on DAC via policies such as the Carbon Negative Shot (CNS) and the 2021 Infrastructure Investment and Jobs Act (IIJA). By comparison, point-source CCS has been described as an “orphan technology” due to a recent lack of innovation.

Part of the problem is that few long-term mechanisms exist to make CCS economical. Industrial CO2 demand is rising, but without a set carbon price, emissions standard, or national carbon market, the cost of carbon capture technology outweighs demand. The Biden Administration is increasing demand for captured carbon through government purchasing and market-shaping, but this process is slow and does not address the root problems of high technology and infrastructure costs. Therefore, targeting the issue from the innovation side holds the most promise for improving industry uptake. DOE grants for technology research and demonstration are common, while public opinion and the 45Q tax credit have led to increased funding for CCS from companies like ExxonMobil. These efforts have allowed large-scale projects like the $1 billion Petra Nova plant to be developed; however, concerns about carbon capture pipelines, the high-cost, high-risk technology, and years needed for permitting mean that large-scale projects are few and far between. Right now, there are only 26 operating CCUS plants globally. Therefore, a solution is to pursue smaller-scale technologies to fill this gap and provide lower-cost and smaller-scale — but much more widespread — CCS installations. 

Modular CCS technologies, like those created by the startups Carbon Clean and Carbon Capture, have shown promise for industrial plants. Carbon Clean has serviced 44 facilities that have collectively captured over 1.4 million metric tons of carbon. Mitsubishi is also trialing smaller CCS plants based on successful larger facilities like Orca or Petra Nova. Increasing federal support for modular innovation with lower risks and installation costs could attract additional entrants to the CCS market. Most research focuses on breakthrough innovation to significantly decrease carbon capture costs. However, there are many existing CCS technologies — like amine-based solvents or porous membranes — that can be improved and specialized to cut costs as well. In particular, modular CCS systems could effectively target the U.S. industrial sector, given that industrial subsectors such as steel or plastics manufacturing receive less pressure and have fewer decarbonization options than oil and gas enterprises. The industrial sector accounts for 30% of U.S. greenhouse gas emissions through a variety of small point sources, which makes it a prime area for smaller-scale CCS technologies.

Plan of Action

DOE should launch an initiative designed to dramatically advance technological options for and use of small-scale, modular CCS in the United States. The program would comprise three major pillars, detailed in Table 1.

Table 1.
Three complementary efforts to increase industrial uptake of CCS technologies.
PillarPurposeChampionCostFundingTime Frame
Vocational TrainingIncrease CCS workforceDOE OCED$5 millionIIJA2-4 years
Modular CSS Innovation ProgramDevelop modular CCS technology for industry subsectorsDOE OCED or FECM$10 millionIIJA, DOE grants1 year
CCS Innovator ConnectorEncourage private CCS investmentDOE OCED$750,000/yearIIJA2 years

DOE should leverage IIJA and the new DOE Office of Clean Energy Demonstration (OCED) to create a vocational CCS training program. DOE has in the past supported — and is currently supporting — a suite of regional carbon capture training. However, DOE’s 2012 program was geared toward scientists and workers already in the CCS field, and its 2022 program is specialized for 20–30 specific scientists and projects. DOE should build on this work with a new vocational CCS training program that will:

This educational program would be cost-effective: the online course would require little upkeep, and the vocational training programs could be largely developed with financial and technical support from external partners. Initial funding of $5 million would cover course development and organization of the vocational training programs.

Pillar 2. Create an accelerator for the development and commercialization of modular CCS technologies.

The DOE Office of Fossil Energy and Carbon Management (FECM) or OCED should continue to lead global innovation by creating the Modular CCS Innovation Program (MCIP). This accelerator would provide financial and technical support for U.S. research and development (R&D) startups working on smaller-scale, flexible CCS for industrial plants (e.g., bulk chemical, cement, and steel manufacturing plants). The MCIP should prioritize technology that can be implemented widely with lower costs for installation and upkeep. For example, MCIP projects could focus on improving the resistance of amine-based systems to specialty chemicals, or on developing a modular system like Carbon Clean that can be adopted by different industrial plants. Projects like these have been proposed by different U.S. companies and laboratories, yet to date they have received comparatively less support from government loans or tax credits. 

Figure 1. 

Proposed timeline of the MCIP accelerator for U.S. startups.

As illustrated in Figure 1, the MCIP would be launched with a Request for Proposals (RFP), awarding an initial $1 million each to the top 10 proposals received. In the first 100 days after receiving funding, each participating startup would be required to submit a finalized design and market analysis for its proposed product. The startup would then have an additional 200 days to produce a working prototype of the product. Then, the startup would move into the implementation and commercialization stages, with the goal to have its product market-ready within the next year. Launching the MCIP could therefore be achieved with approximately $10 million in grant funding plus additional funding to cover administrative costs and overhead — amounts commensurate with recent DOE funding for large-scale CCUS projects. This funding could come from the $96 million recently allocated by DOE to advance carbon capture technology and/or from funding allocated in the IIJA allocation. Implementation funding could be secured in part or in whole from private investors or other external industry partners.

Pillar 3. Create a private-facing CCS Innovation Connector (CIC) to increase stability and investment. 

The uncertainty and risk that discourages private investment in CCS must be addressed. Many oil and gas companies such as ExxonMobil have called for a more predictable policy landscape and increased funding for CCS projects. Creating a framework for a CCS Innovation Connector (CIC) within the DOE OCED based on a similar fund in the European Union would decrease the perceived risks of CCS technologies emerging from MCIP. The CIC would work as follows: first, a company would submit a proposal relating to point-source carbon capture. DOE technical experts would perform an initial quality-check screening and share proposals that pass to relevant corporate investors. Once funding from investors is secured, the project would begin. CIC staff (likely two to three full-time employees) would monitor projects to ensure they are meeting sponsor goals and offer technical assistance as necessary. The CIC would serve as a liaison between CCS project developers and industrial sponsors or investors to increase investment in and implementation of nascent CCS technologies. While stability in the CCS sector will require policies such as increasing carbon tax credits or creating a global carbon price, the CIC will help advance such policies by funding important American CCS projects. 

Conclusion

CO2 emissions will continue to rise as U.S. energy demand grows. Many existing federal policies target these emissions through clean energy or DAC projects, but more can and should be done to incentivize U.S. innovation in point-source CCS. In particular, increased federal support is needed for small-scale and modular carbon capture technologies that target complex areas of U.S. industry and avoid the high costs and risks of large-scale infrastructure installations. This federal support should involve improving CCS education and training, accelerating the development and commercialization of modular CCS technologies for the industrial sector, and connecting startup CCS projects to private funding. Biden Administration policies — coupled with growing public and industrial support for climate action — make this the ideal time to expand the reach of our climate strategy into an “all of the above” solution that includes CCS as a core component.

An Earthshot for Clean Steel and Aluminum

Summary

The scale of mobilization and technological advancement required to avoid the worst effects of climate change has recently led U.S. politicians to invoke the need for a new, 21st century “moonshot.” The Obama Administration launched the SunShot Initiative to dramatically reduce the cost of solar energy and, more recently, the Department of Energy (DOE) announced a series of “Earthshots” to drive down the cost of emerging climate solutions, such as long-duration energy storage.

While DOE’s Earthshots to date have been technology-specific and sector-agnostic, certain heavy industrial processes, such as steel and concrete, are so emissions- intensive and fundamental to modern economies as to demand an Earthshot unto themselves. These products are ubiquitous in modern life, and will be subject to increasing demand as we seek to deploy the clean energy infrastructure necessary to meet climate goals. In other words, there is no reasonable pathway to preserving a livable planet without developing clean steel and concrete production at mass scale. Yet the sociotechnical pathways to green industry – including the mix of technological solutions to replace high-temperature heat and process emissions, approaches to address local air pollutants, and economic development strategies – remain complex and untested. We urgently need to orient our climate innovation programs to the task.

Therefore, this memo proposes that DOE launch a Steel Shot to drive zero-emissions iron, steel, and aluminum production to cost-parity with traditional production within a decade. In other words, zero dollar difference for zero-emissions steel in ten years, or Zero for Zero in Ten.

Challenge and Opportunity

As part of the Biden-Harris Administration’s historic effort to quadruple federal funding for clean energy innovation, DOE has launched a series of “Earthshots” to dramatically slash the cost of emerging technologies and galvanize entrepreneurs and industry to hone in on ambitious but achievable goals. DOE has announced Earthshots for carbon dioxide removal, long-duration storage, and clean hydrogen. New programs authorized by the Infrastructure Investment and Jobs Act, such as hydrogen demonstration hubs, provide tools to help DOE to meet the ambitious cost and performance targets set in the Earthshots. The Earthshot technologies have promising applications for achieving net-zero emissions economy-wide, including in sectors that are challenging to decarbonize through clean electricity alone.

One such sector is heavy industry, a notoriously challenging and emissions-intensive sector that, despite contributing to nearly one-third of U.S. emissions, has received relatively little focus from federal policymakers. Within the industrial sector, production of iron and steel, concrete, and chemicals are the biggest sources of CO2 emissions, producing climate pollution not only from their heavy energy demands, but also from their inherent processes (e.g., clinker production for cement). 

Meanwhile, global demand for cleaner versions of these products – the basic building blocks of modern society – is on the rise. The International Energy Agency (IEA) estimates that CO2 emissions from iron and steel production alone will need to fall from 2.4 Gt to 0.2 Gt over the next three decades to meet a net-zero emissions target economy-wide, even as overall steel consumption increases to meet our needs for clean energy buildout. Accordingly, by 2050, global investment in clean energy and sustainable infrastructure materials will grow to $5 trillion per year. The United States is well-positioned to seize these economic opportunities, particularly in the metals industry, given its long history of metals production, skilled workforce, the initiation of talks to reach a carbon emissions-based steel and aluminum trade agreement, and strong labor and political coalitions in favor of restoring U.S. manufacturing leadership.

“The metals industry is foundational to economic prosperity, energy infrastructure, and national security. It has a presence in all 50 states and directly employs more than a half million people. The metals industry also contributes 10% of national climate emissions.”

Department of Energy request for information on a new Clean Energy Manufacturing Institute, 2021

However, the exact solutions that will be deployed to decarbonize heavy industry remain to be seen. According to the aforementioned IEA Net-Zero Energy (NZE) scenario, steel decarbonization could require a mix of carbon capture, hydrogen-based, and other innovative approaches, as well as material efficiency gains. It is likely that electrification – and in the case of steel, increased global use of electric arc furnaces – will also play a significant role. While technology research funding should be increased, traditional “technology-push” efforts alone are unlikely to spur rapid and widespread adoption of a diverse array of solutions, particularly at low-margin, capital-intensive manufacturing facilities. This points to the potential for creative technology-neutral policies, such as clean procurement programs, which create early markets for low-emissions production practices without prescribing a particular technological pathway.

Therefore, as a complement to its Earthshots that “push” promising clean energy technologies down the cost curve, DOE should also consider adopting technology-neutral Earthshots for the industrial sector, even if some of the same solutions may be found in other Earthshots (e.g., hydrogen). It is important for DOE to be very disciplined in identifying one or two essential sectors, where the opportunity is large and strategic, to avoid creating overly balkanized sectoral strategies. In particular, DOE should start with the launch of a Steel Shot to buy down the cost of zero-emissions iron, steel, and aluminum production to parity with traditional production within a decade, while increasing overall production in the sector. In other words, zero dollar difference for zero-emissions steel in ten years, or Zero for Zero in Ten.

The Steel Shot can bring together applied research and demonstration programs, public-private partnerships, prizes, and government procurement, galvanizing public energy around a target that enables a wide variety of approaches to compete. These efforts will be synergistic with technology-specific Earthshots seeking dramatic cost declines on a similar timeline.

Plan of Action

Develop and launch a metals-focused Earthshot: 

Invest in domestic clean steelmaking capacity:

Create demand for “green steel” through market pull mechanisms:

Frequently Asked Questions
Is a sector-focused Energy Earthshot really necessary?

The lower technology prices targeted by the Hydrogen Earthshot and the Carbon Negative Shot are necessary but not sufficient to guarantee that these technologies are deployed in the highest emissions producing sectors, such as steel, cement, and chemicals. The right combination of approaches to achieve price reduction remains uncertain and can vary by plant, location, process, product, as noted in a recent McKinsey study on decarbonization challenges across the industrial sector. Additionally, there is a high upfront cost to deploying novel solutions, and private financers are reluctant to take a risk on untested technologies. Nonetheless, to avoid creating overly balkanized sectoral strategies, it will be important for DOE to be very disciplined in identifying one or two essential sectors, such as metals, where the opportunity is large and strategic.

Why are metals the best opportunity for a sector-focused Earthshot?

These products are ubiquitous and increasingly crucial for deploying the clean energy infrastructure necessary to reach net-zero. The United States of America has a long history of metals production, a skilled workforce, and strong labor and political coalitions in favor of restoring U.S. manufacturing leadership. Additionally, carbon-intensive steel from China has become a growing concern for U.S. manufacturers and policymakers; China produces 56% of global crude steel, followed by India (6%), Japan (5%), and then the U.S. (4%). The U.S. already maintains a strong competitive advantage in clean steel, and the technologies needed to double-down and fully decarbonize steel are close to commercialization, but still require government support to achieve cost parity.

Will this Earthshot reduce U.S. metals manufacturing competitiveness?

U.S. steel production is already less polluting than many foreign sources, but that typically comes with additional costs. Reducing the “green premium” will help to keep US metal producers competitive, while preparing them for the needs of buyers, who are increasingly seeking out green steel products. End users such as Volkswagen are aiming for zero emissions across their entire value chain by 2050, while Mercedes-Benz and Volvo have already begun sourcing low-emissions steel for new autos. Meanwhile,  the EU is preparing to implement a carbon border adjustment mechanism that could result in higher prices for steel and aluminum-produced products from the United States. The ramifications of the carbon border tax are already being seen in steel agreements, such as the recent US-EU announcement to drop punitive tariffs on each other’s steel and aluminum exports and to begin talks on a carbon-based trade agreement.

What is the right baseline to use for calculating the “green premium” of metals?

Breakthrough Energy estimated that the “green premium” for steel using carbon capture is approximately 16% – 29% higher than “normally” produced steel. Because there are a variety of processes that could be used to reduce emissions, and thus contribute to the “green premium,” there may not be a single number that can be estimated for the current costs. However, wherever possible, we advocate for using real-world data of “green” produced steel to estimate how close DOE is to achieving its benchmark targets in comparison to “traditional” steel.

Leveraging Department of Energy Authorities and Assets to Strengthen the U.S. Clean Energy Manufacturing Base

Summary

The Biden-Harris Administration has made revitalization of U.S. manufacturing a key pillar of its economic and climate strategies. On the campaign trail, President Biden pledged to do away with “invent it here, make it there,” alluding to the long-standing trend of outsourcing manufacturing capacity for critical technologies — ranging from semiconductors to solar panels —that emerged from U.S. government labs and funding. As China and other countries make major bets on the clean energy industries of the future, it has become clear that climate action and U.S. manufacturing competitiveness are deeply intertwined and require a coordinated strategy.

Additional legislative action, such as proposals in the Build Back Better Act that passed the House in 2021, will be necessary to fully execute a comprehensive manufacturing agenda that includes clean energy and industrial products, like low-carbon cement and steel. However, the Department of Energy (DOE) can leverage existing authorities and assets to make substantial progress today to strengthen the clean energy manufacturing base. 

This memo recommends two sets of DOE actions to secure domestic manufacturing of clean technologies:

  1. Foundational steps to successfully implement the new Determination of Exceptional Circumstances (DEC) issued in 2021 under the Bayh-Dole Act to promote domestic manufacturing of clean energy technologies.
  2. Complementary U.S.-based manufacturing investments to maximize the DEC’s impact and to maximize the overall domestic benefits of DOE’s clean energy innovation programs.

Challenge and Opportunity

Recent years have been marked by growing societal inequality, a pandemic, and climate change-driven extreme weather. These factors have exposed the weaknesses of essential supply chains and our nation’s legacy energy system. 

