12/05/2004: "Clean Energy: A Catalyst for Economic Growth"
The relationship between the economy and the environment has long been quite complex and multi-dimensional. At times, it appears to be one of conflict, as interested parties clash over the proper development of economic resources or the best way to improve environmental conditions. On the other hand, a substantial body of evidence suggests that environmental quality contributes to economic growth, particularly among high-tech industries which seek desirable and attractive locations. Similarly, clean air and ample supplies of clean water are vital to public health.
Moreover, the clean energy industries themselves serve as important catalysts for growth. In the decades to come, fossil fuels will become increasingly difficult and expensive to produce. Reliance on imported oil also reduces America’s ability to meet the goal of energy independence. In both absolute and relative terms, the consumption of imported petroleum has grown substantially since the embargo and oil crisis of 1973, thus leaving the US vulnerable to severe economic disruptions resulting from any one of myriad potential dislocations in an increasingly unstable region of the world. As the markets for highly efficient cars, appliances, and building materials develop, it is imperative that the US be at the forefront of both creation and production of these essential items. Given future patterns in demand and supply, any such efforts are unlikely to adversely affect the current domestic energy sector. In fact, as new technologies for extraction and use develop, there will be even more opportunities for domestic production.
There is little doubt that the path to future vitality for the US economy lies in the ability to create, implement, and commercialize new and innovative technologies. Fundamentally, the US has a high value-added, high-wage business complex that can only prosper through the introduction and capture of markets for emerging goods and services. In recent years, many traditional industries have either been eliminated by new discoveries or transferred to low-wage countries.
The coming together of these phenomena in the domestic economy is at once both exhilarating and challenging. It permits remarkable, sustained prosperity, yet requires constant reinvention as the breakthroughs of one decade become the commodities of the next. In such an environment, firms, no matter the breadth and depth of their past achievements, are only as good as their next market entry and can only share in the bounty to the extent they maintain a presence in emerging sectors. The markets for clean energy are anticipated to see exponential growth in the decades to come and represent a vital addition to the American business complex. Additionally, a business climate characterized by outstanding infrastructure, enhanced mobility, and desirable levels of clean air and water is becoming essential to the capacity to provide the resources for growth in other key sectors.
The decade of the 1990s was an era of incredible economic growth and prosperity; the past few years have been more difficult. Although output has grown at a reasonable pace, the job market has lagged. In particular, the manufacturing sector, the traditional export base which has dominated US expansion for over a century, has suffered dramatic declines in employment. While the nation has benefited from technological advances over many decades, newly emerging sectors are being disproportionately captured by other parts of the world.
Stripped to its essentials, the future prosperity of the US is critically dependent upon the capacity to be the leader in the next generation of products and services—and very little else. In an increasingly global and competitive environment, such innovation represents the primary advantage America enjoys in the international marketplace. While the US certainly remains the predominant economy of today, disturbing trends in investment and technology implementation could undermine this position in the future. Merging business and environmental concerns in a productive and mutually beneficial manner is a goal worthy of substantial effort.
The ideal solution involves a spectrum of efforts aimed at both improving environmental conditions and spurring growth in domestic clean-energy industries. Pursuing new development and enhancing the prospects for success among US firms will help ensure a place at the forefront of this nascent field, a position which will both enhance environmental conditions and provide a long-term source of economic stimulus.