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Laurent Cilluffo


Bullish on the Planet

Since the mortgage crisis hit last summer and panic swept Wall Street this fall, much of the American economy has gone into a tailspin. But worldwide, the green energy sector is booming, in large part because of rising concerns over climate change. According to a recent United Nations report, global investment in wind, solar, and other sustainable energies totaled nearly $150 billion in 2007, a 60 percent jump from the year before. And though a publicly listed clean energy stock index fell about 9 percent worldwide in the first half of 2008, it had increased 58 percent in 2007 and 33 percent in 2006. “Clean tech investing is as recession-proof as you’re going to get,” says Brian Fan, senior director of research at the Cleantech Group, a consulting firm that helps match green companies with investors.

In the United States, where renewable energy markets are less mature than in Europe, venture capitalists and private equity firms are pouring billions into smaller, non-public companies just getting off the ground. But the government provides significantly fewer dollars in subsidies to these startups than to their fossil fuel and nuclear counterparts. As Audubon went to press, the Senate had reached a tentative deal to extend—for one to eight years—tax breaks for wind, solar, geothermal, and biomass that are set to expire at the end of December. After 18 months of bickering, they seem to be ironing out how to pay for the $800 million or so it will cost the U.S. Treasury annually. Even if the deal holds, it will have to be reconciled with the House bill, passed in May, and then signed by President George W. Bush. Industry advocates expect a bill to pass eventually, but they’re worried the delay will prove costly. “We’ve seen it over and over again,” says Neal Lurie, an American Solar Energy Society spokesman, in reference to several previous times when the tax breaks lapsed. “As we get closer to when the incentives are set to run out, investor dollars start drying up.”

If the U.S. government does extend the renewable energy tax breaks and spend more money on research and development, among other things, then clean tech industries are expected to generate millions of new jobs. “Green incentives can be seen as a very viable economic stimulus,” says Robert Pollin, a University of Massachusetts economist who has studied the issue. Many of these “green-collar” jobs would be in construction and manufacturing, but there would also be spillover need for everything from biophysicists to security guards. Says Lurie, “We have something that’s good for the environment and could be the economic opportunity of the century.”—Jesse Greenspan

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