Financing A Clean Energy Renaissance

In clean energy, countries get what they pay for. If the United States won't invest in cleaner manufacturing [1], other countries will, and their workers will benefit from being able to supply their markets and others. As Jerome a Paris noted in a recent article, the US has almost destroyed its wind industry three times [2] when Congress let the production tax credit expire, sending both the manufacturing jobs and financing know-how overseas.

By contrast, China is so committed to their industrial strategy that they're willing to annoy the whole world with an arbitrary currency peg [3] in order to ensure a market that will keep their citizens employed. Their determination has lifted 250 million people out of poverty in the last 30 years [4], so they must be doing something we could learn from, even if we might not want to imitate their currency practices. Though as Pennsylvania Gov. Ed Rendell said recently, there are ways in which we should take a look at imitating China, where they're spending around 10 percent of their GDP on infrastructure projects.

Or we could look to Germany, with its high wages and strong currency. They've kept their exports high and have taken a leading role in global solar power production in spite of not being overly burdened with sunshine. Their approach is different from China's, but they've also refused to leave the success of their domestic industries to chance.

How does the US get its government to a place where it's as committed as other countries are to creating good opportunities for its workers in expanding sectors like clean energy? Before considering that, take a look if you hadn't clicked over to Jerome's article, for a wake up call on what happens without a stable investment climate for fossil fuel alternatives:

Sen. Sherrod Brown joined the Blue Green Alliance last week to highlight their report on the potential for new clean energy jobs in the US (pdf) [5] with a consistent renewable energy standard, such as the one supplied by Brown's IMPACT Act [6], which has already been included in the House version of the new clean energy legislation.

Sen. Brown said there was as much "need to help communities recover from massive job loss" as there was to help them recover from natural disasters. Also, that the US was the only country in the world that still runs its economic policy "from a textbook that's 20 years out of date" and that we needed to start acting in our national interests.

Part of that will come by creating new opportunities for the devastated auto supply chain, Brown said, that altogether are among the country's largest employers. He said it was important to help businesses like theirs retool their facilities [7] so that in addition to gearboxes for trucks, they could make gearboxes for windmills, or glass for solar panels as well as windshields.

And the clean energy investments Brown proposes would be well leveraged. Also highlighted in the call by David Foster, executive director of the Blue Green Alliance was a report by the Center for American Progress on the economic benefits of different energy investments [8], conducted at the height of the oil boom, which concluded that three times as many jobs could be created in clean energy sectors for an equivalent investment in fossil energy.

Sounds like a win, particularly in regions whose manufacturing jobs have been hard hit and are already seeing increases in alternative energy production, such as Brown's Ohio. As Jerome says, and as the Blue Green report supports, the main obstacle to benefitting from this opportunity is more what the US government and finance sector has failed to do, and less what other countries are doing. Until it becomes acceptable to look out for domestic industry again, other countries' producers will have to make up for shortfalls in our production, and overseas financing will have to provide backing for domestic clean energy job creation.

There's no substitute for the sort of robust industrial strategy that competing countries have and not even a solution to China's currency fixing will make up for its absence.