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Forbes: Why Environmental Policies Don't Kill Jobs

President Obama unveiled his jobs proposal last night and among many strong points, he rebuffed the naysayers who disparage the key role that clean technology jobs have in America’s revival.
by Mindy S. LubberForbes Sustainable Capitalism Blog Posted on Sep 09, 2011

President Obama unveiled his jobs proposal last night and among many strong points, he rebuffed the naysayers who disparage the key role that clean technology jobs have in America’s revival.

“If we provide the right incentives and support,” he said, “we can be the ones to build everything from fuel-efficient cars to advanced biofuels to semiconductors that are sold all over the world.”

And he really came out swinging on the need for environmental policies.

“I reject the argument that says for the economy to grow we have to roll back  [regulations]. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards.”

Obama is right on both fronts. Clean policies not only offer necessary protections, they stimulate jobs.

Quite simply, the naysayers are wrong on clean tech potential—and here’s why:

From Scotland to Shanghai to Sao Paolo, the world is moving decisively toward a clean technology conversion and the jobs that come with it for urgent environmental, security and competitiveness reasons.

It’s all about market share: Do we wish to trade our dependence on imported and dirty energy for a new dependence on non-domestic clean technologies? Or would we rather innovate 21st century technologies ourselves and sell them to the world?

Unbiased research is clear:

A Deutsche Bank report in July found that ”countries with more ‘TLC’ – transparency, longevity and certainty – in their climate policy frameworks will attract more investment and build new, clean industries, technologies and jobs faster than their policy-lagging counterparts.” The United States was singled out as a laggard.

• A report by the University of Massachusetts’ Political Economy Research Institute showed that EPA-mandated clean tech upgrades to America’s Eisenhower-era power plant fleet will generate about 290,000 net new domestic jobs a year in each of the next five years.

• Two Citi Investment Research reports showed that boosting automobile fuel economy standards will boost automakers’ variable profits and sales – especially for the Detroit 3 – and also boost US-based suppliers of fuel-savings technologies. In fact, GM is already pushing to export Michigan-made Chevrolet Volt plug-in hybrids to China, the world’s largest auto market, later this year.

• Several recent news accounts (see here and here) point to a lack of clear policy in the U.S. – and its presence elsewhere – as a central reason other countries’ clean tech industries are swiftly eclipsing U.S. firms’ market share. And when American Electric Power this summer abandoned its pioneering effort to capture carbon dioxide from an existing coal-burning power plant, the New York Times reported: “The technology had been heralded as the quickest solution to help the coal industry weather tougher federal limits on greenhouse gas emissions. But Congressional inaction on climate change diminished the incentives that had spurred A.E.P. to take the leap.”

So on these and other clean tech fronts America languishes while other countries sprint ahead. These countries get it: smart policy = business certainty = investment = jobs.

The naysayers’ analysis of clean tech’s potential is consistently and woefully incomplete because it’s often a variation of an inadequate costs-only analysis – some version of, ‘We can’t buy this solar panel because the cost of the coal-fired power it replaces is cheaper.’ That of course ignores the total societal cost of the fossil fuel in question, strong market trends, and the myriad other health, economic and security benefits of going from dirty energy to clean energy. Such incomplete analysis wouldn’t pass muster in a first-year economics class.

Opponents of new environmental technologies and policies have repeatedly been wildly inaccurate in their cost claims. As one of many examples, in 1981 the Business Roundtable estimated that compliance with the Clean Air Act would cost $66 billion annually over six years. In 1990, they estimated further compliance costs at $55 billion annually.  Yet in 1997, EPA reported the actual cost of the CAA compliance over its first 20 years at just $26 billion a year. And that doesn’t count the vastly-larger health and environmental gains.

So let’s stop fiddling while the rest of the world sprints ahead in a competition that will only grow. As any VC will tell you, priming the pump for cutting-edge industries always has its share of failures and busts – let’s not single them out to score political points.

The 21st Century global economy will inevitably be powered by clean tech, and the millions of jobs it spawns elsewhere if not here. It’s past time to get moving on the policies we need to nurture it.

Read the post at Forbes Sustainable Capitalism Blog

Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the president of Ceres and a founding board member of the organization. She also directs Ceres’ Investor Network on Climate Risk (INCR), a group of 100 institutional investors managing nearly $10 trillion in assets focused on the business risks and opportunities of climate change. Mindy regularly speaks about corporate and investor sustainability issues to high-level leaders at the New York Stock Exchange, United Nations, World Economic Forum, Clinton Global Initiative, American Accounting Association, American Bar Association and more than 100 Fortune 500 firms. She has led negotiating teams of investors, NGOs and Fortune 500 company CEOs who have taken far-reaching positions on corporate practices to minimize carbon emissions, water use and other environmental impacts. She has briefed powerful corporate boards, from Nike to American Electric Power, on how climate change affects shareholder value.

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