Can We Afford to Be Environmentally Friendly?

After eight years of receiving George W. Bush's cold shoulder, environmentalists are undoubtedly feeling more hopeful under an Obama presidency. Of the $787 billion in the stimulus bill, signed into law by the president on Feb. 17, $32.7 billion was allocated to green initiatives that will mean more environmentally friendly homes and more emphasis on renewable energy like solar and wind. But is the money enough? And at a time when the nation struggles to find its way out of an economic crisis, does it matter? NEWSWEEK's Christina Gillham spoke to Fred Krupp, president of the Environmental Defense Fund (EDF) and coauthor of "Earth: The Sequel," about those issues and why he thinks a green economy can lead us out of the financial crisis. Excerpts:

NEWSWEEK: EDF has had a lot of influence in getting greener initiatives through legislation. In 1990, for example, you played a role in getting Congress to pass the Clean Air Act, which helped reduce acid rain. More recently, you helped craft legislation for California's 2006 Global Warming Solutions Act. As one of several groups involved, what was your role in shaping the green aspects of the stimulus? Did you meet with the president?
Fred Krupp: We did have conversations with folks on the Hill and with Obama's team, but not with the president himself. We let them know about the research we've done on which technologies result in jobs and wanted them to be aware of the fact that the stimulus could be used in a way that not only keeps America from importing so much oil but also could employ Americans in quite a few of the supply chains for low-carbon, high-efficiency companies.

Is there a segment of the green industry that stands to benefit more from the stimulus package than others?
There's a big emphasis on home weatherization and folks in that business will benefit. Having said that, there are 130 million homes in America and 75 percent of them could be made more energy efficient with a very quick payback. And the recovery package, as good a down payment as it is, really only covers a small fraction of the number of homes that could be profitably retrofitted.

How do you keep people interested in green initiatives and saving the environment at a time when people are concerned about their jobs?
To survive on this planet we have to find ways to do the things we want while putting less carbon pollution into the air. I think people who understand that are going to be the entrepreneurs—small and large—that thrive into the future. One way to engage with people is to let them know that we need to do this for environmental reasons, but we also need to do this to get our economy going again.

How concerned are you that the environment will fall off the priority list of people who are cutting corners and personal budgets and maybe can't afford to "go green" right now?
Going green today means saving green, whether you're a small household, a small business, an electric utility or even a global manufacturer. That's always been true, but it's become a big focus lately for companies looking for smarter and more profitable ways of doing business. General Electric, for example, has saved $100 million in energy costs since 2005 through water-saving and carbon-reducing initiatives. We've found that companies are missing huge savings in annual operating costs, so we're training MBA students as energy-efficiency experts and embedding them in companies to find cost-effective improvements. It's been a huge success.

You've said that a cap and trade system, which aims to curb carbon-dioxide emissions through economic incentives, will produce hundreds of thousands of jobs. How so?
When we make the energy high efficiency, low carbon, we can create all types of jobs—jobs that weatherize homes that create dollars that stay here instead of going overseas to pay for imported oil. We can create jobs that produce the materials for weatherization, we can create jobs to make wind turbines and install them. It's not only high-tech jobs we're creating, it's a tremendous number of jobs in existing, familiar businesses.

Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi have promised to bring cap-and-trade legislation to the floor sometime this year, but it still seems to be meeting resistance. Why is this issue still controversial?
There are differences and certainly there have been some objections raised but what's amazing to me is that we have a moment where a cap on carbon has tremendous momentum. I think there's a recognition that a cap will unleash the power of the market to not only find but also fund the best solutions to reducing global warming pollution and that the cap will cause a major injection of private investment to create jobs.

But isn't there a lot of opposition from companies who say it will drive up costs?
There are still some opponents. But there are now leading members in the oil industry, the auto industry and in the manufacturing segment who have united on a single plan to move forward. In the history of our country, we've passed a lot of major environmental statutes, but none have had anywhere near the support from the corporate community that we are seeing now.

What kind of damage has been done to the environment over the last eight years under Bush? Is it reversible or fixable?
The great untold story of the last eight years is the real progress made on climate-change policy at the state and local level. But we've lost a lot of ground—both in terms of the long-lived pollution we've left rising and unchecked for too long, and in very real economic terms. Other countries now have the upper hand in developing the technologies that will reduce emissions and power the global low-carbon energy economy. But I'm confident we can win the race if we get in soon.

What has happened since your book appeared in hardcover last year—have you seen any more momentum on environmental issues than before it came out?
I'd like to think that "Earth: The Sequel" is solely responsible for environmental issues rocketing to the top of the agenda in Washington, but I bet it has more to do with an avalanche of information that climate change is happening faster than expected and that our lack of an appropriate response is no longer tenable. A year ago we were gearing up for Senate debate over a climate bill that few expected to pass, and fewer expected to be signed by the president. We made significant progress, but Washington gridlock cut short the debate. Today, we have a president who is actively calling on Congress to send him a bill, and legislators are constructively engaged on a level I haven't seen in decades.

What kind of impact do you think the stimulus will ultimately have on the environment?
President Obama's Recovery Act was a huge down payment on what we need to do for the environment. It will give a major boost to America's clean-energy industries and help us catch up to our European and Asian competitors, who have jumped ahead of us in wind, solar, and other technologies. It's important to point out, though, that the president has said that these federal investments are not enough. We need the capital and creativity of the private sector focused on alternative energy if we want to overhaul our oil-addicted economy. That will only come when a cap on carbon pollution creates demand for clean energy.