Air Date: Week of March 10, 1995
Terry FitzPatrick reports on the Clinton administration's efforts to bolster exports of cleanup technology. Entrepreneurs are hopeful their products will see improved sales overseas. But some critics call it corporate welfare and others say it's too little too late to help the U.S.'s sagging envirotech industry.
CURWOOD: This is Living on Earth. I'm Steve Curwood. The Clinton Administration says environmental protection is a good way to create jobs for the US economy. So, they've launched a program to help American businesses win a big part of the growing world market for green technology. The recent slide of the US dollar against the Japanese and German currencies can only help the effort by giving US business a price advantage. If the program succeeds, it could mean thousands of jobs for Americans, but it may not. Conservatives call it corporate welfare, which should be cut from the budget, while investors say the plan comes too late to help the sagging enviro-tech industry. Terry FitzPatrick of member station KPLU has our report.
FITZPATRICK: The workshop at Advanced Environmental Solutions near Seattle is typical of the thousands of small American firms that manufacture environmental equipment.
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FITZPATRICK: Jeff Petty, an engineer turned entrepreneur, is building a system that cleans up industrial wastewater by using simple charcoal instead of expensive chemicals.
PETTY: It is this type of process which we want to look at exporting worldwide, because there are a lot of places in the world which do not have the availability of these chemicals.
FITZPATRICK: Petty has been selling his invention in the US for more than a decade, but he's been struggling recently to sell it abroad. He's had trouble finding business leads and can't afford to maintain offices overseas. At international trade shows, he's made cultural gaffes that have cost him the sale. And when Petty did sell one of his filters in Russia, he had trouble making deliveries.
PETTY: Frankly, it was a nightmare. There was only 2 trucks that had trailers that would fit our 40-foot containers. And trying to first of all find those people and get them to coordinate required a lot of payoffs.
FITZPATRICK: They're the kind of problems facing any business selling equipment abroad. But the Clinton Administration has decided environmental firms deserve special help. So the Commerce Department has launched a $21 million campaign to promote US environmental exports. Raymond Vickery is Assistant Secretary of Commerce.
VICKERY: Environmental technologies is one of those industries which is at a crossroad of public policy and our own economic self-interest. We have an interest around the world of seeing the environment improve, and it also offers an excellent opportunity to employ more Americans and increase our own standard of living.
FITZPATRICK: The export initiative puts environmental specialists in foreign capitals to lobby for American business. There's also a toll-free assistance center that companies can call in Washington, D.C. This advocacy is part of a larger effort to boost all US exports. But environmental protection is the only industry with a special task force involving 19 government agencies. That's because the market for environmental technology is at a critical point in many developing countries.
VICKERY: As countries like Brazil, China, India, get more disposable income, one of the first areas of change which takes place is people want to breathe clean air, they want to drink clean water. They want to have solid waste disposal systems that really work.
FITZPATRICK: The question is, can US firms capture this blossoming market?
FITZPATRICK: If you go to America's major ports, you'll see the US exports less than 10% of its environmental production. By contrast, Japan exports up to 23%. Germany exports 40%. They're far more experienced in environmental trade. American firms have concentrated on domestic sales because the US is still the single largest market for environmental technology. But the domestic market has reached a plateau, and firms are looking abroad for growth. The problem, according to Vickery, is American firms find it hard to compete with German and Japanese companies because they get government subsidies.
VICKERY: And the fact is that if you just say well, we'll just stay out of it, we won't be involved, Americans aren't going to win.
FITZPATRICK: Vickery's program is less than a year old, but already he says it has helped Americans win $2 billion in foreign contracts, which translates into 30,000 new American jobs. Still, the program is under attack from 3 directions. First, some doubt the program will boost depressed environmental stocks. Michael Silverstein edits an investment guide called The Environmental Industry Yearbook, and says the Clinton Administration missed its chance by failing to launch the export program when it first took office.
SILVERSTEIN: Because there was a failure to articulate a vision at that time that this country was prepared to be dominant in enviro-tech, there has been a drastic drop off of investment in the field. Basically people think well, you know, Al Gore for the last year and a half has been going off on the Information Highway. If he doesn't think enough about enviro-tech, well then it probably isn't a good business. And sure, it's good that it's happening now. But we've lost a lot of ground.
FITZPATRICK: The second criticism comes from people who note that the US environmental industry is dominated by firms that clean up toxic spills and build smokestack scrubbers. Burt Hamner, a consultant with Shapiro and Associates in Seattle, says that's not what developing countries want to buy. He says the Clinton initiative should stress instead, efficient technology that will reduce pollution while saving companies money.
HAMNER: They need to be including more production improvement companies, people that make cement better. People that know how to make circuit boards that don't create lots of pollution. That's the kind of technology you can sell, 'cause it's business.
FITZPATRICK: The third criticism comes from conservatives who oppose government subsidies for business. Jonathan Adler is Director of Environmental Studies at the Competitive Enterprise Institute.
ADLER: People are painting a lot of pork green. They figure that if you say a program is necessary for environmental reasons, it's a lot easier to get it through Congress. The reality is that just because other countries have decided to adopt industrial policies to help certain industries doesn't mean that the United States should make the same mistake. That we shouldn't burden the taxpayer by forcing them to pay for programs to help politically preferred industries.
FITZPATRICK: The criticisms are nothing new to Assistant Commerce Secretary Vickery. He maintains that the Administration has stressed environmental exports all along, and his initiative does include clean technology. As for funding, he says the program is able to show bang for the buck: $2 billion in sales so far on a $21 million investment. But whether the initiative will continue is now in doubt. Commerce programs are due for intense scrutiny this year in the House Budget Committee. If the Federal program is cut, however, it won't be the end of environmental export assistance. At least 5 states have launched programs of their own. Worldwide, environmental protection is now a $300 billion business, and it's expected to double in size by the year 2010. Government assistance or not, US environmental firms are expected to grow with the world's growing attention to environmental protection. For Living on Earth, I'm Terry FitzPatrick in Seattle.
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