CLEANTECH: Industrial Policy Reemerges

This week’s reunion of Bill Clinton, Al Gore, and their former Presidential campaign co-chair Tim Wirth chatting up the economic promise of clean energy at a confab at the Newseum along the Potomac brought back memories of “national industrial policy” during the 1980s. Just as it did then, it still smacks of centralized economic planning to some. But, it could prove a boon to private sector clean energy companies. “There’s been a shift from Texas oil and gas to science and technology,” said Gordon K. Ho, partner in the Silicon Valley firm, Cooley Godward Kronish, where he heads the clean technologies practice. He noted that after the election, California has more political influence in Washington The clean tech stimulus money likely will benefit Silicon Valley entrepreneurs developing new energy efficiency and renewable energy technologies, plus the energy researchers headquartered at University of California at Berkeley and Stanford University, he said. While Clinton and Gore’s roles are clear, you may wonder about Tim Wirth’s role. Most remember him as the author of cap-and-trade legislation to address acid rain in the Senate and later as Clinton’s State Department point person on the global environment. But as a young lawmaker he played a key roll in fostering the high technology boom as chair of the House Subcommittee on Telecommunications. It was 1982 and the nation was in deep recession with 10.8 percent unemployment. U.S. heavy industries--steel, autos, rubber--were reeling in the face of Asian economic ascendancy, led by Japan and the four tigers--Hong Kong, Singapore, Taiwan, and South Korea. In Congress, old line Democrats and Republicans sought to protect heavy industries. But Wirth and many younger members, known as the “Atari Democrats,” had a different approach. They said instead of looking to the past, look to the future by creating a national industrial policy that fosters development of high technology industries in the computer and telecommunications field. Do this by developing a government plan to break down policy barriers and to provide seed money and opportunities for the nascent companies developing the promising new technologies. Break down trade barriers and provide foreign aid so that companies can export their equipment and related services to other nations to make the U.S. predominant in the high technology sector. It’s debatable how well their national industrial policy worked or whether U.S. companies succeeded in spite of it. Yet, Wirth and his fellow young upstarts’ vision of a new industrial economic bonanza supported and partly planned by government came to pass with the boom in high tech that we have all known in our lives. Now the circumstances are similar. The nation is in deep recession, U.S. manufacturing is battered by Asian competition. High technology is a mature industry that does not appear to offer the growth prospects it did in the past, particularly with the consumer tapped out. That’s why Democrats are forging a new national industrial policy aimed at knocking down policy barriers and providing financial assistance for clean energy companies, which they hope can lead the nation to a new round of economic growth in the decades to come. It won’t be easy to succeed. “This is a very complicated soup,” observed Wirth. The economic stimulus bill’s money is helpful, but policy blocks must be eliminated in subsequent legislation. Transmission siting and financing difficulties are key hurdles that must be overcome, according to Wirth. Senator Harry Reid (D-NV) plans to do just that: remove bars to building the transmission lines needed to allow renewable energy developers to get their power to market. Democrats also are expected to mandate markets for green power with a national renewable energy standard and new energy efficiency requirements. More federal plans likely are on the way. Will they succeed in growing the green economy? Stay tuned.

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CLEANTECH: Industrial Policy Reemerges

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