America's Green Policy Vacuum

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A similar training program in the city of Oakland, developed by Jones' Green for All, was approved in the summer of 2007 but has yet to get started. [See also Switching to Green-Collar Jobs (BusinessWeek.com, 1/10/08)]

Private Equity Isn't Enough

The efforts by state and local governments and a handful of advocacy groups to stimulate green-collar jobs is only part of the story. Venture capitalists are making significant investments in the companies that will develop the technologies behind the green economy. Take San Jose (Calif.)-based Nanosolar, which has raised $75 million in funding from four venture capital firms. Nanosolar shipped its first photovoltaic panels in December, 2007, and says that the first 18 months of its capacity has already been booked for sales to Germany.

While persuading foreign companies like Gamesa to set up manufacturing operations in the U.S. is great for the national economy, homegrown companies that can become world leaders can make an even bigger impact.

Silicon Valley didn't become a global tech leader thanks to private equity alone. From the funding of the Arpanet, the granddaddy of the Internet, to research and development tax credits, the federal government helped the technology industry grow. The green economy envisioned by the ASES report will never be realized unless the government takes a similar approach. Despite condemning "America's addiction to oil" and promoting the importance of alternative energies in his State of the Union addresses, President Bush has consistently failed to follow through on his promises to fund for alternative energy research. He's generous with the green rhetoric, just not with actual greenbacks.

"Every robust energy technology has existed because of government support and tax subsidies," says Joel Makower, editor of GreenBiz.com. "But there hasn't been the appetite [in Washington] to do that for clean energies."

It's not that Washington has done nothing to promote the green economy. In June, 2007, Representative Hilda Solis (D-Calif.) introduced a Green Jobs Act that provided $125 million in funding to establish national and state job training programs to address a shortage of workers in green industries, and the measure was included in the energy bill passed in December. And then there are green jobs initiatives proposed by the Democratic Presidential hopefuls.

"A Narrow Window of Opportunity"

These efforts aren't enough. Denmark is a leader in the wind power industry, producing nearly half of the wind turbines used around the world. Japan has long been a global leader in solar power. Abu Dhabi is building a special economic zone for the advanced energy industry. The U.S. alternative energy industry doesn't just have to grow, it has to grow fast if it wants to catch today's global leaders. "It's a narrow window of opportunity," says Jerome Ringo, executive director of the Apollo Alliance. "Because other countries have moved ahead, we cannot afford to not respond."

David Nissen, director of the Program in International Energy Management and Policy at Columbia University, is optimistic that the next administration will respond. "The states and the business community are way, way ahead of [the Bush] Administration on this. But in the next administration, whether it's [John] McCain or one of the Democrats, something serious is going to happen," he predicts.

Makower, too, is hopeful. "We lead in technology patents and the entrepreneurial knowhow, so I don't think that the game is over yet," he says.

It's not over, but the federal government needs to take meaningful action, matching the bottom-up efforts of state and local governments, activists, and venture capitalists. If it doesn't, it won't just mean jobs lost. Even worse, today's dependence on foreign oil will transform into tomorrow's dependence on foreign alternative energy technologies.

Jessie Scanlon is the senior writer for Innovation & Design on BusinessWeek.com.