Earlier this week, the day after President-Elect Obama’s historic election, I had the opportunity to participate in a panel discussing "What’s next for the green economy?" hosted by the Eco Investment Club. "What’s next?" seems to be the question on everybody’s mind as we all work to understand what this election means for the direction of our country, our economy, and our own individual lives in these challenging times.
In addition to myself, the panelists included Scott Anderson (founder of the Green Skeptic), Oren Jaffe (co-founder of EcoTuesday), Jan Schalkwijk (CFA & Principal of JPS Global Investments), and Dave Iverson (Economist and Environmentalist). rior to the meeting, attendees had the opportunity to post questions about a variety of issues, and the questions revealed the anxiety people have about the economy and it’s impact on green businesses:
"Will consumers stick with Green during tough times?"
"Is investment in renewable energy too risky right now because of low oil prices?"
"Does carbon regulation (tackling climate change) cause real job creation?"
Obama has a lot on his plate, but the future health of our environment is one of the priorities he has repeatedly affirmed, including it in his speech last night. I believe that like many people he sees that dealing with these environmental issues is both a challenge and an opportunity for our nation and for businesses that lead the way.
He has stated his commitment to tackling climate change through a cap and trade system, and to establishing a national renewable energy portfolio standard. He has reaffirmed the opportunities that can be found for millions of green collar jobs providing renewable energy and energy efficient buildings. These are not easy issues, and will require a lot of work to bring to fruition, but I believe he means what he says.
Smart policy on the part of the new administration can drive the economy in the right direction, helping green businesses, the broader economy, and the environment. Environmentalists have been telling Americans for decades to drive smaller cars, with little success when oil was cheap. As soon as gas hit $4.50 a gallon, there were, for a time at least, millions of new environmentalists driving less and buying smaller cars.
By putting a price on carbon, we create the right incentives to shift the economy away from coal and other fossil fuels and toward renewable energy. It may not be easy, but it can be done, and has been done by others. Europe and Japan did not abandon fuel efficiency when oil was cheap, and as a result they are today way ahead of the US, with much more energy efficient economies. What happens to oil in the short term is hard or impossible to predict, but the long term trend is absolutely predictable. If we are in this game for the long term, then renewable energy is the way to go. The US needs consistent government policy that thinks of the long term impact on people and planet, as well as the economy.
Some feel that action on climate change is an expensive proposition and is unnecessary or not worth it, but taking action on climate change is one of the biggest business opportunities of our time. What if our businesses are developing new technologies for cheap renewable energy and low carbon living, and selling this to everyone else? Leaving things as they are, depleting natural capital and destroying ecosystem services, puts an unimaginable burden on future generations, an incalculably high cost down the road, far greater than the investment that we can make today to make it happen. If we take action and become leaders, the world will beat a path to our door, creating jobs, companies, etc.
Environmental issues like tackling climate change and providing clean energy are not the only challenges on Obama’s plate, and these problems will not be solved overnight. He will not solve these on his own. With his leadership, and the help and support of the people, we can face these issues together to create a healthy and green economy.