Meanwhile, once a reliable source of supply chain security and economic mobility, U.S. manufacturing is at a crossroads. Since the early 2000s, U.S. manufacturing productivity has stagnated and five million jobs have been lost. While countries like Germany and South Korea have been doubling down on industrial innovation — in ways that have yielded a strong manufacturing job recovery since the Great Recession — the United States has only recently begun to recognize domestic manufacturing as a crucial part of a holistic innovation ecosystem. Our nation’s longstanding, myopic focus on basic technological research and development (R&D) has contributed to the American share of global manufacturing declining by 10 percentage points, and left U.S. manufacturers unprepared to scale up new innovations and compete in critical sectors long-term.

The Biden-Harris administration has sought to reverse these trends with a new industrial strategy for the 21st century, one that includes a focus on the industries that will enable us to tackle our most pressing global challenge and opportunity: climate change. This strategy recognizes that the United States has yet to foster a robust manufacturing base for many of the key products —ranging from solar modules to lithium-ion batteries to low-carbon steel — that will dominate a clean energy economy, despite having funded a large share of the early and applied research into underlying technologies. The strategy also recognizes that as clean energy technologies become increasingly foreign-produced, risks increase for U.S. climate action, national security, and our ability to capture the economic benefits of the clean energy transition. 

The U.S. Department of Energy (DOE) has a central role to play in executing the administration’s strategy. The Obama administration dramatically ramped up funding for DOE’s Advanced Manufacturing Office (AMO) and launched the Manufacturing USA network, which now includes seven DOE-sponsored institutes that focus on cross-cutting research priorities in collaboration with manufacturers. In 2021, DOE issued a Determination of Exceptional Circumstances (DEC) under the Bayh-Dole Act of 19801 to ensure that federally funded technologies reach the market and deliver benefits to American taxpayers through substantial domestic manufacturing. The DEC cites global competition and supply chain security issues around clean energy manufacturing as justification for raising manufacturing requirements from typical Bayh-Dole “U.S. Preference” rules to stronger “U.S. Competitiveness” rules across DOE’s entire science and energy portfolio (i.e., programs overseen by the Under Secretary for Science and Innovation (S4)). This change requires DOE-funded subject inventions to be substantially manufactured in the United States for all global use and sales (not just U.S. sales) and expands applicability of the manufacturing requirement to the patent recipient as well as to all assignees and licensees. Notably, the DEC does allow recipients or licensees to apply for waivers or modifications if they can demonstrate that it is too challenging to develop a U.S. supply chain for a particular product or technology.

The DEC is designed to maximize return on investment for taxpayer-funded innovation: the same goal that drives all technology transfer and commercialization efforts. However, to successfully strengthen U.S. manufacturing, create quality jobs, and promote global competitiveness and national security, DOE will need to pilot new evaluation processes and data reporting frameworks to better assess downstream impacts of the 2021 DEC and similar policies, and to ensure they are implemented in a manner that strengthens manufacturing without slowing technology transfer. It is essential that DOE develop an evidence base to assess a common critique of the DEC: that it reduces appetite for companies and investors to engage in funding agreements. Continuous evaluation can enable DOE to understand how well-founded these concerns are.

Yet, the new DEC rules and requirements alone cannot overcome the structural barriers to domestic commercialization that clean energy companies face today. DOE will also need to systematically build domestic manufacturing efforts into basic and applied R&D, demonstration projects, and cross-cutting initiatives. DOE should also pursue complementary investments to ensure that licensees of federally funded clean energy technologies are able and eager to manufacture in the United States. Under existing authorities, such efforts can include: 

These complementary efforts will enable DOE to generate more productive outcomes from its 2021 DEC, reduce the need for waivers, and strengthen the U.S. clean manufacturing base. In other words, rather than just slow the flow of innovation overseas without presenting an alternative, they provide a domestic outlet for that flow. Figure 1 provides an illustration of the federal ecosystem of programs, DOE and otherwise, that complement the mission of the DEC.

Figure 1

Programs are arranged in rough accordance to their role in the innovation cycle. TRL and MRL refer to technology and manufacturing readiness level, respectively. Proposed programs, highlighted with a dotted yellow border, are either found in the Build Back Better Act passed by the House in 2021 or the Bipartisan Innovation Bill (USICA/America COMPETES)

Figure 1Programs are arranged in rough accordance to their role in the innovation cycle. TRL and MRL refer to technology and manufacturing readiness level, respectively. Proposed programs, highlighted with a dotted yellow border, are either found in the Build Back Better Act passed by the House in 2021 or the Bipartisan Innovation Bill (USICA/America COMPETES).

Plan of Action

While further Congressional action will be necessary to fully execute a long-term national clean manufacturing strategy and ramp up domestic capacity in critical sectors, DOE can meaningfully advance such a strategy now through both long-standing authorities and recently authorized programs. The following plan of action consists of (1) foundational steps to successfully implement the DEC, and (2) complementary efforts to ensure that licensees of federally funded clean energy technologies are able and eager to manufacture in the United States. In tandem, these recommendations can maximize impact and benefits of the DEC for American companies, workers, and citizens.

Part 1: DEC Implementation

The following action items, many of which are already underway, are focused on basic DEC implementation.

Part 2: Complementary Investments

Investments to support the domestic manufacturing sector and regional innovation infrastructure must be pursued in tandem with the DEC to translate into enhanced clean manufacturing competitiveness. The following actions are intended to reduce the need for waivers, shore up supply chains, and expand opportunities for domestic manufacturing:

Updating the State Energy Program to Promote Regional Manufacturing and Economic Revitalization

Summary

Congress, the White House, and federal agencies are growing increasingly concerned about the decline in U.S. industrial leadership. The emergence of China’s industrial dominance and the supply chain challenges exacerbated by the Covid pandemic have opened a political window of opportunity. With the Infrastructure Investment and Jobs Act, as well as pending U.S. competitiveness legislation, Congress and the White House are poised to direct significant investments to regions that have suffered from the decline of legacy industries, ranging from the Rust Belt to coal communities. Innovative energy technologies are at the center of this effort. Not only will clean energy supply chains be necessary for the U.S. to rise to the climate challenge, but they have emerged as the main battleground in global industrial competitiveness, as major economies around the world make significant investments in renewables, electric vehicles, and emerging technologies like clean hydrogen. 

There are a range of interventions underway across federal agencies to strengthen U.S. manufacturing and promote regional economic and workforce development. The Department of Energy (DOE) is a key player in fostering innovative manufacturing ecosystems around clean energy technologies and low-carbon industries. 

For nearly half a century, DOE’s State Energy Program (SEP) has supported state leaders as they plan for a clean energy future. However, a resilient, secure, and prosperous clean energy economy increasingly demands investments in advanced energy manufacturing and supply chains. This memo proposes that the Administration update SEP to the State Energy and Manufacturing Program (SEMP), and outlines a specific set of reforms — many of which fall within existing program authorities — that will empower states and regions to foster a strong clean energy manufacturing base and enhance U.S industrial leadership.

Challenge and Opportunity

This Administration and Congress have identified regional innovation as a critical area to advance U.S. competitiveness and economic revitalization. This regional approach is woven throughout the bipartisan Infrastructure Investment and Jobs Act (IIJA), which includes regional hubs for clean hydrogen and other emerging technologies; the U.S. Innovation and Competition Act (and its House companion, the America COMPETES Act), which includes funding for regional innovation clusters; the Build Back Better Regional Challenge funded under the American Rescue Plan, which devotes $1 billion to revitalizing regions suffering from disinvestment; the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization; and the White House’s supply chain and industrial decarbonization efforts.

These investments also recognize that global growth sectors align with decarbonization. Despite U.S. leadership in R&D for solar photovoltaics, electric vehicles, advanced nuclear reactors, and more, the U.S. has failed to retain significant domestic manufacturing capacity for the energy technologies of the future, posing risks to middle-class jobs, energy security, and climate action in the years ahead. 

Today, China owns 80 percent of the solar supply chain, produces roughly half the globe’s electric vehicles, and leads the world in clean energy investments, spending more than double that of the U.S. While major announcements from U.S. automakers in the past year have brought hope of American electric vehicle leadership, other clean energy industries are struggling in the absence of U.S. manufacturing incentives. 

DOE’s recent supply chain report highlights the need to “leverage regional assets, including resources and workforce development, to support the creation and expansion of industrial clusters” and identifies a range of avenues to provide regional technical assistance. It also states that DOE should “consider whether new authority is needed to enable federal awards, matching grants, direct loan, and loan guarantees to support creation of these clean energy manufacturing clusters and leverage existing public programs (federal, state, local) for regional innovation and manufacturing ecosystems.”

One existing program which could be leveraged in this effort is the State Energy Program (SEP). SEP was authorized by the Energy Policy and Conservation Act of 1975, passed in response to the energy crises of the 1970s. The program has historically provided cost-shared technical assistance to states to aid in energy conservation planning, as well as some limited financial assistance (i.e., revolving loan funds) for states to increase energy efficiency and clean energy in public operations, such as municipal buildings and schools. The program has five goals:

SEP is considered highly effective, with a leverage ratio of 1:11 between federal and non-federal (including private) funds, annual energy cost savings of $7 for every $1 spent, and hundreds of thousands of students educated in energy efficiency.

Congress and DOE have proposed expansions to the scope, scale, and targeting of SEP in the past (see FAQ #2). These increases in funding and prioritization for low-income and environmental justice communities are well-warranted given the SEP’s strong track record and high return-on-investment, but so too should the scope of funds be updated to reflect our modern supply chain challenges. Energy supply chains and clean U.S. manufacturing have become bipartisan priorities and critical elements of meeting U.S. climate goals.

In the absence of additional support for regional clean energy supply chains, it is highly likely that the U.S. will continue to cede ground to foreign competitors in the energy technologies of the future and grow increasingly reliant on materials manufactured abroad. This poses risks to our ability to mitigate climate change, ensure energy security and national security, and capture the economic benefits of the clean energy revolution. It also is likely to inhibit energy innovation, as regional manufacturing clusters promote “learning-by-doing” and drive advances in material sciences and processes that are simply not possible to achieve in the lab. Finally, maintaining a narrow focus on energy conservation could limit the ability for all states to plan effectively for the clean energy future and develop comparative advantages; even after accounting for population, states do not participate evenly in all aspects of the program based on their needs, interests, and capabilities (see ORNL program evaluation, Figures 3-32). An expanded mandate could increase uptake of the program among states that may have a strong manufacturing base but have been unable to maximize the benefits of a program with a more narrow scope.

Therefore, DOE should leverage its existing authority to rename the program to the State Energy and Manufacturing Program (SEMP) and expand technical and financial assistance to include clean energy supply chain planning. At the same time, Congress should reauthorize, update, and increase funding for the program to ensure states have the ability to develop robust regional clean manufacturing hubs. As domestic clean energy supply chains emerge as a critical element of the national climate, manufacturing, and jobs agenda, this remains pursuant to the program’s goals of promoting energy security, resilience, and economic growth.

Plan of Action

The following action plan includes both executive and legislative actions to update SEP to enable states to plan for and develop a strong U.S. manufacturing base for clean energy. These actions should be implemented in Program Year 2023, with new program guidance issued in early 2023.

Recommendation 1. Make manufacturing an explicit goal of SEP and begin providing technical assistance for clean energy supply chain and manufacturing planning.

Manufacturing is critical to the program goals of energy security, resilience, and economic growth. To indicate its expanded mission, DOE should update the name of SEP to the “State Energy and Manufacturing Program (SEMP)” and begin providing technical assistance to support local and state clean energy supply chains and manufacturing capacity. While Congress should codify this goal, DOE can begin today by leveraging existing authorities like the Energy Technology Commercialization Services Program (42 U.S. Code § 6322(f)). This optional program helps small businesses and start-ups manufacture clean energy technologies (see FAQ #1). DOE can also consider whether to reinstate Renewable Energy Market Development programs, which under the American Recovery and Reinvestment Act (ARRA) covered efforts to “develop or expand existing manufacturing capacity for renewable energy equipment and components and support development of specific renewable energy facilities.” 

Recommendation 2. Extend eligibility of technical assistance to consortia of states to support regional planning. 

SEP is an arrangement between DOE and designated state energy offices. DOE should foster regional clean manufacturing ecosystems by issuing new program guidance that enables states to submit collaborative energy plans, particularly for optional plan components. 

Recommendation 3. Increase scale of funding and expand funding mechanisms. 

To enable more robust utilization of existing programs and expansion to manufacturing activities, Congress should increase overall funding for core SEMP activities to roughly $400 million per year (not including additional funding for challenge grants), commensurate with levels proposed by Congress in the CLEAN Future Act (see FAQ #2). Additionally, Congress should explicitly include clean energy and low-carbon manufacturing planning within the core SEMP planning and technical assistance process, and create a new revolving loan fund, the State Advanced Energy Manufacturing Fund, to provide additional financial support to states to use on manufacturing projects. As with SEP’s existing revolving loan fund for building efficiency, these funds could be distributed once the state has “demonstrated a commitment” to promoting clean energy manufacturing through state and private efforts.

Recommendation 4. Direct states to consider opportunities to coordinate with the Department of Commerce, Regional Commissions, and other DOE-led manufacturing initiatives. 

Several federal government programs, including the Economic Development Administration and Appalachian Regional Commission, already focus heavily on regional development strategies, which tend to consider advanced manufacturing opportunities. There are several existing DOE-led and DOE-adjacent initiatives that contribute to this mission as well, including DOE’s Advanced Manufacturing Office, the National Institute of Standards and Technology’s Manufacturing Extension Program (MEP), the Manufacturing USA institutes, and DOE battery manufacturing grants and hydrogen hubs authorized in IIJA. IIJA also authorized a new State Manufacturing Leadership program to provide competitive financial assistance to states that develop smart manufacturing programs.1 This program is fundamentally different from SEP – it provides short-term competitive assistance rather than long-term block grants, and focuses on advanced manufacturing techniques regardless of sector rather than clean energy supply chains specifically. However, it could be merged with an expanded SEMP, or at least closely coordinated. Additional legislation, such as the COMPETES Act — which contains funding for regional innovation hubs, microelectronics research centers, and direct grants for solar and semiconductor manufacturing — could build upon these regional ecosystems.

SEMP can and should complement these efforts by providing consistent, long-term support directly to state governments, rather than specific projects or companies, to effectively plan and coordinate regional development strategies focused on clean energy technologies. This will enable states to develop and execute on regional manufacturing roadmaps over the course of decades. To do so effectively, SEMP should coordinate with related programs and agencies to identify strategic opportunities for clean energy manufacturing, particularly during the guidance development process.

Recommendation 5. Direct states to dedicate at least forty percent of funds to low-income, environmental justice, and energy communities. 

Under the Biden-Harris Administration’s Justice 40 commitment, forty percent of DOE funds are to be directed to underserved communities. Clean manufacturing can be a crucial tool for promoting economic revitalization and environmental justice in these communities, including those that have historically hosted emissions-intensive manufacturing facilities or fossil fuel production. DOE’s Office of Economic Impact and Diversity should help to connect states with tools, such as its energy justice dashboard and the funding clearinghouse from the Interagency Working Group on Coal & Power Plant Communities, and provide technical assistance to identify and prioritize these communities in SEMP-supported initiatives. 

Frequently Asked Questions
Are these reforms to the State Energy Program within statutory authority?

Yes. Under existing authority, SEP technical assistance and funds support state energy plans that include a series of mandatory components focused on efficiency, but may also include additional measures to promote renewable energy commercialization, manufacturing, and deployment. During the ARRA-era expansion of SEP, more than $250 million in assistance went to the purpose of “Renewable Energy Market Development,” which aimed to “develop or expand existing manufacturing capacity for renewable energy equipment and components and support development of specific renewable energy facilities.” Three specific provisions that may support manufacturing efforts are 42 U.S. Code § 6322(d)(11), “programs to promote energy efficiency as an integral component of economic development planning;”[1] 42 U.S. Code § 6322(d)(7), “programs to promote the adoption of integrated energy plans which provide for . . . evaluation of a State’s . . . available energy resources . . . and . . . energy supplies;”[2] and 42 U.S. Code § 6322(f),  the Energy Technology Commercialization Services Program. Under the latter, states can devise plans to:



  1. aid small and start-up businesses in discovering useful and practical information relating to manufacturing and commercial production techniques and costs associated with new energy technologies;

  2. encourage the application of such information in order to solve energy technology product development and manufacturing problems;

  3. establish an Energy Technology Commercialization Services Program affiliated with an existing entity in each State;

  4. coordinate engineers and manufacturers to aid small and start-up businesses in solving specific technical problems and improving the cost effectiveness of methods for manufacturing new energy technologies;

  5.  assist small and start-up businesses in preparing the technical portions of proposals seeking financial assistance for new energy technology commercialization; and

  6.  facilitate contract research between university faculty and students and small start-up businesses, in order to improve energy technology product development and independent quality control testing.


