Financial crisis is not eco-friendly
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KAI RYSSDAL: Amy and I were talking about those loan guarantees and Detroit moving to more fuel-efficient cars. That’s just the latest indicator that the environmental movement has been on what you might call a roll the past couple of years.
The debate over climate change and fossil fuels has grown more prominent. There’s more private investment in clean energy, and there are more regulations designed to fight global warming. But just how well can “green” weather an economy drowning in red ink?
From the Marketplace Sustainability Desk, Sarah Gardner reports.
SARAH GARDNER: Martin Schlageter is a clean-air advocate in Southern California, and he’s furious at Arnold Schwarzenegger.
MARTIN SCHLAGETER: Our reaction to the governor’s veto is one of disgust and disbelief.
Schwarzenegger vetoed a bill that would have slapped a clean-air fee on cargo containers entering California ports. Shipping emissions dirty the air and exacerbate global warming. But in rejecting the fee, the Republican governor argued it was another added cost on business in hard times. Get ready to hear that refrain a lot. Take the debate over regulating greenhouse gases nationwide:
KENNETH GREEN: Certainly, it’s hard to see a president coming in and saying, “You know, I think what’s wrong with the country is your energy’s not expensive enough. Here, let me raise that for you.”
That’s Kenneth Green, a scholar at the American Enterprise Institute. Green is no tree-hugger, but even environmentalists have doubts now that Congress can pass a bill capping greenhouse gases next year. Anything that threatens to raise energy prices will turn off consumers as pocketbooks get squeezed.
Environmental strategist Ted Nordhaus says the green bubble has burst.
TED NORDHAUS: I knew we were in a bubble when my Sports Illustrated showed up one week and it was the “green issue” of Sports Illustrated.
Nordhaus believes “green consciousness” doesn’t go much beyond what he calls the “liberal elites.” He expects the economic downturn to put a lot of green initiatives on the back burner. But Nordhaus says even a recession can’t wipe all green religion away — especially the stuff that’s saving business money.
NORDHAUS: Where a Wal-Mart and other companies have made big investments in efficiency and other practices that are not only sort of good for the planet but allow them to get their costs down, I think that will sustain.
But what about green energy? Analyst Eric Wesoff at Greentech Media says there’s good news and bad. The good news is that along with that $700 billion bailout, Congress also renewed tax credits for industries like wind and solar. The bad news?
Eric Wesoff: Some of the investment banks that were providing financing for many of these very large solar projects, such as, unfortunately, Lehman Brothers, are no longer viable entities.
Trouble is, to commercialize renewable energy you need economies of scale. And scaling up takes lots of capital. So a credit crunch is the last thing these companies need.
Nancy Floyd is founder of a green venture capital firm called Nth Power. She says it can take hundreds of millions of dollars for a company to start production.
NANCY FLOYD: Many of them were counting on being able to access the public markets to be able to then execute on their business plan and become profitable. Those are the ones that are really going to be in trouble.
Floyd says her firm isn’t pulling back, at least right now. She and other clean-tech supporters see this downturn as a “bump in the road,” not a dead end for the green economy.
Glenn Hurowitz at Greenpeace insists the alternative energy business is the country’s best hope for getting back on its feet. He wishes that $700 billion we’re spending on the banking bailout would go to a green stimulus plan instead.
Glenn Hurowitz: We’re giving hundreds of billions of dollars to Wall Street, and so far it doesn’t seem like Wall Street even cares.
Hurowitz and other backers of a massive green spending plan, say the Wall Street bailout is “shoveling good money after bad.” Shoveling good money after green, they insist, would create millions of badly needed jobs.
I’m Sarah Gardner for Marketplace.