The Washington Clean Energy Conundrum

Clean technologies will likely be the next big economic success story. If we want the industry's hub to be in the U.S., not elsewhere, then there is a clear, financially prudent role for government to play during this stage of the industry's development. There are three basic policy principles that will help provide necessary support to this growing sector of the economy, and that both Democrats and Republican leaders should be comfortable supporting:

Government should adopt performance standards, rather than subsidies and direct investments, to spur demand for and encourage innovation in clean technologies Government should craft smarter subsidy programs and tax policies that encourage private...