Idea of the Day: The Role of Public and Private Sector in the Clean Energy Economy

There is a common misconception that the “green jobs” resulting from a transition to clean energy will amount to government work. Nothing could be further from the truth. Private sector investments will be the main engine driving growth in the clean energy economy. The scale of the energy transformation is simply too large for public sector resources and programs to tackle alone. The significant public investments in clean energy included in the American Recovery and Reinvestment Act were a one-time stimulus to respond to dire economic circumstances.

Private businesses will create most clean-energy jobs under climate legislation, as well. Existing sectors will expand, and whole new industries will develop to respond to increasing demand and new markets for clean-technology goods and services. The private sector will also lead the way in technological innovation, developing new products that will serve the domestic market and be exported to a global economy hungry for low-carbon energy solutions.

Yet these private sector investments will not materialize at nearly the scale needed without an initial dose of public investment coupled with strong public policy drivers. This is particularly true given the current policy environment, which disregards the cost of inaction on global warming and lacks the foresight to calculate the tremendous benefits that would accompany a strong clean-energy investment effort.

This is a time-tested script. Smart policy sets a framework for investment. It sends signals to the market that in time can transform the larger economy. This is how we built the railroads, electrified rural America, deployed the National Highway System, and launched a nuclear energy industry. In each case, public investment and public policy created vast new opportunities for jobs and profits in the private sector, enabling market transformation and industry growth.

For more on this topic, please see:

• Creating Clean Energy Jobs to Drive Economic Recovery, by Bracken Hendricks.