If “going green” is to succeed in corporate America, government at the local, state and federal level must incentivize energy efficiency for entrepreneurs and small businesses. Large corporations are implementing green initiatives to maximize revenues and marketing, indicating that the business of environmental sustainability is on the rise. Companies such as Honda, Goldman Sachs, Bank of America and General Electric are all on the bandwagon, from reducing paper use to cutting carbon emissions at manufacturing plants. But the engine of America’s economic growth, small businesses, are challenged by the obstacles they must surmount to accomplish energy efficiency.
Deep into the recession, entrepreneurial startups are actively building on the sustainability platform, allocating venture capital to wind farms, solar panels, and “smart” electricity grids. They are young 20-somethings who are creating uncontested market space which will transform industries for decades to come. Despite their ambition and business acumen, they don’t yet have an effective regulatory framework to support their initiatives as part of a strategic plan.
With the Markey-Waxman Bill slowly proceeding to the U.S. Senate for a vote, local and state governments must increase their regulatory support for clean energy entrepreneurs. For example, if an entrepreneur is starting a web-based software company, there is no physical product or manufacturing capacity. Green companies on the other hand, need large amounts of capital and investors embedded in experiential science and government policy. The complex intersection between business, science, regulation and policy is no more evident than in the green industry.
While some states have stepped forward, for example, tax and grant incentives, carbon credits and various subsidies offered by New Jersey are some of the most generous in the country, states must streamline the process for green companies, based on the product such as solar or wind. They should establish a comprehensive guidepost for understanding the regulatory and policy frameworks in which green companies must operate. This streamlined process should explain to the new entrepreneur how to structure the business, raise capital, and ultimately, take advantage of government policies in effect.
Going green is a complex process that includes the implementation of new technologies and specialized training. There is no guarantee of an immediate profit due to the experimental nature of the work. While states are severely constrained by budget deficits, if they want to generate future revenues from emerging industries and building advantages over India and China, then spending on clean energy entrepreneurs should be considered an investment. Large corporations, while notable in their efforts to incorporate clean energy mechanisms, can only do so because then can afford to. Budding entrepreneurs should be able to match, if not surpass, them in their efforts to reduce America’s carbon footprint.
Sheheryar T. Sardar is a Partner at Sardar Law Firm, LLC.
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