The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- Even before moving into the White House, President Obama promised to make environmental initiatives a key focus of his new Administration. The Obama-Biden comprehensive New Energy for America Plan promised, among other things, to "create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future."
Now, with the economy in upheaval and Congress apparently unable or unwilling to agree on how to cut the deficit (or even raise the nation's debt limit), some might argue that President Obama should focus on creating jobs in established industries without worrying about how "green" they are, saving $150 billion in the process. But they'd be wrong, and here's why.
Like it or not, our fossil fuel supply is finite. In February,
The Wall Street Journal
reported that even
(XOM - Get Report)
, the world's largest publicly traded oil company, is struggling to find new reserves. Exxon currently replaces only about 95% of the oil it current pumps, and that ratio can be expected to deteriorate as remaining reserves dwindle. Worse, much of the world's oil sits under a region in constant turmoil. This year's Arab Spring has demonstrated that the governments of the Middle East are far from stable; deals cut with today's Middle Eastern leaders may be meaningless tomorrow.
Some oil companies are moving into natural gas; for example,
Royal Dutch Shell
will produce more gas than oil this year for the first time in its 104-year history. But even natural gas, while more plentiful than oil, will eventually run out. It only makes sense to develop a comprehensive energy plan that conserves the fossil fuels we have left, develops new energy sources and, in the process, creates new jobs for unemployed American workers.
Other countries already see the financial benefits of fostering green industries. Germany, Mexico and Spain are pushing hard to dominate growing markets in green manufacturing and transportation. Singapore is reportedly offering a 400% tax credit to manufacturers who participate in its green manufacturing training program. China is particularly aggressive, offering credit subsidies and cheap labor to green manufacturers.
recently shifted over 800 jobs to China, closing its Devens, Massachusetts manufacturing plant despite having received over $58 million in state aid. Unless the U.S. government is willing to step up and offer similar incentives, we're likely to continue to lose jobs overseas as the green revolution continues.
This is not to say that Obama needs to propose substantial handouts to U.S. companies at a time when budget battles are so fierce. Making low-cost loans to green manufacturers and energy companies could also allow them to grow and create jobs. America currently lacks the infrastructure to make optimal use of green products. For example, electric cars made by
and others will require charging stations across the country to go significant distances. The government could build that infrastructure ... or it could loan private companies the money to do so. Either way, construction jobs would be created.
Let's not forget producers of "green" products like fuel cells, wind turbines, and solar panels like
. Even if they're domiciled outside the U.S., companies like
Siemens Wind Power
Suntech Power Holdings
might be coaxed to the U.S. with appropriate financial incentives. Instead of losing "green" jobs, the U.S. could gain them.
At home, the Administration could also focus on encouraging companies that don't produce traditionally "green" products but have strong environmental records to increase hiring
s Top 10 "green" companies in 2010 (this year's list won't come out until October) included such diverse businesses as
Johnson & Johnson
. Technology companies tended to dominate the top tier, but retail giants
weren't far behind, and neither were
. Tying hiring incentives to a company's "green" initiatives could improve the environment while increasing jobs across industries.
When President Obama unveils his jobs proposal, it will undoubtedly include at least a nod to "green" industry. Here's hoping the President and his team have been creative enough to identify meaningful ways to incentivize American companies to foster sustainability as they hire.