At the end of March, I had the privilege of joining the climate change minister Gregory Barker and a selection of UK businesses on what was described as the first green trade and policy mission to the US.
As well as meeting with companies involved in the green and sustainability arena, an objective of the trip was to meet with policymakers to demonstrate that implementing policies to support green growth can help secure sustainable economic growth.
What was evident was the impact of the economic downturn and the swing back towards the Republicans in last year’s midterm election on policy and investment priorities in the green economy. The federal government is struggling with low-carbon and clean energy policies and many states are now at risk of backpedalling on climate and clean energy as they face mounting budget deficits and pressure to grow their economies.
However, with fuel prices approaching the $4 per gallon mark for the first time since July 2008, energy policy is again rising up the political agenda in Washington.
During the trip, President Obama delivered a speech on the US’s energy security, launching a “blueprint for a secure energy future”. This outlined a comprehensive national energy policy aimed at developing and securing America’s energy supplies, providing customers with choices to reduce costs and save energy, and promoting innovation.
In his speech, Obama referred to the introduction of a clean energy standard, which aims for 80% of the country’s electricity to be sourced from clean energy by 2035. He emphasised the potential for job creation and the emergence of new industries, marking how the climate change debate in the US has shifted focus to energy security and economic prosperity.
We met with a wide range of businesses and were particularly impressed by how some of the largest US companies are recognising the threats and opportunities posed by climate change. Bank of America, for example, is planning a $20bn business initiative to address climate change through its products, services and operations. Meanwhile, the American Energy Innovation Council, which includes Bill Gates and Jeff Immelt, is one of several corporate level groups putting pressure on governments over climate change and sustainable development.
A particular highlight of the trip was a visit to the Philadelphia Navy Yard, which has become a clean energy hub for the Delaware Valley region. During our visit, we met representatives from regional businesses and the newly-formed Greater Philadelphia Innovation Cluster (a consortium of universities and businesses that obtained a $160m DOE grant to perform research on building energy efficiency).
Overall, what struck me about the Navy Yard was the energy and dedication of the people we met. The Yard is a real symbol of the ongoing commitment to cleantech innovation in Pennsylvania, despite policy uncertainty at the state government level following the recent election of a coal-friendly Republican governor.
Overall, the trip provided an interesting insight into the future of the green economy in the US. The political rhetoric has shifted away from the science of climate change towards the mechanics of economic recovery and energy security. It is on this platform that future policy decisions are likely to be based. While strong policies are necessary to support corporate growth in this area, based on the business leaders I met, there are clear signs for optimism about the potential longer-term shift towards a greener US economy.
Emma Howard Boyd is head of socially responsible investment and governance at Jupiter Asset Management