[1] “[E]nergy efficient, next-generation materials and innovative process technologies” align with DOE’s efforts on advanced manufacturing. See DOE Advanced Manufacturing Office, Research & Development.


[2]  Integrated resource planning often addresses fuel (e.g., coal, natural gas) availability, and with the 21st century’s rapid deployment of renewable energy and battery storage facilities, it is now additionally critical to analyze and promote plans to strengthen the supply chain for renewable energy and battery storage components.

Has SEP been expanded in the past?

While annual block funding for states has settled at $62.5 million in recent years, Congress has pursued significant expansions to SEP. ARRA provided more than $3 billion to SEP, with no matching requirements for states, as part of its temporary green stimulus (the program created more than 100,000 jobs). ARRA also temporarily expanded SEP’s activities to broader clean energy market development, including manufacturing. In the current Congress, the CLEAN Future Act proposes an infusion of $3.6 billion over ten years in formula grants to states to enable states, localities, and tribes to reduce emissions, deploy clean energy, and improve efficiency at public facilities. At least 40% of funds would need to be set aside for environmental justice and/or low-income communities. Last year, IIJA authorized a State Manufacturing Leadership program that, while not explicitly a part of SEP, could provide a blueprint for an expanded state block grant program. Finally, DOE’s FY22 budget justification also requested $300 million to enable “Build Back Better Challenge grants to incubate novel approaches to clean energy technology deployment, prioritizing investments that meet energy needs at the local level, and are inclusive in elevating impoverished and disenfranchised communities, and/or communities that have been marginalized or overburdened.” The final FY22 appropriations bill provided $70 million for SEP and $20 million for the challenge grants, per the Senate report.

Why are existing SEP funding levels insufficient?

By many measures, the U.S. is not deploying energy efficiency, clean electricity, and other decarbonization technologies at the speed necessary to avoid the worst effects of climate change. According to the International Energy Agency, if we hope to get on track to net-zero emissions by 2050, the global community will need to roughly triple investment in clean technology to more than $4 trillion by 2030. Our top economic competitor, China, is poised to capture a much larger share of this economic opportunity than the U.S., largely due to their proactive work to build out their supply chains. For instance, in the next two years, analysts forecast that China’s manufacturing capacity for wind and batteries will grow 42 and 150 percent, respectively. All of this points to the need for significant additional funding for programs that accelerate deployment of clean energy in the United States.


The ARRA-era expansion of SEP showed that states have the capacity to absorb significantly larger sums while maintaining strong returns-on-investment, leverage ratios, and job creation figures. For instance, ARRA funds amounted to a highly-efficient $14,000 per job created, inclusive of direct, indirect, and induced jobs. The funding levels proposed in this policy brief are an order of magnitude smaller than those in ARRA, but are aligned with recommendations from the Biden Administration’s DOE and the current Congress.

Why is SEP funding for manufacturing planning needed on top of related EDA funding and initiatives?

SEP funding provides consistent, direct support to state governments to enable effective long-term planning for clean energy and energy security, of which manufacturing and supply chains are a critical component. As the U.S. looks to strengthen its energy sector industrial base (ESIB), sustained and strategic regional planning efforts will be paramount. Since SEP provides regular block funding to states every year and has enjoyed decades of bipartisan support and a strong evidence base of success, a reauthorized SEMP can ensure that state, local, and Tribal governments have the tools they need to plan effectively over the long haul. While coordination with EDA technical assistance, public works, and other programs will be important, EDA provides more project-based funding at the local level, operates on shorter timeframes, and may or may not be ESIB-oriented.

Are state energy offices likely to be enthusiastic about expanded support?

The cost-shared structure of SEMP ensures that states are committed to the projects they undertake, and the historically high leverage ratio of federal to non-federal funds, sustained under a major funding influx through ARRA, suggests that states have an interest in more robust state energy planning and project development, and are therefore likely to welcome additional support. This extends to private actors as well. According to a 2015 program evaluation, “A number of studies of SEP activities have found that sponsors of ratepayer-funded programs collaborated closely with state energy offices to leverage their own resources, especially with the influx of ARRA funding. This means that, ‘in the absence of the program, the array of resources available to market actors in the [programmatic activity] would have been reduced not only by the absence of the SEP [programmatic] activities, but by a reduction in the level of resources available from other program sponsors.”

Eliminating Childhood Lead Poisoning Worldwide

An estimated 815 million children (one in three) around the globe have dangerous levels of lead in their bloodstream, levels high enough to cause irreversible brain damage and impose severe health, economic, and societal consequences. 96% of these children live in low- and middle-income countries (LMICs), where collectively only about $6–10 million from non-governmental organizations is available each year to address the problem. To help eliminate childhood lead poisoning worldwide, the U.S. Federal Government should (1) add blood lead level (BLL) testing to the USAID-led Demographic and Health Survey Program, (2) create a Grand Challenge for Development to end childhood lead poisoning, and (3) push forward a global treaty on lead control.

Challenge and Opportunity

Lead is a potent toxin that causes irreversible harm to children’s brains and vital organs. Elevated body lead levels result in reduced intelligence, lower educational attainment, behavioral disorders, violent crime, reduced lifetime earnings, anemia, kidney disease, and cardiovascular disease. Impacts of lead on cognitive development are estimated to cause nearly $1 trillion of income loss in LMICs annually. Adverse health effects related to lead poisoning account for 1% of the global disease burden, causing 1 million deaths annually and substantial disability.

This enormous burden of lead poisoning in LMICs is preventable. It results from a combination of sources of exposure, some of the most important being:

These sources of lead exposure have been effectively regulated in the United States and other high-income countries, which have seen average blood lead levels in their populations decline dramatically over the last 40 years. To achieve the same success, LMICs will need to prioritize policies such as:

LMICs generally face three major barriers to implementing such policies:

  1. Lack of data on blood lead levels and on the scale and severity of lead poisoning. Most LMICs have no studies measuring blood lead levels. Policymakers are therefore unaware of the extent of the problem and hence unlikely to act in response. 
  2. Lack of data on which sources of lead exposure are the biggest local contributors. Causes of lead poisoning vary spatially, but the vast majority of LMICs have not conducted source-apportionment studies. This makes it difficult to prioritize the most impactful policies. 
  3. Limited access to equipment needed to detect lead in paint, spices, water, other sources, or the environment. Without needed detection capabilities, regulators cannot investigate the lead content of potential sources, nor can they monitor and enforce regulation of known sources. 

These barriers are relatively simple to overcome, and when they are overcome do indeed result in action. As an example, at least 20 LMICs introduced legally binding lead paint regulation after the Global Alliance to Eliminate Lead Paint and its partners helped those countries confirm that lead paint was an important source of lead poisoning. Moreover, addressing childhood lead poisoning is in line with the priorities of the Biden Administration and the U.S. Agency for International Development (USAID). The Administration has already proposed an ambitious $15 billion plan to address childhood lead poisoning in the United States by eliminating lead pipes and service lines. By contributing to global elimination efforts (for only a fraction of what it will cost to solve the problem domestically), the Administration can multiply its impact on reducing childhood lead poisoning. Doing so would also advance USAID’s mission of “advanc[ing] a free, peaceful, and prosperous world”, since a reduction in childhood lead poisoning worldwide would improve health, strengthen economies, and prevent crime and conflict.

Plan of Action

Lead poisoning, from a variety of sources, affects one in three children worldwide. This is an unacceptable situation that demands action. The United States should adopt a three-part roadmap to help LMICs implement and enforce policies needed to achieve global elimination of childhood lead poisoning. 

Recommendation 1. Add blood lead level (BLL) testing to the USAID-led Demographic and Health Survey. 

USAID, through its Demographic and Health Survey (DHS), is in an ideal position to address the first barrier that LMICs face to implementing anti-lead poisoning policies: lack of data and awareness. The DHS collects, analyzes, and disseminates accurate and representative data on health in over 90 countries. Including BLL testing in the DHS would:

As such, USAID should add BLL testing of children into the DHS Biomarker Questionnaire for all host countries. This could be done in DHS revision for Phase 9, beginning in 2023. Including BLL testing in the DHS is also the first step to addressing the second barrier that LMICs face: lack of data on sources of lead exposure. BLL data collected through the DHS would reveal which countries and populations have the greatest lead burdens. These data can be leveraged by researchers, governments, and NGOs to investigate key sources of lead exposure.

BLL testing of children is feasible to carry out in the context of the DHS. It was successfully piloted in 1998 and 2002 via the DHS presence in India and Uzbekistan, but not rolled out further. Testing can be carried out using finger-stick capillary sampling and portable analyzers, so venipuncture and laboratory analysis are not required. Further, such testing can be carried out by health technicians who are already trained in capillary blood testing of children for anemia as part of the DHS. The testing can be conducted while questionnaires are administered, and results and any follow-up actions can be shared with the parent/guardian immediately. Alternatively, laboratory lead tests can be added onto sample analysis if blood draws are already being taken. Costs are low in both cases, estimated at around $10 per test. 

Recommendation 2. Create a Grand Challenge for Development to end childhood lead poisoning.

Childhood lead poisoning in LMICs is dramatically neglected relative to the scale of the problem. Though childhood lead poisoning costs LMICs nearly $1 trillion annually and accounts for 1% of the global disease burden, only about $6–10 million per year is dedicated to addressing the problem. A USAID-led Grand Challenge for Development to end childhood lead poisoning would mobilize governments, companies, and foundations around generating and implementing solutions. In particular, the Challenge should encourage solutions to the second and third barriers presented above: lack of data on sources of lead exposure and limited detection capacity. 

Recommendation 3. Push forward a global treaty on lead control.

A global push is needed to put childhood lead poisoning on the radar of decision-makers across the world and spur implementation and enforcement of policies to address the issue. The Biden Administration should lead an international conference to develop a global treaty on lead control. Such a treaty would set safe standards for lead in a variety of products (building on the Global Alliance to Eliminate Lead Paint’s toolkit for establishing lead-paint laws) and recommend regulatory measures to control sources of lead exposure. The success of the UN’s Partnership for Clean Fuels and Vehicles in bringing about global elimination of leaded gasoline illustrates that international political will to act can indeed be generated around lead pollution. 

Conclusion

By implementing this three-part roadmap the Biden administration and USAID can make a historic and catalytic contribution towards global elimination of lead poisoning. There is true urgency; the problem becomes harder to solve each year as more lead enters the environment where it will remain a source of exposure for decades to come.  Acting now will improve the health, wellbeing and potential of hundreds of millions of children. 

Frequently Asked Questions
How do we know that childhood lead poisoning is a global problem if there is very little data on it?

Though relatively little investigation has been done on childhood lead poisoning in LMICs, the studies that do exist have consistently shown very high levels of lead poisoning. A recent systematic reviewidentified studies of background levels of childhood lead exposure in 34 LMICs. According to the review, “[o]f the 1.3 billion children (aged 0–14 years) living in the 34 LMICs with acceptable data on background blood lead levels in children, approximately 632 million…were estimated to have a level exceeding the CDC [Centers for Disease Control and Prevention] reference value of 5 μg/dL, and 413 million…were estimated to exceed the previous reference value of 10 μg/dL.” Data collected by the Institute of Health Metrics and Evaluation and analyzed in a joint UNICEF/Pure Earth report published in 2020 similarly concluded that dangerously elevated BLLs affect over 800 million children worldwide.

Why are levels of lead poisoning so high in LMICs and what are the sources?

Major sources of lead poisoning in LMICs include paint, spices, cookware, pottery, pipes, cosmetics, toys, unsafe lead-acid battery recycling, unsafe e-waste recycling, and poorly controlled mining and smelting operations. High-income countries like the United States have relatively low levels of lead poisoning due to strong regulations around these sources of lead poisoning. Most high-income countries have, for instance, banned lead in gasoline and paint, set enforceable standards around the lead content of water, and imposed strong regulations around food adulteration. As a result, median BLLs in high-income countries have declined dramatically (in the United States, from 15ug/dL in the 1970s to <1µg/dL today). LMICs generally lack many of these effective controls around lead exposure and therefore have very high levels of childhood lead poisoning.

What policies and interventions need to be in place in LMICs to eliminate childhood lead poisoning?

The most important thing that can be done to tackle the scourge of childhood lead poisoning is to impose source controls that prevent lead from entering the environment or consumer products. Though the relative contributions of different sources to childhood lead poisoning differ by country, effective policies and interventions tend to include:



  • Regulations limiting the lead content of paint available on the market.



  • Regulation of lead-acid battery and e-waste recycling practices.



  • Inclusion of lead parameters in national drinking-water-quality standards.



  • Regulation of the use of lead compounds in other locally important sources, such as spices, ceramics, cookware, toys, and cosmetics. 


To enforce these policies, LMICs need testing capacity sufficient to monitor lead levels in potential exposure sources and in the environment. LMICs also need BLL monitoring to track the impact of policies and interventions. Fully eliminating childhood lead poisoning will ultimately involve abatement: i.e., removing lead already in the environment, such as by taking off lead paint already on walls and by replacing lead pipes. However, these interventions are extremely costly, with much lower impact per dollar than preventing lead from entering the environment in the first place.

Why is global childhood lead poisoning such a neglected issue despite its enormous scale?

An extreme lack of awareness, lack of data, and lack of advocacy around childhood lead poisoning in LMICs has created a vicious cycle of inattention. A large part of the problem is that lead poisoning is invisible. Unlike a disease like malaria, which causes characteristic cyclical fevers that indicate their cause, the effects of lead poisoning are more difficult to trace back.

Deploy a National Network of Air-Pollution and CO2 Sensors in 300 American Cities by 2030

Summary

The Biden-Harris Administration should deploy a national network of low-cost, co-located, real-time greenhouse gas (GHG) and air-pollution emission sensors in 300 American cities by 2030 to help communities address environmental inequities, combat global warming, and improve public health. Urban areas contribute more than 70% of total GHG emissions. Aerosols and other byproducts of fossil-fuel combustion — the major drivers of poor air quality — are emitted in huge quantities alongside those GHGs. A “300 by ‘30” initiative establishing a national network of local, ground-level sensors will provide precise and customized information to drive critical climate and air-quality decisions and benefit neighborhoods, schools, and businesses in communities across the nation. Ground-level dense sensor networks located in community neighborhoods also provide a resource that educators can leverage to engage students on co-created “real-time and actionable science”, helping the next generation see how science and technology can contribute to solving our country’s most challenging issues.

Challenge and Opportunity

U.S. cities contribute 70% of our nation’s GHG emissions and have more concentrated air pollutants that harm neighborhoods and communities unequally. Climate change profoundly impacts human health and wellbeing through drought, wildfire, and extreme-weather events, among numerous other impacts. Microscopic air pollutants, which penetrate the body’s respiratory and circulatory systems, play a significant role in heart disease, stroke, lung cancer, and asthma. These diseases collectively cost Americans $800 billion annually in medical bills and result in more than 100,000 Americans dying prematurely each year. Also, health impacts are experienced more acutely for certain communities. Some racial groups and poorer households, especially those located near highways and industry, face higher exposure to harmful air pollutants than others, deepening health inequities across American society. 

GHG emissions and ground-level air pollution are both negative products of fossil-fuel combustion and are inextricably linked. But our nation lacks a comprehensive approach to measure, monitor, and mitigate these drivers of climate change and air pollution. Furthermore, key indicators of air quality — such as ground-level pollutant measurements — are not typically considered alongside GHG measurements in governmental attempts to regulate emissions. A coordinated and data-driven approach across government is needed to drive policies that are ambitious enough to simultaneously and equitably tackle both the climate crisis and worsening air-quality inequities in the United States.

