China outpaces U.S. in green technologies, invests for long term


Jobs, jobs, jobs. All the politicians talk about jobs and how they are pushing to create them. Their problem, though, is that they only talk about a few jobs here and a few more there. But why waste our efforts trying to save nickels and dimes when we could create an entirely new sector in the economy by investing in green technologies?

Green jobs are by no means the final solution to our economic woes, but they would be a good start. However, to get these green jobs started, the industry is going to need a big injection of investments, and that’s not likely to happen while investors are as nervous as they are.

To overcome shaky investor confidence, the federal government should increase and make permanent subsidies and tax incentives for green companies here in the United States.

Promoting job growth through green technologies will require an increase in subsidies because of the capital-intensive nature of the industry. Buying and making the equipment and facilities for these businesses won’t be cheap. Furthermore, the green sector has a distinct disadvantage in relation to traditional and established sources of energy, such as coal and gas, because it is relatively new, thus requiring more subsidies.

Equally important to increasing subsidies will be making them permanent. Right now, the government has limited resources available for companies investing in solar and wind energies. Those subsidies are helpful, but they will soon expire unless Congress decides to continue them for another short period of one or two years, as they have done in the past. Not knowing whether Congress will allow those subsidies to expire makes investing in the green industry that much more risky. Making those subsidies permanent would show investors that the government is in this for the long haul, and that investments will eventually pay off.

To be sure, investment in the green industry won’t give us new jobs tomorrow. These companies will take a few years to really get going, but it’s one of the few sectors in the economy that shows much potential for growth.

For evidence of this potential, we need to look no further than our biggest competitor, China. According to blogger Andrew Winston of the Harvard Business Review on Sept. 23, 2010, China plans to invest between “$75 to $100 billion per year for 10 years running,” making American investments look paltry in comparison. While we suffered through this recent recession, China took the initiative and invested in the same green technologies we could have been developing. As we bailed out banks and propped up old industries, China provided much-needed subsidies for solar and wind projects. They must be laughing at us as we continue to seek jobs when the answer is right in front of us.

China realized, as we should have, that these subsidies are not a short term spur for job creation but a long term investment. Eventually, once the industry establishes itself and private investors see the risk of providing capital decline, the high subsidies will no longer be needed.

Creating such a green industry will certainly decrease the amount of pollutants in the air as well as the CO2 that causes global warming and climate change. It will also provide us with renewable energy, something we’ll need once our supplies of coal and gas run out.

But even if you enjoy breathing toxins, or you don’t believe in global warming, or you think coal will last us well into the future, creating a green industry is still better than doing nothing. The longer we wait, the more China establishes itself as the leader in this new industry. Even if we don’t demand these technologies, the rest of the world does, providing a huge market for our services.

If “jobs” are the bottom line, then using subsidies to invest in solar, wind and other green technologies is clearly one of our best options.