The Alternative Green Economic Policy

The Ministry of Environment and Water Resources saw its budget for the next fiscal year increased from $1 billion to $1.09 billion. Despite the increased budget, there is a imperative need to develop Green Energy and the Green Workforce. Budget 2009 could have done more to provide incentives and create a market that will encourage more companies to embark on green renewable energy projects.

Green Job Initiatives

Susan Hockfield, the president of the Massachusetts Institute of Technology and one of the United States’ leading brains says, “I am convinced that the next economic growth will come from innovation and the most powerful promise for innovation lies in the renewable energy sector.” A study by Roland Berger Strategy Consultants on the current global green-tech market indicates that the market which was worth more than $1.3 trillion in 2005, is set to grow in value to more than double to some $3 trillion until the year 2020. “This (the green sector) will become one of the biggest markets in the world, bigger than the automotive sector”, says Matthias Machnig, a state secretary at the German Environment Ministry.

A quickly growing global green market could mitigate the effects of the recession that is pulling many other industries to their knees. We must be made aware of the vast potential the Green Sector offers. The Green Sector may very well be the savior of the ailing economy of Singapore; which is why the Budget should have given the impetus to create Green Jobs Initiatives, which include:

* Increasing the number of industry sectors and businesses that have or are creating green jobs; * Supporting creation of green jobs for a diverse mix of people with various educational backgrounds;
* Establishing job-readiness training programs for unskilled workers so they can get jobs in green industries;
* Aligning and increase the resources and expertise needed to grow the workforce capacity for these emerging and changing jobs;
* Investing in diverse worker education and training to prepare for green jobs; and
* Increasing education and training capacity to support green job growth.

The Budget should have made provisions for the government to create jobs in the sector of Alternative Energy Production and Efficiency, which includes jobs in wind energy; bio-fuels and bio-materials; solar and energy storage; energy efficiency; and advanced technology vehicles.

Green Building Construction and Retrofitting, which includes jobs in energy efficient building, construction, and retrofits; energy efficiency assessment serving the residential, commercial, or industrial sectors; materials recycling and reuse; architecture and design; land use/site analysis; building materials; and construction/rehab, is another Green Sector where new jobs can be created.

To support the Green Sector growth, the Budget should have placed key investments and stimulate activities in this sector through:

* Working with Business and Industry to Create Green Sector Skills Alliances;
* Investing in Worker Education and Training to Prepare for Green Jobs;
* Increasing Education and Training Capacity to Support Green Job Growth; and
* Supporting Green Jobs Related Research, Information Sharing, and Learning.

Capital Market Development Taskforce

Many Green stocks have lost their market value in this global economic crisis. But experts from the renewable energy markets, like Vivienne Cox, the chief executive officer of BP Alternative Energy, believe that as long as the incentives are provided, “money will flow” into renewable energy and “green stocks will recover”.

As this is an opportune time to invest in such low Price-to-Earnings ratio (PE) and Price-to-Book ratio (PB) stocks in the Green Sector, the Budget should have created a Capital Market Development Taskforce, which will develop blueprints and action plans to create investment funds to foster the creation and grow new businesses and new industries in the Green Sector through investments in private equity, venture capital mezzanine funds and co-investments in individual companies alongside these funds. A balance between saving money and spending money in such investments will create a healthy economic climate for Singapore.

A Holistic Approach

A more integrative, holistic approach should be adopted in embracing the Green Sector; where not just the Ministry of Environment, but the whole of government including the Ministry of Education, Ministry of Trade and Industry, Ministry of National Development and even Land Transport Authority should look at the environment as part of growing the Green Sector.

The current government of Singapore recognises the need to have an integrated approach in dealing with Green issues and have created the Energy Policy Group (EGP). The EGP consists of representatives from:

* Ministry of Trade and Industry (MTI);
* Ministry of Finance (MOF);
* Ministry of Foreign Affairs (MFA);
* Ministry of the Environment and Water Resources (MEWR);
* Ministry of Transport (MOT);
* Agency for Science, Technology and Research (A*STAR);
* Building and Construction Authority (BCA);
* Economic Development Board (EDB);
* Energy Market Authority (EMA);
* Land Transport Authority (LTA); and
* National Environment Agency (NEA)

The EPG has four working groups on Economic Competitiveness, Energy Security Climate Change and the Environment, and Energy Industry Development, headed by the different agencies:

However, the administrative difficulties and layers of bureaucratic red tape accumulated across 11 ministries and agencies in the EPG will pose a problem in developing effective, timely and appropriate green policies.

If effective and appropriate Green policies have to be developed to boost the Green Sector, the creation of a new ministry is important; the Ministry of New and Renewable Energy. The creation of this new ministry will create accountability for the government to be focused on energy security, in tackling the threat of climate change and also to develop the Green Sector further to the benefit of the economy of Singapore.