Challenges provide green opportunity

Jun 28, 2010 Issues: Energy

The economic challenges facing our nation present us with great opportunity to rethink and retool how we build the economy and workforce of the 21st century.  Nowhere is this more evident than in the renewable energy and green economy. 

Consider what is at stake: Cutting-edge technologies of the future; manufacturing capacity to build these advanced technology products; lower energy costs for families and businesses; reducing our dependence on foreign oil; and preserving the environment for future generations.

Unfortunately, while some progress has been made in recent years, we are playing catch up. We have lacked an energy policy for changing times and changing technologies.
Tomorrow’s energy will come increasingly from the sun, wind, ocean tides, hybrid technology and other resources we are just beginning to harness. This point was made startlingly clear to me on a recent visit to ECD/United Solar in my home state of Michigan. This facility boasts state-of-the-art technology and a dedicated workforce ready to help lead America’s surge into the renewable energy marketplace. ECD/ United and similar firms risk being overrun by foreign competitors, especially the Chinese, who are investing heavily in renewable technology and threaten to dominate the international marketplace. America cannot sit idly by while our competitors stake claim to this new technological frontier.  We must extend and enhance incentives at the federal level to spur the domestic manufacturing of renewable technology.  

As made clear by management at ECD/United, what America needs is a government dedicated to providing basic support. We must reject the views of rigid ideologues who believe that success can be achieved by the private sector alone.

Governments in China, Korea and other nations are racing ahead to help their industries dominate in this area. We need a different partnership than those adopted by others — an American private-public partnership.  We cannot miss this opportunity to tap into the scientific and technological know-how of our skilled workforce to put America at the forefront of international competition.

In recent years, Congress has advanced tax incentives to encourage the production and use of renewable energy. These were important first steps to move America away from its dangerous dependence on foreign oil, but we must do more. Many of these policies have expired, or will expire shortly. The Ways and Means Committee is reviewing existing policies and new proposals to boost the private-public partnership necessary to establish American businesses at the forefront of the green economy.

Central to this legislation will be an improved manufacturing tax credit, commonly referred to as Section 48C, to provide 30 percent for investments to help businesses retool facilities so they can make green technologies. Clear priority will be given to businesses that manufacture, rather than simply assemble, these technologies here in the U.S.  The U.S. economy has always had a strong manufacturing base, and now is the time to play to these strengths and engage, and grow, our skilled workforce to meet the demand for green technology. 

The oil spill in the Gulf of Mexico and the environmental and economic impact it has wrought should force us to reconsider our dependence on fossil fuels for our transportation needs. Our tax code includes incentives for other, renewable fuel sources, but we need to do more to encourage the use of alternative fuels in our cars and trucks.

Take, for example, the electric vehicle. General Motors is going to bring the Volt to market on schedule, but initially the battery packs will be built in South Korea. Why? In part, because for years the South Korean government had a strategy to financially support this technology and the local industry. America is on the cusp of changing that because of private sector investment and accelerated public support for battery development. The Recovery Act invested $2.4 billion in advanced battery and electric vehicle projects.  Existing tax credits for plug-in electric vehicles are expected to bring 90,000 vehicles to market in the year 2015 alone. The Energy Information Administration estimates these tax credits “will allow both battery and battery-system manufacturers to achieve earlier economies of scale through greater initial sales, thus allowing battery and system costs to decline more quickly than would have been the case without the tax credit.”  We must keep that momentum through further incentives to manufacture electric and hybrid vehicle technologies here in the U.S.

If we are not aggressive about expanding our green manufacturing capacity, these manufacturing jobs will be created overseas, and the U.S. will become more reliant on products that are produced outside of our borders.
The U.S. took a good first step supporting domestic manufacturing in the Recovery Act, and we must now seize the opportunity to build on that investment and make crystal clear that the government is a full, active and effective partner in creating green jobs and technologies.