Technologies that are coming down in cost enable ground-level, real-time, and neighborhood-scale observations of GHG and air-pollutant levels. These data support cost-effective mapping of carbon dioxide (CO2) and air-quality related emissions (such as PM2.5, ozone, CO, and nitrogen oxides) to aid in forecasting local air quality, conducting GHG inventories, detecting pollution hotspots, and assessing the effectiveness of policies designed to reduce air pollution and GHG emissions. The result can be more successful, targeted strategies to reduce climate impacts, improve human health, and ensure environmental equity.

Pilot projects are proving the value of hyper-local GHG and air-quality sensor networks. Multiple universities, philanthropies, and nongovernmental organizations (NGOs) have launched pilot projectsdeploying local, real-time GHG and air-pollutant sensors in cities including Los Angeles, New York City, Houston, TX, Providence, RI, and cities in the San Francisco Bay Area. In the San Francisco Bay Area, for instance, a dense network of 70 sensors enabled researchers to closely investigate how movement patterns changed as a result of the COVID-19 pandemic. Observations from local air-quality sensors could be used to evaluate policies aimed at increasing electric-vehicle deployment, to demonstrate how CO and NOx emissions from vehicles change day to day, and to prove that emissions from heavy-duty trucks disproportionately impact lower-income neighborhoods and neighborhoods of color. The federal government can and should incorporate lessons learned from these pilot projects in designing a national network of air-quality sensors in cities across the country. 

Components of a national air-quality sensor network are in place. On-the-ground sensor measurements provide essential ground-level, high-spatial-density measurements that can be combined with data from satellites and other observing systems to create more accurate climate and air-quality maps and models for regions, states, and the country. Through sophisticated computational models, for instance, weather data from the National Oceanic and Atmospheric Administration (NOAA) are already being combined with existing satellite data and data from ground-level dense sensor networks to help locate sources of GHG emissions and air-pollution in cities throughout the day and across seasons. The Environmental Protection Agency (EPA) is working on improving these measurements and models by encouraging development of standards for low-cost sensor data. Finally, data from pilot projects referenced above is being used on an ad hoc basis to inform policy. Data showing that CO2 emissions from the vehicle fleet are decreasing faster than expected in cities with granular emissions monitoring are that policies designed to reduce GHG emissions are working as or better than intended. Federal leadership is needed to bring the impacts of such insights to scale on larger and even more impactful levels.

A national network of hyper-local GHG and air-quality sensors will contribute to K–12 science curricula. The University of California, Berkeley partnered with the National Aeronautics and Space Administration (NASA) on the GLOBE educational program. The program provides ideas and materials for K–12 activities related to climate education and data literacy that leverage data from dense local air-quality sensor networks. Data from a national air-quality sensor network would expand opportunities for this type of place-based learning, motivating students with projects that incorporate observations occurring on the roof of their schools or nearby in their neighborhoods to investigate the atmosphere, climate, and use of data in scientific analyses.Scaling a national network of local GHG and air-quality sensors to include hundreds of cities will yield major economies of scale. A national air-quality sensor network that includes 300 American cities — essentially, all U.S. cities with populations greater than 100,000 — will drive down sensor costs and drive up sensor quality by growing the relevant market. Scaling up the network will also lower operational costs of merging large datasets, interpreting those data, and communicating insights to the public. This city-federal collaboration would provide validated data needed to prove which national and local policies to improve air quality and reduce emissions work, and to weed out those that don’t. 

Plan of Action

The National Oceanic and Atmospheric Administration (NOAA), in partnership with the Bureau of Economic Analysis, the Centers for Disease Control and Prevention (CDC), the Environmental Protection Agency (EPA), the National Aeronautics and Space Administration (NASA), the National Institute of Standards and Technology (NIST), and the National Science Foundation (NSF) should lead a $100 million “300 by ’30: The American City Urban Air Challenge” to deploy low-cost, real-time, ground-based sensors by the year 2030 in all 300 U.S. cities with populations greater than 100,000 residents.

The initiative could be organized and managed by region through an expanded NOAA Regional Collaboration Network, under the auspices of NOAA’s Office of Oceanic and Atmospheric Research. NOAA is responsible for weather and air-quality forecasting and already manages a large suite of global CO2 and global air-quality-related observations along with local weather observations. In a complementary manner, the “300 by ‘30” sensor network would measure CO2, CO (carbon monoxide), NO (nitric oxide), NO2 (nitrogen dioxide), O3 (ozone), and PM2.5 (particulate matter down to 2.5 microns in size) at the neighborhood scale. “300 by ‘30” network operators would coordinate data integration and management within and across localities and report findings to the public through a uniform portal maintained by the federal government. Overall, NOAA would coordinate sensor deployment, network integration and data management and manage the transition from research to operations. NOAA would also work with NIST and EPA to provide uniform formats for collecting and sharing data.

Though NOAA is the natural agency to lead the “300 by ‘30” initiative, other federal agencies can and should play key supporting roles. NSF can support new approaches to instrument design and major innovations in data and computational science methods for analysis of observations that would transition rapidly to practical deployment. NIST can provide technical expertise and leadership in much-needed standards-setting for GHG measurements. NASA can advance the STEM-education portion of this initiative (see below), showing educators and students how to observe GHGs and air quality in their neighborhoods and how to link ground-level observations to observations made from space. NASA can also work with NOAA to merge high-density ground-level and wide-area space-based datasets. BEA can develop local models to provide the nonpartisan, nonpolitical economic information cities will need to inform urban air-policy decisions triggered by insights from the sensor network. Similarly, the EPA can help guide cities in using climate and air-quality information from the sensor network. The CDC can use network data to better characterize public-health threats related to climate change and air pollution, as well as to coordinate responses with state and local health officials. 

The “300 by ‘30” challenge should be deployed in a phased approach that (i) leverages lessons learned from pilot projects referenced above, and (ii) optimizes cost savings and efficiencies from increasing the number of networked cities. Leveraging its Regional Collaboration Network, NOAA would launch the Challenge in 2023 with an initial cohort of nine cities (one in each of NOAA’s nine regions). The Challenge would expand to 25 cities by 2024, 100 cities by 2027, and all 300 cities by 2030. The Challenge would also be open to participation by states and territories whose largest cities have populations less than 100,000.

The challenge should also build on NASA’s GLOBE program to develop and share K–12 curricula, activities, and learning materials that use data from the sensor network to advance climate education and data literacy and to inspire students to pursue higher education and careers in STEM. NOAA and NSF could provide additional support in promoting observation-based science education in classrooms and museums, illustrating how basic scientific observations of the atmosphere vary by neighborhood and collectively contribute to weather, air-quality, and climate models.

Frequently Asked Questions
Has something like the “300 by ‘30” initiative been tried before?

Recent improvements in sensor technologies are only now enabling the use of dense mesh networks of sensors to precisely pinpoint levels and sources of GHGs and air pollutants in real time and at the neighborhood scale. Pilot projects in the San Francisco Bay Area, Los Angeles, Houston, Providence, and New York City have proven the value of localized networks of air-quality sensors, and have demonstrated how data from these sensors can inform emissions-reductions policies. While individual localities, states, and the EPA are continuing to support pilot projects, there has never been a national effort to deploy networked GHG and air-quality sensors in all of the nation’s largest cities, nor has there been a concerted effort to link data collected from such sensors at scale.

If the proposed sensor networks will be inherently local, then why does the federal government need to get involved?

Although urban areas are responsible for over 70% of national GHG emissions and over 70% of air pollution in urban environments, even cities with existing policy approaches to GHGs and air quality lack the information to rapidly evaluate whether their emissions-reduction policies are effective. Further, COVID-19 has impacted local revenue, strained municipal budgets, and has understandably detracted attention from environmental issues in many localities. Federal involvement is needed to (i) give cities the equipment, data, and support they need to make meaningful progress on emissions of GHGs and air pollutants, (ii) coordinate efforts and facilitate exchange of information and lessons learned across cities, and (iii) provide common standards for data collection and sharing.

Is there precedent for this initiative in other countries?

A pilot project including a 20-device sensor network was led by U.S. scientists and developed for the City of Glasgow, Scotland as a demonstration for the COP26 climate conference. The City of Glasgow is an active partner in efforts to expand sensor networks, and is one model for how scientists and municipalities can work together to develop needed information presented in a useful format.

Where will the sensors come from?

Sensors appropriate for this initiative can be manufactured in the United States. A design for a localized network air-quality sensors the size of a shoe box has been described in freely available literature by researchers at the University of California, Berkeley. Domestic manufacture, installation, and maintenance of sensors needed for a national monitoring network will create stable, well-paying jobs in cities nationwide.

Which organizations are already working in this space?

Leading scientific societies Optica (formerly OSA) and the American Geophysical Union (AGU) are spearheading the effort to provide “actionable science” to local and regional policymakers as part of their Global Environmental Measurement & Monitoring (GEMM) Initiative. Optica and AGU are also exploring opportunities with the United Nations Human Settlements Program (UN-Habitat) and the World Meteorological Organization (WMO) to expand these efforts. GHG- and air-quality-measurement pilot projects referenced above are based on the BEACO2N Network of sensors developed by University of California, Berkeley Professor Ronald Cohen.

What about methane

Creating a Judicial Innovation Fellowship to Strengthen America’s Court Infrastructure and Improve Access to Justice

Summary

People in the United States face a persistent gap in access to justice. Complex and outdated processes of the judicial system and court administration present significant barriers for individual litigants, who are, for the most part, poor and not represented by lawyers. Unfortunately, despite a willingness to innovate, court administrators often lack budget, staff, or time to address underlying technical challenges effectively.

To overcome these issues, Congress should create and fund a Judicial Innovation Fellowship that brings experienced technologists and service designers into state, tribal, and federal courts to improve judicial administration, transparency, and access to justice. Like programs in the U.S. federal executive and legislative branches (such as the United States Digital Service and Tech Congress), the Judicial Innovation Fellowship will embed mid-career technology professionals for “tours of duty” in state, tribal, and federal judiciaries. The Fellowship will bring much-needed talent and resources to America’s underfunded courts, creating a multiplier effect that will increase the quality of justice in the United States. 

Challenge and Opportunity

Technical shortcomings of state courts exacerbate twin national crises: (1) the access-to justice-gap, and (2) mass incarceration. Each year across the United States, 55 million Americans experience 260 million civil legal problems—including issues with eviction, consumer debt, domestic violence, veterans’ benefits, disability access, and health care—with little to no support. 86% of low-income individuals facing a legal problem receive inadequate or no civil legal help. This is the justice gap. Meanwhile, an average of 630,000 people sit in pretrial detention every day. We know very little about this population, including to what extent pretrial detention is merited. In addition to representing a moral failure, unresolved legal issues can cause medical problems and lost wages or employment. Such issues cost the United States nearly 1.5% of GDP every year. 

These problems have gotten worse over the past decade. The World Justice Project, which tracks the rule of law, has shown that Americans’ ability to access counsel declined from 2010 to 2020. State and federal courts have long faced accessibility and backlog challenges that have deferred, if not denied, access to justice for those who seek help. The COVID-19 pandemic has exacerbated the issue, with states around the country facing unprecedented delays of civil and criminal hearings. Federal courts have also faced problematic delays and “staggering” caseloads as a result of the pandemic. While many courts have shown impressive flexibility and creativity in adopting new technologies—sometimes on the fly during the pandemic—there remains a significant need to rethink and redesign fundamental aspects of court procedures and tools to meaningfully improve court administration. 

Indeed, shortcomings in court technology and data clearly exacerbate the access-to-justice gap and hinder court administration. For example, collection, storage, and sharing of data related to trials and courts is limited and piecemeal around the country. This means that there are not reliable numbers on the use of bail in criminal matters or self-represented litigants in civil court, making informed decision making and analysis nearly impossible. Increased need for digital court contact during the pandemic has also created new technical challenges for electronic filing, real-time translation, and security.

Courts are aware of the need for improved data and technology. The federal judiciary’s September 2020 Strategic Plan made “harnessing technology’s potential” a priority, including “develop[ing], operat[ing], and secur[ing] cost-effective national and local systems and infrastructure. State courts have underscored their commitment to achieving “100% effective assistance for essential civil legal needs“ and set forth a “tactical plan for technology“ to improve court functioning. Accomplishing these goals will require a comprehensive national effort to attract and nurture a technical talent pipeline to the judiciary. 

The state and federal judiciaries have in-house IT staff to manage legacy court systems [e.g., the federal judiciary’s case management/electronic case files (CM/ECF system)] and networks. To date, however, there have been only a few examples of programs to systematically bring new technology and design talent into the judiciary. One such effort is the American Association for the Advancement of Science (AAAS)’s Judicial Branch Fellowship. This program “allows an accomplished scientist or engineer to contribute their scientific and technical expertise to federal judicial administration and case management.” The program supports one to two fellows each year in serving as a resource for the staff of the Federal Judicial Center. AAAS Judicial Branch Fellows have tackled legal issues involving technology as well as courthouse technology directly. For example, one fellowfocused on the accessibility of courts and court records for individuals with disabilities. Other fellows developed resources for judges on neuroscience and empirical research on how court rules impact litigants’ behavior. Though impactful, the AAAS Judicial Branch Fellowship remains modest in scale and there have not yet been any efforts to replicate or expand it. 

There have been similarly few efforts to bring new technology and design talent into state and tribal judiciaries. In 2018, the Judicial Council of California hired service designers to conduct a research project to improve digital services for self-represented civil litigants. As a part of this project, the team observed and interviewed self-represented litigants, court staff, courtrooms, and attorneys to understand needs and how to design solutions to improve the process for self-represented litigants. At Sacramento State University, the Center for California Studies’ Judicial Fellowship Program has helped superior courts throughout California adopt self-help tools to aid litigants during the COVID-19 crisis, including live-chat functionality and video appearances. In August 2020, the Utah Supreme Court launched the Office of Legal Services Innovation Office to support its innovation sandbox, a program designed to foster experimentation in the delivery of legal services in the state. Again, these examples showcase the promise of concerted efforts to advance judicial use of data and technology but have not been meaningfully integrated or scaled.

In contrast, both the executive and legislative branches have developed and deployed effective models for government innovation. In 2012, President Obama launched the Presidential Innovation Fellows (PIFs), a program managed by the General Services Administration (GSA) that recruits innovators from outside of government for one-year “tours of duty” within federal agencies to develop and launch innovative projects. The Obama-era White House later established the U.S. Digital Service (USDS) and 18F to serve as permanent technology units within the Executive Office of the President and GSA, respectively. In August 2021, the Biden Administration announced a U.S. Digital Corps through which early-career technologists join the federal government for two-year “tours of duty” within federal agencies.  Digital Corps is designed to complement the work of USDS, 18F, and the PIFs. 

The federal legislative branch similarly welcomes external talent for limited “tours of duty” through the Congressional Innovation Fellows (CIF) program run by TechCongress, a non-governmental effort. While CIF, like PIF, embeds mid-career technologists into the federal government, the former effort is intended to help “Congress aim for more informed decisions regarding technology and policy by allowing Congress to gain technical insight.” In effect, CIFs are policy advisors whereas PIFs are process innovators. The upshot is that programs like these can deliver impact through multiple avenues. The CIF, PIF, USDS, and 18F models provide a useful roadmap for similarly ambitious innovation initiatives in the judiciary. 

Plan of Action

Congress should fund a federal Judicial Innovation Fellowship (JIF) program with a primary responsibility of improving and maintaining our national judicial digital infrastructure—the data, technology, processes, and talent at the heart of the U.S. justice system. Funding will support both a permanent staff to ensure long-term sustainability and ownership of projects, as well as rotating fellows (technologists and designers motivated by working for the public interest) to bring fresh ideas and energy to judicial innovation both during and after their formal engagement in the JIF program. 

