Dangerous Trends

Our current economic crisis is scary for a lot of reasons. The wide-ranging effects of such a massive shake-up of our financial system will be felt for years to come. Since no one really fully understands how we are going to fix the crisis (experts don't even know what is going to happen on a day-to-day basis), it's impossible to say with any kind of certainty what kind of societal changes we are going to see in the coming years. How long will this crisis last? What kind of changes will we all have to make to see this through? Health care, education, infrastructure -- what will our priorities be and where will we cut corners?

As you might guess, I'm extra sensitive to how the financial crisis will impact spending on clean energy projects, from both the public and private sectors. At a certain level, economic strain should encourage the development of new green technologies. With soaring oil prices, it makes sense to invest in homegrown, innovative solutions to our energy problems. American businessmen are always looking for new opportunity, especially when the economy begins to stagnate. A recession should stimulate innovation, forcing businesses to find that strategic edge. And throughout the course of this election season, we've seen promises from both candidates for an intensified investment in green jobs and green technologies. Taken all together, an economic slow-down could provide the appropriate environment for a green technology boom and an explosion in green business.

Unfortunately, we are faced with the prospect of something much deeper and more lasting than an economic slow-down, or even your garden-variety cyclical recession. The current economic crisis has the potential to be long-lasting. It may well affect the very foundations of our economy. If things become dire enough, will it start to negatively effect the market for green innovation?

And what about oil? A few months ago, when we seemed to be stuck in a simple slow-down, oil prices seemed to be on a never-ending rise. But since financial institutions began falling like so many Wall Street dominoes, oil prices have done a complete about-face. If they continue to free fall, will there be less incentive to invest in alternative fuels?

We are already starting to see indications that investment in clean energy projects has begun to dry up. There is an article in today's Wall Street Journal that says the combined effects of a credit crunch and a drop in oil prices has been an open-handed slap of reality in the face of start-up renewable energy companies. (Unfortunately, the WSJ still has subscriber-only content on their website, so what I've linked to here is just the preview.) The Washington Post ran a similar article yesterday that looks at the inverse relation between the price of oil and the demand for new forms of clean energy.

So what's to be done? Global Warming isn't going to wait for the U.S. financial markets to right themselves. And we know that we are already way behind in the race to save our planet. We don't have the time or the luxury to let this thing sort itself out. New York Times columnist Thomas Friedman continues to argue for a price floor for oil: the government takes oil to keep the price at $3.00 a gallon. But will the next President have the strength to demand such a potentially unpopular policy?

There are no real answers at the moment, because we don't know where all this is headed. As individuals, we can use the power of our consumer dollar to support green companies and technologies. This means that we have to educate ourselves and learn about new options and innovations. I'll do my best here to draw attention to the best information available on green products. The payback for educating ourselves is that the consumer dollar is extremely effective. And we can support politicians who continue to push for investments in green technology, and hold those politicians accountable for their policy decisions.