Obama’s New Green Stimulus Means New Business Opportunities

A snowy egret in Golden Gate Park, San Francisco
A snowy egret in Golden Gate Park, San Francisco

On one of the bulletin boards I monitor, David Hodgson asked “What strategic opportunities do you think the incoming Obama administration will provide for the ‘GreenMBA?'”

The intersection between the unfolding economic and ecological crisis places a program such as the GreenMBA [at Dominican University in San Rafael, California] at the heart of the changes occurring in the world. The Obama administration has signaled that the idea of a Green New Deal is a way to simultaneously address both of these issues.

What opportunities do you think this will this provide, and how can we best strategically place ourselves to take advantage of them?

I took up the challenge with a short answer as well (reprinted below, slightly edited). I’m interested to hear your thoughts on this topic as well. I said:

I’ve explored some ideas in some recent posts here (e.g., Economic Stimulus Via Renewable Energy Transmission Grid, for example).

Basically, I’m coming from the perspective that the transition to green energy (including efficiency) will be profitable both for businesses and for consumers, but there are barriers to achieving those profits. The barriers range from perverse incentives, to misaligned interests, to subsidies for the wrong things, to just plain old psychological barriers (“isn’t it more expensive to be more efficient?”). So the “Green New Deal” is less about government investment in businesses than in government incentives to guide or “nudge” businesses to do the right thing.

For example, in the current credit crunch, many of the green energy projects we were so excited about earlier this year are now on hold due to uncertainties about the availability of credit and customers. This is a perfect opportunity for the Feds to step in and guarantee loans and credit for these projects so they can continue – it’s low risk, and helps keep the wheels turning on the transition that we have to make. I guess one way to think about this is that Obama needs to “bailout” the green energy projects (which actually will be profitable and must be done) as much as he needs to help the automakers (which may never be profitable again and are taking us the wrong direction anyway).

With Obama’s commitment on Saturday to a huge stimulus packaged organized around sustainability, green energy, etc., it’s now time for us (the Green MBA types) to create the opportunities. Obama wants this stimulus to be “market-based” – focused more on breaking down existing barriers to realizing the profits that sustainability and conservation and new technologies will drive than on simply throwing money at inefficient industries to keep them afloat (Big Auto bailout, anyone?).

What do you think should be done with Obama’s $150 stimulus to the green economy and sustainable energy?

By the way, David’s own suggestions for Obama (eight of them) are here, on his blog Free Range Ape, including:

2. Give the Ecosystem a Cabinet Voice. Appoint a secretary of the environment. The environment needs to have a voice at the table that is equal to that of the treasury. It is, after all, a consideration that really needs to be present in the discussion of all things. And it is needed to help drive many of these issues.

and

7. Shift from a payroll tax to a carbon tax. My sense of the debate is that carbon taxes are a more effective policy solution than a cap + trade mechanism. Offsetting the carbon tax with a reduction of payroll taxes does two things. It reduces the cost of employment of an individual, thus helping us get the US working again, whilse decarbonizing our economy quickly.

2 thoughts on “Obama’s New Green Stimulus Means New Business Opportunities”

  1. I have recently started a business in the northern Michigan area called Northern Michigan Waste Reduction Management Authority (NMWRMA) and feel that there should be some sort of stimulus given to companies like mine. Michigan has the lowest recycling rate among all the Great Lake states and one of the lowest in the nation. I am trying to do my part to change that but it is starting to feel as though no one else is interested. If there is going to be any sort of changes in the “Green” direction then there has got to be some sort of incentive to do so. I know that this sounds greedy but I have found that if people are not going to gain anything from doing greener things then they would just as soon continue with their current course of action. I am not asking for a hand out but I can even get a loan to buy the processing equiptment I need to handle the massive amounts of recyclable plastics and glass that my company has amassed. At this point it would seem more feasible for my to sent these materials to a landfill instead just to have the storage space opened back up…

    1. John – I definitely agree that businesses such as yours deserve some love from the stimulus package – or at least deserve to have the economy back on an even keel so you can get that loan.

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