The JIF program, like the PIF and CIF programs, will comprise a one- or two-year “tour of duty” in the federal or state judiciary. During this time, the fellows will receive training in justice issues and court administration and will be embedded in federal and state court administrative offices to assist permanent staff and leverage leading-edge practices and technology to improve judicial workflows and expand equitable access to justice. Fellows will meet with each other once a month to share experiences and exchange feedback on their work. Fellowship managers will also meet with fellows one-on-one to check in on experiences and to provide support to fellows and the cohort at large. In the long term, the JIF program will provide a “pathway to permanence” for high-performing fellows to continue to work within the judiciary. A two-year pilot JIF program will cost $3 million to administer, a cost that includes salary for ten fellows and two permanent program staff, training, travel, and administrative costs.

Like the PIF and CIF programs, the JIF program will target mid-career professionals with design, data, technology, and product expertise. Most fellows will be housed in the local administrative offices for the specific courts where they are serving. Some fellows will serve from a state or federal central office (e.g., the Administrative Office of the U.S. Courts). Placing talent at both the federal and state levels will differentiate the JIF program from the PIF and CIF programs, which are federal programs that feed federal agencies and Congressional offices, respectively. 

Just as mid-career professionals will apply to serve as JIFs, courts and offices will apply to host JIFs. Applications will identify needs for process or technology improvements to advance public access to justice, equity, and court administration, and outline specific projects for JIFs to work on. Selected proposals will be honed with the help of the JIF program’s permanent staff. After a JIF is placed, staff at the hosting court or office will work closely with the JIF throughout the design, development, and deployment process of any proposed solutions. Initially, at least, we expect that JIFs will primarily support court administrative offices (e.g., clerks of the court or chief information officers) by: 

By focusing on these core issue areas, courts will be better suited to meet existing and emerging challenges. They will have better data to inform more effective administration themselves, tools to assist self-represented litigants, fresh perspectives to help close the yawning justice gap, and more. 

We propose launching the JIF program with an initial two-year pilot in partnership with at least three state courts. Courts will be picked based on their project proposals, capacity to host fellows, and ability to manage fellowship projects after the placement is complete. During the pilot, an inaugural team of fellows will work alongside existing court staff to prototype and implement an achievable project, to be memorialized in a final report and playbook. Due to limited resources within the judiciary, we expect that this initial pilot will be managed within a university center, non-governmental organization, or foundation, and funded by private foundations or non-governmental organizations. 

The pilot will be used to refine and support expansion of the JIF program, including by hiring a larger permanent staff and growing the fellowship class. In time, the JIF program will serve as a core pillar of a nationwide judicial innovation strategy to ensure a robust, secure judicial infrastructure that significantly improves access to justice well into the future. 

Conclusion

The ongoing coronavirus pandemic has significantly exacerbated a growing access-to-justice gap within America’s judicial infrastructure. Overcoming this gap calls for a bold and long-term solution. A Judicial Innovation Fellowship program would drive technology and design talent to state, tribal, and federal judiciaries—and in so doing, would create a novel talent pipeline to help our courts tackle their most pressing justice issues. 

Frequently Asked Questions
Why should JIF be federally administered and funded?

The justice crisis is a national crisis that requires an organized, national response. There is precedent for a program like the JIF program. The Legal Services Corporation and the State Justice Institute were created by Congress so that federal funding and technical support could be shared with state and local justice agencies. Doing so centralizes administration, which builds procedures and institutional knowledge that can be shared across jurisdictions while streamlining overhead costs.

Where will the Judicial Innovation Fellowship be housed?

For the pilot phase of the program, we propose that the Judicial Innovation Fellowship be located within an existing university center that focuses on civic technology and access to justice.


After the pilot phase, the Judicial Innovation Fellowship could be stationed within the Administrative Office of the Courts (AO) or spun out as an independent nonprofit with Congressional support, like the Legal Services Corporation. JIFs will typically be stationed within administrative offices of state, tribal, and federal courts, working closely with court staff on their innovation projects. If a fellow is working on a cross-court project (e.g., developing standards), it may be more appropriate for the fellow to be stationed at the AO rather than at a specific court administrative office.

Why focus on state, tribal, and federal courts? Why not just choose one?

The national access-to-justice crisis requires coordinated action at all levels of the judiciary. While many of the most pressing justice issues arise at the state-court level, many important legal issues also arise at the federal level (e.g., immigration, civil rights, and criminal justice). A comprehensive approach to advance innovation across federal, state, and tribal courts, will (1) enable coordinated sharing of best practices and solutions across courts, (2) ensure that no court is left behind and that all have access to tech talent, and (3) consider cross-jurisdictional solutions where appropriate.

How much will the Judicial Innovation Fellowship program cost?

We estimate that the two-year pilot will cost $3 million. Most of the budget will cover two full-time staff and up to eight fellows. We estimate that annual per-fellow salary will be approximately $150,000, a level on par with PIF salaries. Once the program is fully established, we anticipate an annual budget of $10 million.

Would launching the JIF program require new legislation?

A pilot JIF program could be launched without new federal or state legislation. However, federal funding appropriated directly for JIFs through legislation would support a more durable and robust program.

How will courts interested in supporting JIFs be identified?

Several federal and state courts have already taken particularly forward-thinking approaches to innovation. At the federal level, these include the U.S. Courts for the Northern District of California and for the Southern District of Texas. At the state level, these include the judiciaries of Arizona, California, Michigan, Texas, and Utah. We propose engaging with chief justices and clerks of these courts as likely early supporters of the JIF program.


A key lesson from the PIF program is that innovation fellows—particularly those from outside traditional political and legal fields—must have support from and access to agency decision-makers in order to achieve their goals. Assigning fellows to placements where their reception is lukewarm at best is a recipe for failure. To that end, we recommend establishing a formal process for courts to request JIF support—a request that would include a commitment to work collaboratively with any JIFs placed in their offices. Courts should also be encouraged by JIF program staff to take a co-leading role in defining priorities for assigned JIFs and to take a co-development role once a JIF-managed project is underway.

How might funding and resources be secured to sustain the JIF program for the long term?

There are a number of potential public and private sources of funding for the JIF program. Public funding would be best secured through dedicated Congressional appropriations. This public funding could then attract private funding from grant-making foundations. Universities could also support the JIF program through in-kind support (e.g., training) provided through law schools such as those at Stanford University and Georgetown University, both of which have strong technology and access-to-justice programs.

How would JIFs be selected?

The JIF program would source applicants from government, universities, and the private sector. The best applicants would be mid-career technology or service-design professionals with a passion for improving access to justice and strong technology or design skills. We will also solicit good practices for fellow recruitment from leaders behind other, similar innovation fellowship programs.

How would fellows be effectively onboarded so that they understand court culture and legal, financial, and institutional constraints?

The JIF program would provide structured training to all accepted fellows. The training would draw on key texts in court innovation, judges, and court reform leaders, and would include an overview of the U.S. judicial system (in particular, the functioning and administration of U.S. courts). Fellows would also receive training tailored to the court or office to which they are assigned, (e.g., information about court- and office-specific court issues and rules).

How can the JIF program promote sharing and reuse of solutions across courts?

The JIF program will need to be built for sustainability and transferability across jurisdictions, while recognizing and accounting for local differences. To that end, the program will ensure support from and collaboration with institutional decision makers, commit to open-source projects and open-access procedures, and allow for sufficient flexibility and independence to work creatively while prioritizing regular communication between fellows, JIF leadership, and court stakeholders.

A Digital Military Talent Initiative for Noncitizen Technologists

Summary

Competent and innovative technologists are crucial to the future of U.S. national security. But the National Security Commission on Artificial Intelligence (NSCAI) warns that a digital-talent deficit at the Department of Defense (DOD) represents the greatest impediment to the U.S. military’s effective embrace of emerging technologies (such as artificial intelligence). Absent radical course correction, demographic factors, including aging populations, stand to exacerbate this problem in coming years.

A new Digital Military Talent Initiative could help address the military’s digital-talent gap by providing an expedited path to U.S. citizenship through military service for noncitizen technologists aligned to NSCAI archetypes. Modernization of an already-existing DoD program, coupled with minor tweaks to the National Defense Authorization Act, could infuse digital talent by providing vetted noncitizens a pathway to accelerated naturalization through military service.

Challenge and Opportunity

A paucity of digital talent threatens the U.S. military’s current and future capability goals, as evidenced by the military’s ongoing inability to staff cyber units or achieve objectives set by the Pentagon’s Chief Data Officer. Global competition for digital talent requires the U.S. to get more creative with recruitment. The Director of the DOD’s Defense Innovation Unit noted that the Pentagon’s efforts to add science and technology talent to its workforce are “insufficient” given competitors’ gains in these arenas. 

If current efforts are insufficient to meet digital-talent needs, future efforts may have to be drastic. Projections suggest the U.S. population is aging, such that fewer working-age persons will be available relative to the broader population in years to come. This trend may have an outsize negative impact on the military’s available talent pool, as the military fills its ranks predominantly with younger workers. Compounding the problem, military-eligible tech talent is often highly sought-after in the private sector, where compensation may be orders of magnitude greater than in the military. Last, lack of lifestyle perks and flexibility may make the military a hard sell, especially for innovative and free-thinking talent.

Even the newest models for bringing private-sector talent into the military, such as the U.S. Digital Corps and cyber direct-hire authorities, only harness talent from existing U.S. citizens. Proposals for training more government technologists (i.e., by creating a federal digital service academy) are limited by the number of citizens who may be willing and able to participate. 

There is a blueprint that may help overcome these challenges. During the Global War on Terror, the U.S. military enlisted over 10,000 foreign volunteers through the Military Acquisitions Vital to the National Interest (MAVNI) program. Under this program, a select group of pre-screened noncitizens was offered the chance to obtain U.S. citizenship in exchange for military service. Notwithstanding an untimely termination that gave rise to a series of lawsuits, MAVNI was widely recognized as a success. However, the program was somewhat limited in scope. Although many MAVNI participants held advanced degrees, the skillsets the program sought were limited to certain foreign languages and medical specialties. Modernizing and expanding MAVNI — with statutory authority commensurate to the realities of modern conflict — may help mitigate digital talent shortages.

Modernizing and expanding MAVNI would also align with the NSCAI’s recommendation for a “comprehensive” legislative strategy to enable “highly skilled immigrants to encourage more AI talent to study, work, and remain in the United States.” Our nation’s inadequate strategies for recruiting foreign digital talent have caused leading companies like Google to appeal for Congressional assistance, even as peer nations like Canada have developed novel, effective policies to support digital immigration. During the Trump administration, Toronto became the fastest-growing location for tech-sector jobs in North America. The upshot is clear: the U.S. military — and the U.S. generally — faces a widening tech talent gap that requires out-of-the-box thinking to address.

Plan of Action

The authors propose a three-part plan of action for launching a national Digital Military Talent Initiative. Part 1 engenders minor modifications to existing law governing U.S. military eligibility. Part 2 involves modernizing the existing MAVNI program by expanding the definition of skills deemed “vital to the national interest”. Part 3 involves piloting and scaling the modernized MAVNI program in line with leading national security and cybersecurity practices. More detail on each of these components is provided below.

Part 1: Amend existing law governing U.S. military eligibility. 

Three sections of the U.S. Code should be modified. First, 10 U.S.C. § 504(b)(2) — which governs military enlistment of individuals who are neither U.S. citizens, permanent residents, nor citizens of Micronesia, the Marshall Islands, or Palau,1 should be modified to read:

“Notwithstanding paragraph (1), and subject to paragraph (3), the Secretary concerned may authorize enlistment of a person not described in paragraph (1) if the Secretary determines that such person possesses a critical skill or expertise that is vital to the national interest.”

In other words, 10 U.S.C. § 504(b)(2) should be modified by removing provision (B), which currently requires that an enlistee use their referenced “critical skill or expertise” in their “primary daily duties”. This requirement unnecessarily inhibits military commanders at all levels, since critical skills and expertise often include skills and expertise deployed only in moments of the utmost exigency.

Second, 10 U.S.C. § 504(b)(3) should be modified to read: 

“A Secretary concerned may not authorize more than 10,000 enlistments under paragraph (2) per military department in a calendar year until after the Secretary of Defense submits to Congress written notice of the intent of that Secretary concerned to authorize more than 10,000 such enlistments in a calendar year.” 

This language increases the enlistment number at which the Secretary of Defense is statutorily obligated to notify Congress and does away with the 30-day waiting period that the Secretary must wait between notifying Congress and proceeding with the enlistment authorization. These modifications are needed to accommodate anticipated recruitment under an expanded MAVNI and help the Secretary to move quickly on leveraging such a talent pool. It should be noted that over 14,000 individuals expressed interest in the first year that the U.S. Army sought to enlist recruits in the Global War on Terror pursuant to 10 U.S.C. § 504(b)(2)).

Third, 8 U.S.C. § 1440(a) should be modified by adding the following new subsection:

“Any person enlisted pursuant to 10 U.S.C. §504(b)(2) who has served honorably in an active-duty status in the military, during any period which the President by Executive Order designates as a period in which Armed Forces of the United States are or were engaged in nontraditional military operations in preparation for a substantial foreign threat that is new or novel in nature, may be naturalized as provided in this section if (1) at the time of enlistment, reenlistment, extension of enlistment, or induction such person shall have been in the United States, or (2) at any time subsequent to enlistment or induction such person shall have been lawfully admitted to the United States for permanent residence.”

This language increases the President’s authority to authorize expedited naturalization in certain instances of sub-threshold conflict. The included requirement that the President expressly designate such instances via an Executive Order creates political accountability around this authority.

Part 2: Modernize the DOD’s existing MAVNI program by authorizing enlistment for certain vetted noncitizens with critical digital competencies.

The Military Acquisitions Vital to the National Interest program authorizes certain noncitizens to enlist if they possess critical skills limited to certain foreign languages and medical specialties. As the demands of modern conflict have adjusted at the speed of technological advancement, so too should the way the U.S. staffs its military. The DOD should expand the MAVNI program to include skills aligned to the NSCAI’s digital-talent archetypes, the President’s recent Executive Order on improving the nation’s cybersecurity, and the FY2022 National Defense Authorization Act. The DOD should also validate key assumptions to confirm pilot feasibility, including:

Part 3: Pilot and scale the modernized MAVNI program to grow recruitment numbers and increase impact on military-service missions.

DOD should scale based on need using the following steps:

  1. Determine aggregate need for digital talent across the joint services to meet operational and institutional requirements.
  2. Define enlistment pathways for recruited digital talent. For instance, a recruit might first enter into a non-classified military occupational specialty — whether a unique specialty for uncleared digital talent or a traditional specialty. After naturalization, the recruit could a) shift to an existing enlisted role in information technology/networking, cyber, and electronic warfare, b) enter a potentially new digital-specialty role, or c) commission as a warrant or officer. 
  3. Scale MAVNI program infrastructure in alignment with DOD zero trust principles and architecture requirements.
  4. Develop professional-development and career pathways that incentivize recruited digital talent to remain engaged with the military requirements and to communicate about their experiences and successes. 
  5. Gather and implement feedback from program alumni and participants on topics including recruitment, retention, training, incentives, community-building, diversity, and inclusion

Conclusion

The DOD’s current digital-talent deficiencies may evolve into an existential vulnerability without significant course correction. The DOD can begin addressing these deficiencies through an integrated Digital Military Talent Initiative. Such an initiative should comprise three parts: (1) amending existing law governing enlistment eligibility; (2) expanding the definition of skills deemed “vital to the national interest;” and (3) piloting and scaling the MAVNI program to recruit tech talent for the military in alignment with leading national security and cybersecurity practices. Together, these actions will dramatically grow the U.S. military’s eligible digital talent pool, thus enabling it to better compete in future sub-threshold and armed conflict.

Piloting and Evaluating NSF Science Lottery Grants: A Roadmap to Improving Research Funding Efficiencies and Proposal Diversity

This memo was jointly produced by the Federation of American Scientists & the Institute for Progress

Summary

The United States no longer leads the world in basic science. There is growing recognition of a gap in translational activities — the fruits of American research do not convert to economic benefits. As policymakers consider a slew of proposals that aim to restore American competitiveness with once-in-a-generation investments into the National Science Foundation (NSF), less discussion has been devoted to improving our research productivity — which has been declining for generations. Cross-agency data indicates that this is not the result of a decline in proposal merit, nor of a shift in proposer demographics, nor of an increase (beyond inflation) in the average requested funding per proposal, nor of an increase in the number of proposals per investigator in any one year. As the Senate’s U.S. Innovation and Competition Act (USICA) and House’s America COMPETES Act propose billions of dollars to the NSF for R&D activities, there is an opportunity to bolster research productivity but it will require exploring  new, more efficient ways of funding research. 

