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Commentary: Growing Missouri's economy a nice, bright green

This article first appeared in the St. Louis Beacon, May 27, 2009 - One way to pull the state's economy out of its long-term slump is to focus on a green economic recovery program. The centerpiece of such a strategy is the creation of thousands of new "green jobs," according to a report by the nonpartisan Center for American Progress. The report estimates that $1.8 billion would be Missouri's share of the national program.

With green jobs, current jobs are altered to meet the needs of a 21st century low-carbon economy. In other words, occupations in fields such as engineering and construction are converted into sustainable jobs. The financing for these jobs comes from investments in green industries such as retrofitting buildings for low-energy consumption, public transportation and freight rail, smart grid electrical transmission systems, and renewable energy sources (i.e. solar, wind and biomass).

This plan accomplishes several national policy goals including: Sustainable economic growth, reducing dependence on foreign oil and combating global climate change. Sustainability must be the cornerstone of any growth strategy. Continuing to rely on nonrenewable resources such as oil, coal and natural gas threatens our long-term economic progress, if not our very survival on this planet.

However, a green recovery program recognizes that jobs are, first and foremost, the chief concern of national and state policymakers. According to the Center for American Progress, 800,000 construction jobs have been lost (probably more since the report was written in 2008). A green economy recovery program would help to replace those jobs in the construction industry. It would, the center estimates, translate into more than 43,000 new jobs in the state.

Examples of the type of jobs that would be created include wind farm construction (employing sheet-metal workers, machinists, truck drivers among others) and retrofitting buildings to increase their energy efficiency (employing roofers, insulators and building inspectors).

Another key component of the green economy is boosting spending on mass transit. Expanding mass transit systems would provide employment to civil engineers, track layers, electricians, welders and others.

This job creation would produce a multiplier effect as the new industries spawn numerous support services from law and accounting to retail sales. For example, a recent U.S. Department of Commerce report found that $1 million invested in renewable energy industries produces 16.7 jobs versus just 4.5 jobs created for the same investment in the oil industry. Spinoffs are also important in the state, because such jobs are not included in the 43,000 figure given above.

Between the new green jobs and their spin-offs, the state should generate significantly more in income and sale tax revenues. As more people can afford to purchase homes, revenues from residential property taxes will start to grow again. This will go a long way toward easing the state's budget crunch.

The green economic recovery program is not a panacea. And several concerns have been raised about the program's reliance on government spending, etc. Indeed, four major areas of criticism have been directed toward a green jobs program.

(1) Green jobs are heavily subsidized by government and, critics say that without this source of funding they would not be created by private companies.

The Center for American Progress strongly disputes this charge, arguing that federal dollars would be used to stimulate private investments. For example, federal money could go into infrastructure and research and development. Private businesses would then carry out the projects for a profit. Research indicates that these investments would drive new demand for construction and manufacturing jobs. Those are the two sectors of the economy hardest hit by the current recession.

(2) Critics also say that heavy government intervention would stifle the creativity of private innovation.

Private companies, however, would still remain the principal source of innovation in a green economy despite significant governmental support and investment. There is precedent: In the 19th century, the federal government invested in roads, canals and other so-called "internal improvements." These infrastructure improvements led to the huge expansion in the national economy that followed the Civil War. More recently, the aerospace industry and the Internet were all examples of industries that originated as a result of the foresight of public policy.

(3) Some dismiss green industries as loss leaders.

However, this assessment is usually based on a flawed cost-benefit model. While the economic costs of green industry can be easily quantified, its many social benefits cannot be enumerated as precisely. For example, reducing pollution and our dependence on foreign sources of oil, as well as technological innovations that have not happened yet and a vibrant ecosystem, are examples of tremendous social (indeed global) benefits that are nearly impossible to attach exact dollar values to.

(4) Detractors argue that green economy proponents are anti-technology and want to turn back time to live in a more idyllic world.

Nothing could be further from the truth. The companies that will thrive in a green economy are the ones that can innovate the most; bringing down their costs as they reduce carbon emissions. This will benefit consumers as well as the environment. Thus, instead of pouring resources into obsolete fossil-fuel technology, producers and consumers will have economic incentives to expand renewable energy sources and grow sustainable industries.

The choice for Missouri and the country is clear. "Going green" is not just a smart choice for individuals and households. It also makes a lot of sense for the federal, state and local governments.

Robert Cropf chairs the Department of Public Policy Studies at St. Louis University.