Green Jobs: Environmental Fantasy or Tomorrow's Common Reality? Part 3

Why a green revolution in America depends on money, money, money—and how government and private investors could be the key to bringing the vision of widespread green-collar opportunities to fruition

Author’s Note: In this five-part series, I explore the forces that will determine whether or not the promise of millions of green jobs in America can ever be fulfilled. Will careers in energy efficiency, environmental technology and clean, renewable energy—such as wind and solar power—become mainstream in the United States? As with so many issues, the answer can probably be found somewhere between the extremes. Read Part 1 here.

Taking action for a cleaner environment is noble, but it is rarely the main reason that big green projects actually end up being undertaken. This world is currently ruled by the financial bottom line. So when something has as much potential as clean energy technology to positively transform whole nations at the economic level, it’s only natural that a lot of money—both private and public—would get thrown in its direction. It’s also understandable that some politicians would want to capitalize on the situation and demonstrate to the public that they support such visionary, if costly, endeavors.

Renewable energy has tremendous upside. That’s why, with the dire impacts of the latest recession still fresh in early 2009, many progressive leaders began aggressively touting the idea of environmentally friendly projects and green jobs as a good—some believed quick—way out of America’s economic doldrums. It’s a notion that received a great amount of hype and media attention. So when Congress passed a new stimulus measure that year, about $92 billion of the legislated funds were allocated for clean technology and energy efficiency projects in the United States with the hope that hundreds of thousands of new green jobs would be created.

Most of that $92 billion is yet to be dispersed. And, according to recent estimates from the U.S. Department of Energy, only about 82,000 jobs have been created from the green funding that has been doled out so far.

Still, with the rest of the stimulus funds yet to be distributed, there will be more green jobs to come. It would be foolish, though, for those involved in the clean technology sector to count on a steady stream of public financing given the present atmosphere of Washington, D.C. (Politicians can be more wishy-washy than a three-headed gerbil on miniaturized roller skates circling a bathtub drain while trying to balance a thimble of baby oil.)

“I believe that the federal government can play a significant role in determining how fast this market grows—via loan guarantee programs, tax credits, direct investment, and the like,” says Jeannette Wicks-Lim, an economist at the Political Economy Research Institute at the University of Massachusetts, Amherst. “This, however, is the least predictable factor.”

While the U.S. federal government mires itself in petty partisan politics, some state governments are quietly doing a much better job. State-level initiatives and targeted investments are putting federal efforts to shame. But that is often the case. It frequently takes individual states to begin a trend, making changes at the federal level less risky for the fickle politicians that ultimately have to vote on legislation that can set things in motion nationwide.

“U.S. states like Massachusetts, California, Oregon and others are aggressively pursuing the build-out of their clean energy infrastructures and the jobs that come with them,” says Ron Pernick, co-founder and managing director of Clean Edge, Inc., a research and advisory firm dedicated to the clean technology sector. “They are shifting policies and regulatory frameworks, and that is attracting capital and a whole bunch of other things.”

Public investment and “green-friendly” legislation is a great lure for private capital. By some estimates, every dollar of public money invested attracts three dollars from the private sector. Big innovations and visionary projects often require hefty private investment to reach large scale. Renewable energy is no exception. According to Clean Edge, the clean technology sector currently receives nearly as much venture capital money as investor-happy sectors like biotechnology, software and health technology.

Total global investments—both public and private—in the clean technology sector show a strong commitment to developing a green infrastructure. According to Bloomberg New Energy Finance, annual investment in the clean-tech sector jumped from $46 billion in 2004 to $173 billion in 2008. And even with a severe recession, that investment only declined by seven percent globally in 2009.

That’s a lot of money. Some economists, though, believe that the United States’ portion of those clean technology investments should be bigger. Private investors want to know that America is truly committed to developing its renewable energy sector, and they want to see concrete actions in the form of favorable public policy measures and greater, steadier federal investment. Unfortunately, divisive politics slows down progress in this area.

However, a recent white paper authored by scholars from across the political spectrum—members of the American Enterprise Institute, the Brookings Institute and the Breakthrough Institute—has made many people connected to clean technology sit up and take notice. Although not perfect, the report lays out solid reasons for public investment in clean energy and offers a path forward that—assuming a little sanity can be restored in Washington, D.C.—both Republicans and Democrats should be able get behind. At the very least, it provides additional hope that good public policy at the national level is capable of generating the massive tide of green employment in America that so many have promised.

Titled Post-Partisan Power: How a Limited and Direct Approach to Energy Innovation Can Deliver Clean, Cheap Energy, Economic Productivity and National Prosperity, the white paper states:

Just as federal investment has driven innovation in countless industries over the last century, so too will federal investment in energy technology be central to catalyzing private sector innovation and entrepreneurship in the 21st century energy sector, creating new industries and jobs.

Post-Partisan Power points to the fact that America’s federal government has a history of investing in research and development (R&D), education and other programs that led to widespread innovation, infrastructure improvements and advancements directly responsible for maintaining the nation’s competitiveness and standard of living. It’s an impressive list of achievements:

• Railroads
• The federal highway system
• Radios
• Nuclear power
• Aerospace technology
• Semiconductors
• Computers
• Software
• The Internet
• Biomedical advancements

Those who say the government can’t pick winners and has no business making investments in still-fledgling sectors clearly haven’t been paying attention. So if America wants to keep that winning streak alive, the federal government will have to find a way to pony up more money for renewable energy development.

If it does, huge waves of private capital are likely to follow, along with new green jobs.

Author’s Note: In Part 4, I look at a few of the biggest forces shaping America’s prospects for a green revolution: global competition, domestic manufacturing and coming mass retirements from the utility sector.