The NSF’s rigorous merit review process has long been regarded as the gold standard for vetting and funding research. However, since its inception in the 1950s, emergent circumstances — such as the significant growth in overall population of principal investigators (PIs) — have introduced a slew of challenges and inefficiencies to the traditional peer-review grantmaking process: The tax on research productivity as PIs submit about 2.3 proposals for every award they receive and spend an average of 116 hours grant-writing per NSF proposal (i.e., “grantsmanship”), corresponding to a staggering loss of nearly 45% of researcher time; the orientation of grantsmanship towards incremental research with the highest likelihood of surviving highly-competitive, consensus-driven, and points-based review (versus riskier, novel, or investigator-driven research); rating bias against interdisciplinary research or previously unfunded researchers as well as reviewer fatigue. The result of such inefficiencies is unsettling: as fewer applicants are funded as a percentage of the increasing pool, some economic analysis suggests that the value of the science that researchers forgo for grantsmanship may exceed the value of the science that the funding program supports.

Our nation’s methods of supporting new ideas should evolve alongside our knowledge base.

Our nation’s methods of supporting new ideas should evolve alongside our knowledge base. Science lotteries — when deployed as a complement to the traditional peer review grant process — could improve the systems’ overall efficiency-cost ratio by randomly selecting a small percentage of already-performed, high quality, yet unfunded grant proposals to extract value from. Tested with majority positive feedback from participants in New Zealand, Germany, and Switzerland, science lotteries would introduce an element of randomness that could unlock innovative, disruptive scholarship across underrepresented demographics and geographies. 

This paper proposes an experimental NSF pilot of science lotteries and the Appendix provides illustrative draft legislation text. In particular, House and Senate Science Committees should consider the addition of tight language in the U.S. Innovation and Competition Act (Senate) and the America COMPETES Act (House) that authorizes the use of “grant lotteries” across all NSF directorates, including the Directorate of Technology and Innovation. This language should carry the spirit of expanding the geography of innovation and evidence-based reviews that test what works.

Challenge and Opportunity

A recent NSF report pegged the United States as behind China in key scientific metrics, including the overall number of papers published and patents awarded. The numbers are sobering but reflect the growing understanding that America must pick which frontiers of knowledge it seeks to lead. One of these fields should be the science of science — in other words not just what science & technology innovations we hope to pursue, but in discovering new, more efficient ways to pursue them. 

Since its inception in 1950, NSF has played a critical role in advancing the United States’ academic research enterprise, and strengthened our leadership in scientific research across the world. In particular, the NSF’s rigorous merit review process has been described as the gold standard for vetting and funding research. However, growing evidence indicates that, while praiseworthy, the peer review process has been stretched to its limits. In particular, the growing overall population of researchers has introduced a series of burdens on the system. 

One NSF report rated nearly 70% of proposals as equally meritorious, while only one-third received funding. With a surplus of competitive proposals, reviewing committees often face tough close calls. In fact, empirical evidence has found that award decisions change nearly a quarter of the time when re-reviewed by a new set of peer experts. In response, PIs spend upwards of 116 hours on each NSF proposal to conform to grant expectations and must submit an average of 2.3 proposals to receive an award — a process known as “grantsmanship” that survey data suggests occupies nearly 45% of top researchers’ time. Even worse, this grantsmanship is oriented towards writing proposals on incremental research topics (versus riskier, novel, or investigator-driven research) which has a higher likelihood of surviving a consensus-driven, points-based review. On the reviewer side, data supports a clear rating bias against interdisciplinary research or previously unfunded researchers PIs, while experts increasingly are declining invitations to review proposals in the interests of protecting their winnowing time (e.g., reviewer fatigue). 

These tradeoffs in the current system appear quite troubling and merit further investigation of alternative and complementary funding models. At least one economic analysis suggests that as fewer applicants are funded as a percentage of the increasing pool, the value of the science that researchers forgo because of grantsmanship often exceeds the value of the science that the funding program supports. In fact, despite dramatic increases in research effort, America has for generations been facing dramatic declines in research productivity. And empirical analysis suggests this is notnecessarily the result of a decline in proposal merit, nor of a shift in proposer demographics, nor of an increase (beyond inflation) in the average requested funding per proposal, nor of an increase in the number of proposals per investigator in any one year. 

As the Senate’s U.S. Innovation and Competition Act (USICA) and House’s America COMPETES Act propose billions of dollars to the NSF for R&D activities, about 96% of which will be distributed via the peer review, meritocratic grant awards process, now is the time to apply the scientific method to ourselves in the experimentation of alternative and complementary mechanisms for funding scientific research. 

Science lotteries, an effort tested in New Zealand, Switzerland, and Germany, represent one innovation particularly suited to reduce the overall taxes on research productivity while uncovering new, worthwhile initiatives for funding that might otherwise slip through the cracks. In particular, modified science lotteries, as those proposed here, select a small percentage of well-qualified grant applications at random for funding. By only selecting from a pool of high-value projects, the lottery supports additional, quality research with minimal comparative costs to the researchers or reviewers. In a lottery, the value to the investigator of being admitted to the lottery scales directly with the number of awards available. 

These benefits translate to favorable survey data from PIs who have gone through science lottery processes. In New Zealand, for example, the majority of scientists supported a random allocation of 2% total research expenditures. Sunny Collings, chief executive of New Zealand’s Health Research Council, recounted: 

“Applications often have statistically indistinguishable scores, and there is a degree of randomness in peer review selection anyway. So why not formalize that and try to get the best of both approaches?”

By establishing conditions for entrance into the lottery — such as selecting for certain less funded or represented regions — NSF could also over-index for those applicants less prepared for “grantsmanship”.

What we propose, specifically, is a modified “second chance” lottery, whereby proposals that are deemed meritorious by the traditional peer-review process, yet are not selected for funding are entered into a lottery as a second stage in the funding process. This modified format ensures a high level of quality in the projects selected by the lottery to receive funding while still creating a randomized baseline to which the current system can be compared.

The use of science lotteries in the United States as a complement to the traditional peer-review process is likely to improve the overall system.  However, it is possible that selecting among well-qualified grants at random could introduce unexpected outcomes. Unfortunately, direct, empirical comparisons between the NSF’s peer review process and partial lotteries do not exist. Through a pilot, the NSF has the opportunity to evaluate to what extent the mechanism could supplement the NSF’s traditional merit review process. 

By formalizing a randomized selection process to use as a baseline for comparison, we may discover surprising things about the make up of and process that leads to successful or high-leverage research with reduced costs to researchers and reviewers. For instance, it may be the case that younger scholars who come from non-traditional backgrounds end up having as much or more success in terms of research outcomes through the lottery program as the typical NSF grant, but are selected at higher rates when compared to the traditional NSF grantmaking process. If this is the case, then there will be some evidence that something in the selection process is unfairly penalizing non-traditional candidates. 

Alternatively, we may discover that the average grant selected through the lottery is mostly indistinguishable from the average grant selected through the traditional meritorious selection, which would provide some evidence that existing administrative burdens to select candidates are too stringent. Or perhaps, we will discover that randomly selected winners, in fact, produce fewernoteworthy results than candidates selected through traditional means, which would be evidence that the existing process is providing tangible value in filtering funding proposals.By providing a baseline for comparison, a lottery would offer an evidence-based means of assessing the efficacy of the current peer-review system. Any pilot program should therefore make full use of a menu of selection criteria to toggle outcomes, while also undergoing evaluations from internal and external, scientific communities.

Plan of Action

Recommendation 1: Congress should direct the NSF to pilot experimental lotteries through America COMPETES and the U.S. Innovation and Competition Act, among other vehicles. 

In reconciling the differing House America COMPETES and Senate USICA, Congress should add language that authorizes a pilot program for “lotteries.” 

We recommend opting for signaling language and follow-on legislation that adds textual specificity. For example, in latest text of the COMPETES Act, the responsibilities of the Assistant Director of the Directorate for Science and Engineering Solutions could be amended to include “lotteries”: 

Sec. 1308(d)(4)(E). developing and testing diverse merit-review models and mechanisms, including lotteries, for selecting and providing awards for use-inspired and translational research and development at different scales, from individual investigator awards to large multi-institution collaborations;

Specifying language should then require the NSF to employ evidence-based evaluation criteria and grant it the flexibility to determine timeline of the lottery intake and award mechanisms, with broader goals of timeliness and supporting the equitable distribution among regional innovation contenders. 

The appendix contains one example structure of a science lottery in bill text (incorporated into the new NSF Directorate established by the Senate-passed United States Innovation and Competition Act), which includes the following key policy choices that Congress should consider: 

Recommendation 2: Create a “Translational Science of Science” Program within the new NSF Technology, Innovation and Partnerships Directorate that pilots the use of lotteries with evidence-based testing: 

First, the NSF Office of Integrative Activities (OIA) should convene a workshop with relevant stakeholders including representatives from each directorate, the research community including NSF grant recipients, non-recipients, and SME’s on programmatic implementation from New Zealand, Germany, and Switzerland in order to temperature- and pressure-test key criteria for implementing piloted science lotteries across directorates. 

Appendix: Bill Text

Note: Please view attached PDF for the formatted bill text

H. ______

To establish a pilot program for National Science Foundation grant lotteries.

In the House of Representatives of the United States

February 2, 2022

______________________________

A BILL

Title: To establish a pilot program for National Science Foundation grant lotteries.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 

SEC. _____. Pilot Program to Establish National Science Foundation Grant Lotteries

Right to Review.—Nothing in this section shall affect an applicant’s right to review, appeal, or contest an award decision.

Supporting Market Accountability, Workplace Equity, and Fair Competition by Reining in Non-Disclosure Agreements

Summary

Overuse of non-disclosure agreements (NDAs) is a pervasive problem in the United States. Companies apply these silencing tools to prevent their workers from sharing critical information with one another and the public. This in turn threatens economic growth, limits competition, and inhibits workplace equity. Workers need reliable information about corporate practices to assess job quality, ensure personal safety, and obtain pay commensurate with their worth. The public needs information about corporate practices to decide how to use their investment and purchasing power. Yet existing laws give companies enormous latitude to designate information as confidential, allowing them to impose NDAs and other contract clauses and internal policies that prevent workers from sharing information with those who need to know.

It is time for government to rein in corporate secrecy. The #MeToo movement revealed how NDAs enable and perpetuate misconduct at work, prompting public outrage and support for legislative action. New empirical evidence has exposed just how widely NDAs are being used in the corporate world: researchers estimate that between 33% and 57% of U.S. workers are constrained by an NDA or similar mechanism.1 2 At recent hearings and public events, regulators have signaled their concern about the anti-competitive effects of restrictive employment agreements.3 Policymakers should seize this moment of support to pursue a comprehensive legislative and multi-agency agenda limiting inappropriate use of NDAs. A strong action plan should include proactive enforcement of existing laws governing NDAs; new legislation prohibiting the most harmful uses of NDAs; and interagency collaboration to educate the public, collect data, and support research on impacts of corporate secrecy practices. Together, these efforts to limit NDA abuse will promote market accountability, workplace equity, and fair competition.

Challenge and Opportunity

NDAs are contracts in which parties agree not to disclose any information designated confidential by the agreement. In some cases, NDAs may be used appropriately to protect valuable trade secrets or other intellectual property. But employers often draft these agreements broadly to conceal many other types of information, sometimes in ways that overstep existing legal bounds. For instance, the Weinstein Company required employees to sign NDAs that prohibit disclosure of “any confidential, private, and/or non-public information obtained by Employee during Employee’s employment with the Company concerning the personal, social, or business activities of the Company, the Co-Chairmen, or the executives, principals, officers, directors, agents, employees of, or contracting parties (including, but not limited to artists) with, the Company.”4 Some companies require employees to sign non-disparagement agreements. These particularly broad NDAs prohibit employees from disclosing any information that might, as a non-disparagement agreement for employees of Task Rabbit reads, “disparage the Company, and the Company’s officers, directors, employees, investors and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation.”5  NDAs and non-disparagement agreements often purport to apply indefinitely, preventing workers from sharing information long after they have left employment.

NDAs are imposed on workers at various points during the employment relationship. They are regularly included as part of a bundle of mandatory HR forms that new hires must sign as a condition of employment. They can also be imposed and enforced through confidentiality policies contained6 in personnel manuals or codes of conduct that prevent employees from sharing information about the company with outsiders and sometimes even with co-workers. They are also routinely included in standardized as well as negotiated severance agreements that workers sign when ending their employment. Lastly, they are also often included in settlement agreements that resolve workplace disputes and in agreements that force employees to arbitrate disputes in secret. By preventing workers from disclosing information on everything from workplace harassment and abuse to compensation practices and safety conditions, NDAs stifle competition, limit the free flow of ideas,7 and allow toxic workplace conditions to fester.8 9 10

Prevalence of NDAs

Researchers estimate that between 33% and 57% of U.S. workers are constrained by an NDA or similar mechanism.11 12 Yet it is difficult to precisely determine how many employees are silenced by NDAs because NDAs are designed to conceal information. In fact, NDAs often provide that the mere existence of the agreement is itself a secret. Lawyers regularly encourage firms13 to use broad NDAs as a condition of employment—not only to protect trade secrets, but also to discourage employees from revealing bad employment experiences.14 NDA prevalence also varies by sectors.

For instance, 73% of workers in “computer or mathematical jobs” report having an NDA with their employer.15 16

How NDAs Hurt Workers, the Public, and the Economy

The overuse of broad NDAs can have harmful economic and social effects. Depending on how they are drafted and enforced, NDAs may undermine law enforcement and regulatory compliance, distort labor and investment markets, constrain fair competition, allow toxic workplace conditions such as harassment and discrimination to persist, and undercut efforts to make workplaces more diverse and equitable.

Interference with Law Enforcement and Regulatory Compliance

Social, psychological, and economic disincentives already discourage employees from blowing the whistle on harmful and illegal corporate behavior.17 NDAs add another barrier preventing this critical information from reaching regulators and the public. NDAs have been used by companies to cover up illegal behavior. They have been used to silence whistleblowers who disclose information about products that threaten public health and safety.18 They have even been used to prevent employees from disclosing illegal conduct to government regulators despite countervailing law. A complaint filed by the California Department of Fair Employment and Housing (DFEH) against gaming company Activision Blizzard alleges that, contrary to law, the company pressured employees to sign contracts waiving their right to speak to investigators and requiring them to notify the company before disclosing information to DFEH.19 Some companies have required employees to agree to secrecy about corporate pay practices and diversity statistics, thereby depriving regulators of vital information about companies’ compliance with pay equity and anti-discrimination laws.20 The dangers of overly aggressive NDAs have become especially clear during the COVID-19 pandemic, when it is vital for the public to know if companies are disregarding essential health and safety guidelines designed to reduce virus spread.

Market Distortion

NDAs deprive individuals of information they need to assess competing job offers and make informed decisions about where to work. They also degrade the reliability of employer reviews that workers post to online job platforms. This is because workers subject to broad NDAs are more likely to censor themselves and withhold negative information. New research shows that on Glassdoor, workers in states with more stringent limits on NDAs are 16% more likely to give a one-star review, write 8% more about the “cons” of working at the firm, and discuss harassment at work 22% more often.21 That same research also shows that states with more stringent limits on NDAs increase reporting of sexual harassment and safety violations to federal agencies. NDAs hence remove an important check on corporate behavior, since companies have been shown to improve their practices in response to negative job reviews and investigations into their practices.22 NDAs thus enable bad employers to hide their flaws and make it difficult for good employers to distinguish themselves in the market.

Accurate information about workplace conditions is also valuable to investors, who have increasingly come to recognize that the ways companies treat their workers impact corporate financial performance.23 A nonprofit investment group recently called on the Securities and Exchange Commission to develop a standardized set of workplace-practice metrics as part of a comprehensive framework for evaluating socially responsible corporate governance.24 NDAs can hide information about workplace conditions that investors value.

