Viewpoint

Government Must Act to Stimulate Green Business Projects

Reporter Jessie Scanlon writes that the US risks losing the opportunity to take the lead in the “biggest economic opportunity in a generation” because the nation lacks “an aggressive, sustained federal policy.” The green economy could produce 40 million jobs and $4.5 trillion in annual revenue by 2030 but the US is letting the chance to capture the lion's share of this giant new economy slip away. Scanlon says: “ On its current course, this country could trade oil dependence for reliance on alternative energy products built by other nations already far ahead of it.” The best energy technology will have to be imported. That should not be acceptable.

Private equity cannot do it alone, writes Scanlon. Silicon Valley would not be what it is if not for the publicly-funded Arpanet. It took a huge federal investment to create the foundation that ultimately became the Internet. No private capital would ever have been available to make this happen but once the government got the system to the point where it did become economically viable to invest, then private money took over and drove the system to where it is today.

Similarly, no major transportation method has ever been developed without massive federal support. Risks are just too high and payoffs too far in the future for private investors to transform an industry themselves. When the rules drive private enterprise to emphasize short-term equity value, it is up to the federal government to develop policies that provide short-term returns (like tax breaks) for long term investments. When the risk-to-return ratio is too high for private enterprise to bear alone, it is up to the federal government to invest – in research, in infra - structure, in workforce development, and in other long-term requirements to help offset some of the risk and encourage businesses to invest. Other nations are putting huge public investments into getting out front on renewable, sustainable energy while the US dabbles with minor programs and projects.

States and communities are not waiting for the federal government to act. Scanlon specifically cites Pennsylvania and Governor Ed Rendell for putting the state out ahead of the federal government on the issue of investing in the green economy. Wooing a Spanish wind turbine manufacturer to locate on a 20-acre site that was once home to a US Steel plant, Rendell granted $9.31M in tax credits, grants and loans. The project brings 1,000 jobs to PA.

Government involvement in the economy is always viewed askance by private sector proponents – and with good reason. But without a clear, integrated, aggressive and sustained federal policy in support of the green economy, we may just “laissez-faire” our way to second-class status in this strategic global arena. It is a narrow window of opportunity. And the window may be closing faster than we know.

(Back to top)
Home page