Green Labor Journal - Working for a Substainable Future

Clean Technology: The Next Economic Boom?

"Cleantech" emerging as the new road to American prosperity

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Clean Technology: The Next Economic Boom?
By Jerry Brown
“Cleantech” emerging as new road to American prosperity


If energy independence is the new “red, white and blue,” then clean, green technology is being touted as the “economy’s next boom.”  With billions pouring into clean energy, some investors see parallels with the early days of the Internet, which helped generate some five million new jobs between 1992 – 2000, under President Bill Clinton and Vice President Al Gore.

Speaking on alternative energy initiatives in early 2009, former President Clinton claimed that “Alternative energy would spark the largest job boom we’ve had since World War II ─ and we wouldn’t have to shoot anyone to do it!”

Clinton’s comments are echoed in President Barack Obama’s commitment to “invest $150 billion over the next ten years in energy research and development to transition to a clean energy economy,” creating the “next generation of energy technologies.”

Obviously, “clean technologies” and “green jobs” are popular buzzwords.  But, this early on, how do we know if clean tech is really the next big boom, or merely a fad that will fade when “green” is no longer chic?

Venture Capitalists Invest Billions

To begin with, one of the clearest signs of a potential economic boom is that investment money continues to pour into “start-up” companies.

According to the Cleantech Group Inc., despite the credit crisis and broadening recession, in 2008 clean technology venture investment reached a record $8.4 billion in North America, Europe, Israel, China and India.

This represents a 38% increase from $6.1 billion in 2007 and “represents the seventh straight year of growth in venture investing, widely recognized as a leading indicator of overall investment patterns.”

“In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies.  Now more than ever, clean technologies represent the biggest opportunities for job and wealth creation,” notes Nicholas Parker, Executive Chairman, Cleantech Group.

The top clean technology venture investment sectors were solar, biofuels, transporation and wind.  Other significant sectors included smart grid companies, small-scale wind turbines, plastics recycling, green buildings and agricultural technologies.

With solar receiving almost 40% of clean technology investment, the top three capital rounds in 2008 all went to U.S. thin-film solar companies, NanoSolar ($300 million), Solyndra ($219 million) and SoloPower ($200 million).

If we include all capital sources (venture plus equity, debt, IPOs, etc.), in 2006, the United States accounted for $22.5 billion of the $70.9 billion invested worldwide in clean energy companies.

Obama’s $80 Billion Down Payment
Soon after his inauguration, President Obama identified oil independence, climate change legislation and clean technology development as key components of his energy agenda, and linked them all to domestic job creation.

“We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for lasting prosperity,” he said in March 2009, shortly after signing the American Recovery and Reinvestment Act (ARRA).  The Act made an $80 billion down payment in grants, loans and loan guarantees for high-tech research and commercialization of renewable energy, including the following:
•    $11 billion for a bigger, better, and smarter grid that will move renewable energy from the rural places it is produced to the cities where it is mostly used, as well as for 40 million smart meters to be deployed in American homes
•    $5 billion for low-income home weatherization projects
•    $4.5 billion to green federal buildings and cut our energy bill, saving taxpayers billions of dollars
•    $6.3 billion for state and local renewable energy and energy efficiency efforts
•    $600 million in green job training programs – $100 million to expand line worker training programs and $500 million for green workforce training
•    $2 billion in competitive grants to develop the next generation of batteries to store energy (see Green Labor Journal article on “Advanced Batteries,” Oct. 30, 2009)

States and Cities Support Clean Technology
In addition to these unprecedented federal initiatives, state and big city governments are jumping on board the clean tech bandwagon, offering tax incentives to green companies and passing legislation to reduce greenhouse gases and increase renewable energy.

Twenty-six states, representing nearly 70% of the U.S. population have already enacted Renewable Portfolio Standards.  These are market-driven policies that require utilities to purchase up to 30% of their electricity from renewable sources within ten years.  

Local governments are also supporting clean technology, through new initiatives, such as Philadelphia’s “Greenworks” Project. Greenworks pledges to double the number of clean tech jobs, weatherize 15% of all urban dwellings, and keep 70% of the city’s solid waste materials out of landfills – all by 2015.  

In Chicago, Mayor Richard M. Daley has identified more than $1 billion in city projects in the areas of education, infrastructure, job creation and training, housing, energy efficiency and public safety that are likely to be funded under the Stimulus Plan.

According to Emily Mendell of the Venture Capital Association, “You have kind of a perfect storm where you see technology at the point where it can actually be commercialized and the government recognizing the need…you have consumers who are ready to embrace the technology. All these things are contributing to an interest in investment."  

As a result, government, labor, business and technological innovation are coming together to lay the foundation for a potential long-term boom in clean technology industries.

Cleantech and American Jobs
So, how will this emerging clean technology boom affect American jobs?

Granting incentives, such as the ARRA’s 30% tax credit for domestic advanced-energy technologies, could keep these manufacturing jobs in America, and even attract overseas firms to relocate here.  This ARRA tax credit levels the playing field and makes U.S. manufacturers cost competitive with India.

According to Jeannine Sargent of Oerlikon Solar, tax credits make all the difference.  This Swiss firm wants to build some of its thin-film solar machines in the U.S., but will need incentives to do so.  
    
The next few years will be critical to revitalizing the United States as a major manufacturing base for clean technologies. Hopefully, we will fulfill President Obama’s promise to “make the investments that would allow us to become the world’s leading exporter of renewable energy.”

If we make the right choices, entrepreneurs, workers and consumers will all benefit as clean technology paves a new road to prosperity.