Constraints on Fair Competition

Broad NDAs can impede fair competition. Research has demonstrated that non- compete agreements—which prohibit departing workers from joining competitors— impede worker mobility, economic growth, and new firm entry. Broad NDAs pose some of the same competitive risks as non-competes because they limit workers’ ability to share and apply knowledge gained through on-the-job experience. This in turn diminishes workers’ human capital and makes them less competitive in the labor market.25 Indeed, employers in states that ban non-competes have illegally attempted to use broad NDAs as an alternative mechanism to impede employee mobility.26

Harassment and Discrimination

NDAs conceal harassment, discrimination, and abuse in the workplace. As the #MeToo movement showed, perpetrators of harassment and discrimination are often repeat offenders.27 28 NDAs may prevent victims of harassment and discrimination from warning co-workers and prospective employees about a company’s toxic workplace environment, leaving others at risk. NDAs may also prohibit or inhibit employees from disclosing information to government agencies, shielding offenders from outside investigation. By limiting what employees can share, NDAs allow harmful and abusive behavior to persist.

Diversity, Equity, and Inclusion

Restrictions on employee disclosure of harassment and discrimination undermine the goal of achieving diverse and equitable workplaces. Workers of color, women, and LGBTQ+ workers are disproportionately likely to suffer harassment and discrimination in the workplace. Such adverse experiences can have significant psychological and professional consequences, including driving workers out of certain jobs and even out of certain industries.29 30 NDAs exacerbate these harms by suppressing information about systemic workplace inequities and by denying workers a forum to expose and discuss harassment and discrimination.

Corporate-secrecy practices shrouding employee compensation similarly undermine efforts of diverse employees to achieve pay equity. Contrary to law, some NDAs and confidentiality policies prohibit employees from discussing their compensation, which makes it challenging for those employees to negotiate fair salary terms commensurate with their value.31 Studies have found that states that adopted anti-secrecy pay laws increased gender wage equality relative to states that did not.32 33

National Leadership Is Needed

As described above, overly broad NDAs and the organizational secrecy practices they support pose serious risks to our economy and our society. Yet absent government intervention, these challenges will persist. Individual firms have incentives to maintain their reputations using corporate-secrecy tactics despite the social costs of such behavior. Many of those who value the information concealed by NDAs lack the capacity and power to pressure companies to change. Policymakers have an imperative to use the levers of government to curb NDA abuse.

A minority of states, including California, Illinois, New Jersey, New York and Washington, passed legislation in the wake of #MeToo regulating some uses of NDAs. But these laws comprise an inconsistent and incomplete regulatory patchwork. State laws differ in scope of coverage and impose different compliance standards, making it difficult for employees and companies to determine what employee disclosures are legally protected where. Moreover, the harms caused by NDAs do not stop at state lines. In fact, uneven regulation of NDAs further distorts markets by making it easier for companies to conceal information and restrict competition in some states than in others. Multi-state firms can use choice of law and choice of forum provisions to exploit inter-state legislative discrepancies, i.e., to apply the most lenient state-level secrecy laws to the entirety of a multi-state workforce.

The upshot is clear. National leadership is the only way to support market accountability, workplace equity, and fair competition by reining in non-disclosure agreements.

Plan of Action

Multiple policy interventions could curtail NDA misuse. Select options are presented below.

Better Enforce Existing Laws

Existing laws restrict some of the harmful uses of NDAs. But laws must be enforced to be effective. Research shows that some employers include unlawful non-compete clauses in their employment contracts, capitalizing on workers’ ignorance of the law and fears of being sued. Employers may similarly use NDAs in ways that violate existing law.34 35 Ensuring that employers are following laws that protect certain disclosures and forms of communication is a common-sense place to start when it comes to curbing NDA abuse.36

The Federal Trade Commission (FTC) has an important role to play in enforcement. The FTC has broad authority to punish companies engaging in unfair or deceptive practices that harm consumers or competitors, as NDA misuse often does.37 Unfair practices include practices that offend public policy as established by state statutes and common law,38 which already restrict use of overly broad NDAs as well as NDA misuse to silence disclosures of employer wrongdoing. Stronger enforcement by the FTC would give these laws some needed teeth and would help establish norms governing responsible NDA use. The FTC could also work with companies to develop standards and best practices around NDA use and to encourage companies to engage in robust self-regulation and police one another.39

Stronger enforcement of existing laws could also come from the various federal agencies that help oversee labor and employment in the United States. For example, the National Labor Relations Act protects workers who make common cause in seeking to discuss the terms and conditions of their employment. Regional offices of the National Labor Relations Board (NLRB) have the authority to investigate employers’ use of policies that discourage this type of communication, and to file unfair labor practice charges against employers acting unlawfully. The NLRB can and should exercise this authority more forcefully. Similarly, the Occupational Safety and Health Administration (OSHA) could better use its power to enforce whistleblower laws protecting employees who report unlawful behavior. The Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL) also receive complaints about unlawful employment practices, including retaliation against employees who report or object to discriminatory behavior, wage theft, and other violations. The EEOC and DOL should actively seek information about NDAs and related practices in the course of their investigations and should make pursuit of retaliation claims a top priority.

In addition to redoubling enforcement efforts in their respective spheres of jurisdiction, the aforementioned agencies should collaboratively develop and implement strategies for amplifying the collective impact of their oversight.

Prohibit the Most Pernicious Uses of NDAs

New federal laws should be enacted to ban employer-imposed secrecy regarding key categories of essential information, including firm diversity, harassment and discrimination, compensation practices, and workplace health and safety. The recently proposed Ending the Monopoly of Power Over Workplace Harassment through Education and Reporting Act (EMPOWER Act) would make it illegal for an employer to require or enforce an NDA or nondisparagement clause related to workplace harassment based on a range of protected characteristics, including sex, race, national origin, disability, age, or religion. The proposed law, which enjoys bipartisan support, would also establish a confidential tip line for reporting systematic workplace harassment.

The EMPOWER Act is a step in the right direction, but federal legislation should go even further. New laws are needed to protect a wider range of disclosures and to ensure that employees know their rights. A section of California’s Silenced No More Act provides one example. It prohibits companies from using NDAs to silence employees not only about harassment, but also about discrimination and other illegal conduct. To ensure that employees know their rights, the act requires employers who use NDAs for lawful purposes to include in these contracts language clarifying that “[n]othing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”

The federal Defend Trade Secrets Act (DTSA) provides another example of a provision that could be incorporated into new legislation aimed at reining in NDAs.40 Signed into law by President Obama in 2016, the DTSA requires employers to include language in all employment contracts notifying employees that they are immune from liability when blowing the whistle on unlawful employer behavior, even if doing so involves revealing trade secrets. This notice requirement could be expanded to cover any discussions about workplace conditions. It could also clarify that the NDAs may cover only technical information that is truly secret and not general skills, know- how, and job-related experience. This would give workers more freedom to leverage their knowledge in competing for quality jobs and market-based terms of employment.

Enacting a reform agenda that impacts the widest possible swath of employers requires Congressional action. However, President Biden could act immediately to limit NDA use by federal contractors. The president has the power to issue an executive order restricting or prohibiting the federal government from entering into contracts with companies that fail to adhere to certain rules. President Biden could issue an executive order requiring that federal contractors adhere to new rules prohibiting use of NDAs to conceal essential information, including information on firm diversity, harassment and discrimination, compensation practices, workplace health and safety, and other areas of regulatory compliance. In addition to the benefits discussed above, such rules could help prevent concealment of fraud by government contractors.

Collect Data and Require Disclosure

Research tells us that NDAs are common in American workplaces. Recent events have shown that some employers use NDAs to cover up unlawful behavior. Yet information on the prevalence and content of NDAs is still relatively scarce. Employers are not currently required to disclose their NDAs to any outside party or government regulator. Employers are also free to prohibit employees who sign NDAs from even revealing that the agreement exists. Without adequate information on the scope and nature of the NDA problem, it is difficult for lawmakers to craft well-tailored policy solutions that account for a variety of stakeholder concerns. Any law limiting NDAs must balance the damage that concealing information from the public imposes against the value of NDAs for employers when used appropriately. Legislation must also consider the personal interests of victims of misconduct who may prefer to keep their experiences secret.

Policymakers should therefore require organizations to disclose their NDAs and related clauses in employment agreements. The FTC should use its investigative authority under Section 6(b) of the FTC Act41 to gather and study these documents. The SEC should also consider requiring disclosure of companies’ use of NDAs as part of its broader response to investor demand for credible information about human- capital management42 43and environmental, social, and governance performance.44

In addition, the various agencies that investigate violations of employment laws should collaborate to conduct more research on the scope and effects of NDAs (as well as other corporate-secrecy practices) across states and industries. For instance, the EEOC already receives annual reports from employers about worker demographics, salary breakdowns by gender and race, and other employment information. A coordinated agency effort could provide insight into how NDAs affect diversity and equity in employment. Developing this type of data will help lawmakers assess the anti-competitive effects of corporate secrecy, balance competing policy interests, and draft effective legislation.

Fund Organizations, Not Projects: Diversifying America’s Innovation Ecosystem with a Portfolio of Independent Research Organizations

Summary

Dominant research-funding paradigms constrain the outputs of America’s innovation systems. Federal research-funding agencies like the National Institutes of Health (NIH) and the National Science Foundation (NSF) operate largely through milestone-scoped grants that fail to incentivize high-risk research, impose highly burdensome reporting requirements, and are closely managed by the government. Philanthropically-funded research organizations are an excellent mechanism to experiment with different research management approaches. However, they are perennially underfunded and rarely have a path to long-term sustainability.

A single program with two pieces can address this issue: 

First, the NSF’s new Technology, Innovation, and Partnership (TIP) Directorate should pilot a “organizations, not projects” program in which philanthropically matched grants fund a portfolio of independent research organizations instead of funding specific research initiatives. Partnering with philanthropies will leverage the diversity of American donors to identify a portfolio of research organizations with diverse constraints (and therefore the potential to create outlier outcomes). To have a significant impact, this pilot funding opportunity should be funded at $100 million per year for 10 years.

Second, drawing on the ideas of Kanjun Qiu and Michael Nielsen, the NSF should set aside an additional $100 million per year to sponsor independent research organizations with impressive track records for extended periods of time. This commitment to “acquire” successful organizations will complement Part One’s research-funding opportunity in two ways. First, it will encourage philanthropic participation by making philanthropies feel like their money is going towardssomething that won’t die the moment they stop funding it. Additionally, it will enable the federal government to leverage the institutional knowledge created by successful experiments in research funding and management.

If successful, this two-part program can be later replicated by other federal agencies. The Administration and Congress should prioritize funding this program in recognition of three converging facts: one, that federal spending on research and development (R&D) is increasing; two, that the American innovation ecosystem is not working as well as it once did; and three, that the proliferation of new institutional structures for managing research (e.g., Focused Research Organizations, private Advanced Research Projects Agencies (ARPAs), “science angels”, etc. Swift action could use the increased budgets to empower new organizations to experiment with new ways of organizing R&D in order to address the current system’s sclerosis!

Challenge and Opportunity

There is a growing consensus that there is a gap between the speed and efficiency of R&D projects closely managed by the government and R&D projects managed by the private sector. 

Federal funding is a major part of the American R&D ecosystem. However, most federal research funding comes with a litany of constraints: earmarks that prevent researchers from spending grant money on things they think are most important (like equipment or lab automation), onerous reporting requirements, the need to get every proposal through a committee, and dozens of hours of grant writing for shockingly small amount of money. Moreover, studies have found that with a mandate to fund innovative research, federal funding decisions tend to be risk-averse.

As a result, in situations where there’s a head-to-head comparison between government-managed research and technology development and privately-managed counterparts, there’s little question which is more efficient.

This efficiency gap exists largely because privately-managed organizations often push control over research funds to the organization or level where the “research design” occurs. This yields powerful results. Former Defense Advanced Research Projects Agency director Arati Prabhakar argues that this mechanism, in the form of empowering program managers, is a big part of why the ARPA model works. In the business world, coupling power (money) and responsibility (research design) is simply common sense. In the research world, the benefits of “embedded autonomy” are straightforward. Autonomy enables an organization or individual to react quickly to unexpected circumstances. Research is highly uncertain by nature. Coupling embedded autonomy with research design means that funding will be spent in the most useful way possible at a given moment based on knowledge gained as experimentation progresses — not in the way that a researcher thought would be most useful at the time they submitted their grant proposal.

Recognizing the power of embedded autonomy to enable powerful, diverse research, there is currently an explosion of experiments in non-academic research organizations. Many are too new to have clear results, but non-academic research organizations — including HHMI Janelia, Dynamicland, Willow Garage, and early SpaceX — have created new fields, won Nobel prizes, and changed the paradigms of entire industries. But even the most successful research organizations struggle to raise money unless there is a clear business case, which leaves public-goods oriented research in the lurch. Philanthropists are strongly motivated by legacy, so they want to fund things that will last. As a result, Private funders often hesitate to fund research organizations that produce public-good R&D.

Understanding this problem suggests a potent new way of deploying the federal government’s R&D budget: partnering with philanthropists to build a diverse portfolio of research organizations with autonomy over their own budgets, and then providing long-term support to the most effective of those organizations.

In other words, the federal government should experiment with funding organizations rather than projects.

Such an approach would position the federal government to act like a limited partner (LP) in multiple venture capital funds. In this capacity, the federal government would avoid setting overly specific requirements around how a particular grant is spent. The government would instead set very high-level priorities (e.g., “create new manufacturing paradigms” or simply “do impactful research”), give funded organizations the autonomy to figure out how to best achieve this goal, and then evaluate success after the fact.

The time is right to invest in creative federal research-funding approaches. There is bipartisan support for large increases to federally funded R&D. But pushing huge amounts of money through outdated R&D funding structures is like slamming on the accelerator of a car that needs an engine repair: incredibly inefficient and with the potential to backfire. By contrast, embedding autonomy in a diverse portfolio of organizations could unlock the sort of unexpected, game-changing inventions and discoveries that have driven the American economy: electricity, airplanes, the internet, the transistor, cryptography, and more.

Plan of Action

The current Administration should launch a two-part program at NSF to test a research-funding system that prioritizes organizations over projects.

As Part One of this program, the NSF’s TIP Directorate should pilot a research-funding opportunity in which philanthropically matched grants fund a portfolio of independent research organizations instead of funding specific research initiatives. This pilot funding opportunity should be funded at $100 million per year for 10 years. The Directorate should target funding between 5 and 15 organizations this way, quadratically matching philanthropic funds at values between 100% and 1000% depending on the number of participating philanthropic donors.

As Part Two of this program, NSF should set aside an additional $100 million per year to sponsor independent research organizations with impressive track records for extended periods of time. The Directorate should set a goal of identifying two organizations during the ten-year pilot that would be good candidates for this long-term funding, funding each at $50 million per year.

More detail on each of these program components is provided below.

Part One: Philanthropically matched grants

Partnering with private donors is key to the success of the proposed organization-focused funding opportunity. By funding only organizations that have already raised philanthropic dollars, the federal government will leverage philanthropists’ due diligence on screening applicants to ensure high-potential awardees. Similarly, the funding opportunity should employ quadratic matching funding to use donors’ confidence as an indicator of how much money to give each organization and to reduce bias favoring organizations that are able to raise a large amount of money from a small number of donors. 

Leveraging philanthropic opinion in this way does come with the risk of biasing awards towards organizations working on particularly popular areas or that are particularly good at sales or marketing. The organization-focused funding opportunity could address this risk by establishing a parallel funding pathway whereby a large number of researchers can file a petition for an organization to be selected for funding.

The TIP Directorate obviously must impose additional criteria beyond the endorsements of the philanthropic and research communities. It will be tempting for the Directorate to prioritize funding organizations working on specific, high-interest technology areas or themes. But the goal of this program is to advance the long term health of the American innovation ecosystem. Often, tomorrow’s high-priority area is one that doesn’t even exist today. To that end, the Directorate should evaluate potential grantee organizations on their “counterfactual impact”: i.e., their capacity to do work that is disincentivized in other institutional structures. 

