Investing in technology vs. pricing carbon

This quote from a story about a recent report on the challenge of integrating "green" cars into the marketplace contains an important policy lesson:

“While considerable interest exists among governments, media and environmentalists in promoting HEVs and BEVs, consumers will ultimately decide whether these vehicles are commercially successful or not,” said John Humphrey, senior vice president of automotive operations at J.D. Power. “Based on our research of consumer attitudes toward these technologies - and barring significant changes to public policy, including tax incentives and higher fuel economy standards - we don’t anticipate a mass migration to green vehicles in the coming decade.”

In the wake of the failed U.S. Climate Bill, the proponents of increasing government investment in research and development like the Breakthrough Institute have been out in force. One example is the report "Post Partisan Power" released by the Breakthrough Institute and Steven Hayward of the American Enterprise Institute.

Of course, investing in R&D is a fine idea. Unlike others, I'd hesitate to call the proposed R&D policies, particularly those in the Post-Partisan report, a climate policy (try searching the document with the phrases "climate change" or "global warming"). The Breakthrough crowd's central thesis of R&D investment rather than emissions controls has always struck me as a bit of dodge. Spending on R&D is presented as an alternative to carbon pricing, as if the two policies could not or should not or would not act in concert, when in fact, most pricing schemes assume some of the proceed with go to R&D. By presenting R&D investment as an either/or question, the Breakthrough folks make it seems as though proponents of carbon pricing are opponents of R&D. In reality, we find that the R&D may not have the desired effect without some policy instruments to aide the technology transition.