The question of how best to evaluate success of the funding opportunity is a challenging one. It is notoriously hard to evaluate long-term research output. The whole point of this proposal is to move away from short-term metrics and rigid plans, but at the same time the government needs to be responsible to taxpayers. Metrics are the most straightforward way to evaluate outcomes. However, metrics are potentially counterproductive ways to evaluate new and experimental processes because existing metrics presume a specific way of organizing research. We therefore recommend that the TIP Directorate create a Notice of Funding Opportunity to hire an independent, nonpartisan, and nonprofit board whose job is to holistically evaluate funded organizations. The board should include people working in academia, industrial research, government research, and independent research organizations, as well as some “wildcards”. The board should collectively have deep experience performing and guiding high-uncertainty, long-term research and development.

The board would regularly (but not over-frequently) solicit opinions on output and impacts of funded organizations from the program’s philanthropic partners, members of the government, people working with the organizations, unaffiliated researchers, and members of the organizations themselves. At the end of each year, the board should give each organization an evaluation “report card” containing a holistic letter grade and an explanation for that grade. Organizations that receive an F should immediately be expelled from the funding program, as should organizations that receive a D for three years in a row.

Part Two: Invest deeply in demonstrated success

Kanjun Qiu and Michael Nielsen have proposed an important piece of the puzzle: In the same way that governments took over funding libraries once they were started by Gilded Age philanthropists, the government should take over funding immensely successful research organizations today.

At the five-year midpoint and ten-year endpoint of the pilot funding program, the evaluation board should identify any funded organizations that have produced outstanding output. The TIP Directorate should then select up to two of these candidates to receive indefinite government support, at a funding level of $50 million per organization per year. These indefinitely funded organizations would become a line item in the TIP’s budget, to be renewed every year except in extreme circumstances. The possibility of indefinite federal support as an “exit strategy” for philanthropic funders will encourage participation of additional philanthropic partners by providing (i) philanthropically funded organizations a pathway for becoming self-sustaining, and (ii) philanthropies with a clear opportunity to establish a legacy.  

What qualifies as “outstanding output”? Like evaluating success, it’s a challenging question. We recommend using the same board-based grading scheme outlined above. Any organization that receives an A grade in two of the past five years or an A+ in any one of the past five years should be eligible for indefinite support. This approach will require grading to be very strict: for instance, an A+ should only be given to an organization that enables Nobel-prize-quality work.

Conclusion

Building portfolios of independent research organizations is an incredibly effective way of spending government research money. The total federal research budget is almost $160 billion per year. Less than 1% of that could make a massive difference for independent research organizations, most of which have budgets in the $10 million range. Funding especially promising independent research organizations with an additional $10 million or more per year would have a huge effect, empowering organizations that are already doing outstanding work to take their contributions to the next level. 

Even the highest-performing private research organizations in the world — like Google DeepMind and HHMI Janelia Farm — have budgets in the range of $200 million per year. Sponsoring a select number of especially high-performing research organizations with an additional $100 million per year would hence have similarly transformative impacts. These large indefinite grants would also provide the major incentives needed to bring the world’s leading philanthropies to the table and to encourage the most cutting-edge independent research organizations to dedicate their talents to the public sector. The sum total of achieving these outcomes would still account for only a tiny fraction of the overall federal R&D budget.

Finally, we emphasize that the goal of this pilot program is not solely to establish an independent research organization portfolio in the TIP Directorate. It is also an opportunity to test a novel research-funding mechanism that could be replicated at numerous other federal agencies.

Creating Advanced Market Commitments and Prizes for Pandemic Preparedness

Summary

As part of its American Pandemic Preparedness plan, the Biden Administration should establish an interagency working group (IWG) focused exclusively on the design, funding, and implementation of advance market commitments (AMCs) and prizes for vaccine development. Under an AMC, pharmaceutical companies commit to providing many vaccine doses at a fixed price in return for a per-dose federal subsidy. Prizes can support AMCs by rewarding companies for meeting intermediate technical goals.

The IWG would immediately convene experts to identify suitable targets for ambitious vaccine-development and deployment efforts. The group would then work with stakeholders to implement AMCs and prizes crafted around these targets, offering a concrete and durable demonstration of the Administration’s commitment to proactive pandemic preparedness. As the American Pandemic Preparedness plan argues, an important part of rapid vaccine deployment is maintaining “hot manufacturing capacity”. Clear federal AMCs would create the market incentive needed to sustain such capacity, while simultaneously advancing procurement expertise within the federal government, in line with recent recommendations from a government review on the US supply chain. 

Challenge and Opportunity

Vaccines are very cost-effective medical interventions that have played a large role in reducing pathogen-induced deaths over the last 200 years. But vaccines do not yet exist for many diseases, including diseases concentrated in the developing world. Vaccines are undersupplied relative to their social benefit because their target populations are often poor and because strong political pressure for lower prices leads to low expected profits. When new vaccines are approved, scaling up production to fully supply low and middle-income countries (LMICs) can take up to 15 years. AMCs solve these issues by incentivizing vaccine development and hastening production scale-up. Prizes play an intermediate role by offering rewards for meeting technical goals along the way.


Vaccine AMCs have a track record of success. In 2007, GAVI, a public-private global health partnership based out of Geneva, launched an AMC for a pneumococcal conjugate vaccine (PCV) that covered pneumococcal strains more common in the developing world. The partnership received its first supply offers in 2009 (a fairly rapid response enabled by the fact that some PCV candidates were already in late-stage clinical trials). Compared to the rotavirus vaccine — which was developed around the same time but did not receive an AMC — PCVs achieved 3–4x greater coverage (defined as the fully vaccinated fraction of the target population). Moreover, new vaccines typically take about 10–15 years to become widely available in LMICs. PCV became available in those countries within a year. This example demonstrates the capacity of AMCs to incentivize rapid scaling. More recently, the United States (through Operation Warp Speed) and several other countries and organizations purchased substantial COVID-19 vaccine doses far in advance of approval, albeit using a more flexible AMC model that prioritized scaling production before data from clinical trials were available.

Plan of Action

To build on the progress and demonstrated success outlined above, the Biden Administration should invest in AMCs and prizes for vaccine development and deployment as part of its American Pandemic Preparedness plan. Below, we detail three specific recommendations for moving forward.

Recommendation 1. Form an Interagency Working Group (IWG) on Rapid Vaccine Innovation

Roles and responsibilities

Vaccine development and manufacturing is a multi-stage process that is too complicated for any single federal agency to manage. The Biden Administration should issue an Executive Order establishing an IWG on Rapid Vaccine Innovation.

Under emergency circumstances, the IWG would be the government hub for time-sensitive vaccine-procurement efforts. Under normal (non-pandemic) circumstances the IWG would focus on extant communicable diseases with a high disease burden and on potential future threats. This latter function would be carried out as follows.

1. Vaccine targeting. A “horizon scanning” IWG subgroup would identify priority targets for rapid vaccine development and broad deployment. The subgroup would consider factors such as pandemic potential, current disease burden, and vaccine tractability. The IWG would also consult with scientists at the VRC (whose work was essential to the rapid development of COVID-19 vaccines, and who already focus on viruses with pandemic potential) and at the CDC (which already performs pathogen surveillance) in making its determinations. Options for initial vaccine targets could include:

2. Incentive design. Once one or more vaccine targets are identified, an IWG subgroup comprising health economists and budget officers would design the AMC(s) and intermediate prizes intended to spur development and deployment of the target(s). Incentive design would (i) be carried out with substantial input from BARDA, which is familiar with the vaccine-manufacturing landscape, and (ii) consider both the technological distance of the target and market competitiveness. An output from this step would be a Vaccine Incentive Roadmap describing the different prizes and incentives that federal agencies will offer to ensure fast, consistent progress towards development and deployment of the target(s) in question. In other words, the linked prizes included in the roadmap will produce sustained incentives for continued forward progress on vaccine development. More information on this roadmap is provided below.

Structure and participation

The IWG should be structured as an integration, with each participating agency providing specific expertise on each aspect of the IWG’s charge. Participants should include senior leaders from the Biomedical Advanced Research and Development Authority (BARDA), the Centers for Disease Control and Prevention (CDC), the Department of Defense (DOD), the Food and Drug Administration (FDA), the U.S. Agency for International Development (USAID), US International Development Finance Corporation (DFC), and the Vaccine Research Center (VRC). BARDA has a track record of successful procurement of vaccines and expertise in negotiating with manufacturers. VRC’s founding mission is vaccine development and it has collaborated with manufacturers on large-scale production for multiple vaccines. They would provide expertise on vaccine tractability. Through upfront guidance on minimum efficacy requirements, the FDA will ensure vaccine standards. FDA will also work with global regulators on the possibility of regulatory reciprocity, akin to their PEPFAR program, which assists low-resource regulators in low and middle-income countries with decision-making.

The IWG should be chaired by a biosecurity expert housed at the White House Office of Science and Technology Policy (OSTP). 

Congressional notification

The IWGs recommendations (regarding both targets and AMC/prize design), once finalized, would be submitted to the Senate Health and House Ways and Means Subcommittee to request funding. Because federal agencies must notify Congress if they plan to disburse large prize sums (with agency-specific thresholds), this submittal would also serve as the required formal notification to Congress of prize amounts. 

Recommendation 2. Carry out the IWG’s Vaccine Incentive Roadmap

After the IWG has issued its recommendations on vaccine target(s) and incentive (AMC and prizes) design, implementation must follow. Where implementation support comes from will depend on the “technological distance” of the target(s) in question. 

Early-stage development focused on in-vitro or animal research should be supported with prizes from BARDA, the Department of Health and Human Services (HHS), and NIH. All federal agencies already have the authority to award prizes under the America Competes Act. Initial prizes could be awarded to vaccine candidates that successfully protect an animal model against disease. Later prizes could be awarded to candidates that hit clinical milestones such as completion of a successful Phase 1 trial in humans. We note that while agencies can theoretically pool funds for a multi-stage prize, cumbersome interagency processes mean that it will likely be easier to have separate agencies fund and oversee the separate prizes included in the roadmap. 

Later-stage development should be supported with larger prizes or purchases from USAID and DOD. Once a vaccine candidate has reached early-stage human clinical testing, larger prizes and/or different funding mechanisms will likely be required to advance that candidate to later-stage human testing. This is because costs of moving a vaccine candidate from the preclinical stage to the end of phase 2A (early-stage human clinical testing) range from $14 to $159 million dollars.

It is unlikely that a single federal agency would have the discretionary funds or willingness to sponsor a prize sufficient to incentivize participation in this process. Federal partnerships with private-sector entities and/or philanthropies could supplement federal prize funding. The promise of being a government-approved vendor of a vaccine or a DOD-supported prototype would serve as incentive for external entities to enter into such partnerships. USAID could also leverage its relationships with global health stakeholders and funders to provide incentive funding. Of course, external funding partnerships would be unnecessary if Congress appropriated sufficient designated funding for large vaccine-incentive prizes to relevant agencies.

An alternative to prize funding that would be appropriate for incentivizing later-stage R&D is use of the DOD’s Defense Commercial Solutions Opening (CSO) purchasing authority. DOD could use its CSO authority to pre-purchase vaccine doses in large quantities, effectively creating an AMC. Purchases of up to $100 million can be made through CSO authority. Early prize negotiations would use the leverage provided by becoming a government-approved vendor of vaccines (part of the CSO process) to negotiate for fair prices.  A second DOD purchase authority that could be used as an AMC-like incentive is the Other Transaction Authority (OTA), which exempts the DOD from some federal procurement regulations. OTA authority could likely be used to support vaccine research, purchase vaccine prototypes, and pay for some manufacturing of a successful prototype. OTA has also been used to fund research consortia, a possible alternative to a multi-stage prize roadmap. Purchases of up to $20 million can be made through OTA authority. In the context of diseases that affect low and middle income countries, a loan from the US International Development Finance Corporation (DFC) may be an option for supplementing an AMC.

Recommendation 3. Permanently expand BARDA’s mandate to include all communicable diseases, expand BARDA’s funding, and make BARDA the IWG’s permanent home

An IWG is a powerful tool for bringing federal agencies together. With existing prize authority and an administration that prioritizes vaccine development and deployment, much could be accomplished through only the steps outlined above. However, achieving truly transformative results requires a permanent and sustainably funded federal agency to be working consistently on advancing vaccines. Otherwise, future administrations may cancel ongoing IWG projects and/or fail to follow through. As the part of the federal government with the most expertise in therapeutics procurement, BARDA is an ideal permanent home for the IWG’s functions. 

BARDA’s mandate is currently limited to biological, chemical, or radiological threats to the health of Americans. This mandate should be expanded to include all important communicable diseases. The newly empowered BARDA would manage public-private partnerships for vaccine procurement, while  the NIH would remain the fundamental health-research arm of the U.S. government. Expanding BARDA’s mandate would require Congressional action. Congress would need to amend the Pandemic and All-Hazards Preparedness and Advancing Innovation Act appropriately, and would also need to appropriate specific funding for BARDA to carry out the roles and responsibilities of the IWG over the long term.

Frequently Asked Questions
What if we give pharmaceutical companies a bunch of taxpayer money to develop vaccine targets and they fail?

Prizes and AMCs only pay out when a product that meets pre-specified requirements is approved, so taxpayers won’t pay for any failures.

Tell me more about AMC design. What changes if a vaccine candidate is in the early-stage as opposed to the later-stage?

For technologically “close” vaccine targets with a high chance of imminent Phase 3 trial success, an AMC incentivizes rapid scale-up of manufacturing and ensures that more doses reach more people sooner. The AMC does this by circumventing a type of “hold-up” problem wherein purchasers negotiate vaccine prices down to per-unit costs. The 2007 GAVI Pneumococcus AMC was of this type. A GAS or malaria vaccine would similarly be “close” targets.


For more technologically distant targets, AMCs should incorporate “kill switches” that give future customers of the vaccine an effective veto over the AMC by way of not paying co-payments. This feature is designed to be a final check on the utility of a vaccine and avoids the difficulty of specifying standards for a vaccine many years ahead of time. An AMC structured in this way works well if a company manufactures a vaccine that meets pre-specified technical details but for hard-to-predict reasons is not useful.


For an especially distant target, a series of prize competitions could substitute for a traditional AMC. In this scenario, an initial prize could be awarded for any vaccine candidates that successfully protect an animal model against disease. A later prize could be awarded to candidates that hit clinical milestones such as completion of a Phase 1 trial in humans.


Other details of AMC and/or prize implementation depend on the market structure and cannot be determined ahead of time. For instance, the optimal AMC design is very different in monopoly versus competitive markets.

Why does this memo you propose a complicated multi-stage prize process instead of something simple like Operation Warp Speed?

Operation Warp Speed spent about $12 billion dollars on COVID-19 vaccine development and purchased hundreds of millions of vaccine doses far in advance of approval or clinical trials. While this was very effective, it is unlikely that Congress would be willing to appropriate such a large sum of money — or see that money disbursed so freely — in non-pandemic situations. A multi-stage prize process still incentivizes vaccine development and deployment but does so for a lower cost.

How can the federal government carry out these recommendations without provoking anti-vax sentiment?

The government could fund research into market segmentation for vaccines, since many who are vaccine-hesitant are avid consumers of alternative health products/supplements. There may be marketing and promotional strategies inspired by “natural” supplements that can increase vaccine uptake.

Doesn’t the federal government already fund influenza vaccine preparation? Why do we need a universal flu vaccine?

The federal government does fund influenza vaccine preparation, but that funding is only for a seasonal flu vaccine that works with 40–60% efficacy: a rate that is well below what other vaccines, such as the measles (97%) and mumps vaccines (88%) achieve. A pandemic influenza with an unexpected genetic background could still catch us by surprise. Investing in a universal influenza vaccine is essential in preparing for that eventuality.

What are the most likely points of failure for the steps outlined in this memo?

One issue is staffing. Drafting a high-quality AMC contract may require legal and economic expertise that isn’t available in-house at federal agencies, so the administration may need to engage external AMC experts. Another issue may be ensuring that activities outlined herein do not fall between interagency “cracks”. Assigning dedicated staff to oversee each activity will be important. A third issue is the potential for interagency friction. The more agencies that are involved with prize design, the longer it may take to design and authorize a given prize. One possible solution is to have only one agency administer each prize, with informal input from staff in other agencies when required.