Smart Growth: Three Simple Steps to Help the Economy and the Planet

02/14/2009 05:12 am ET | Updated May 25, 2011

As the Obama administration prepares to take on the worst economic crisis in 80 years this week, it is putting the emphasis on a promising new principle: don't just stimulate old, petroleum-hungry growth -- stimulate smart growth.

That won't be easy. It requires that we change old entrenched ideas on both the right and left in the nation's capital. But crisis is opportunity, and provides a rare chance for straight talk between Congress and the new administration: Don't just hyper-stimulate the economy with another shot of economic caffeine to drive one last consumptive push. Nourish the economy, with green growth that can be sustained for the next century. That means planting the seeds of new low-carbon technology, so that within a generation we can defeat our real enemy -- petroleum addiction -- and offer our children a future rich in economic, social, and environmental terms.

There are three ways we could do this:

First: Smart Economic Stimulus. Instead of pouring money into every old at-risk industry -- invest it by replacing our aging industrial infrastructure with low-carbon successors: LEED-certified (energy efficient) buildings, mass transit, an efficient energy grid and water infrastructure, and community redevelopment based on the principles of local smart growth -- high density, integrated development that enables people to live rich lives without being addicted to their cars.

Second: Smart Tax Reform. Taxes aren't just too high, they're too dumb. Whenever we put a tax on something, we get less of it. Yet, incomprehensibly, we continue to tax the things we want more of: income, jobs, and savings. Economists used to like that -- they thought taxing good things was "neutral." But it's not. In a resource-constrained world, it's much smarter to cut taxes on what we want -- like jobs -- and make up the difference by raising taxes on things we want less of: carbon, pollution, and waste.

Third, Smart Technologies. When people think of clean green technology, they usually think of solar energy, wind power, and electric cars. That's true, but just the tip of the iceberg. The real clean technology is the huge Information and Communications Technology (ICT) sector -- the Internet, web, data centers, servers, computers, software, cell phones, Facebook, Twitter and so on. It's also the emerging bio-economy, which is learning how to grow smart materials and fuels, rather than just spending down the global resource ATM. ICT and bio-based technologies cut the costs of traditional manufacturing, and can make our auto and other factories competitive again.

Sure, these technologies use energy and create pollution -- but as much as 80% less, per unit of value they create, than the systems they replace. If the U.S. can build on its leadership in ICT and the bio-economy, it can drive 5% or greater annual growth in energy and carbon productivity across the economy, all while saving money and creating real value. That alone, over the next 45 years, would drive down carbon per unit GDP by almost 90% -- and total carbon pollution by as much as 75%, depending on how fast the economy grows.

That's not as audacious as it sounds. Last century, faced with a shortage of labor, we drove a 40-fold gain in labor productivity. This century, to save the planet, we need an eight- or ten-fold growth in energy productivity, scientists say. It's doable -- and investors, students, and job seekers take note: there is a lot of money yet to be made in ICT, the bio-economy, and even the industrial economy, as we use these technologies to make it smarter.

Today's Luddites seem to think we have to grasp hold of all the oil we can, as it springs from the ground, just to keep our old 20th Century style affluence. They think petroleum is the basis of our economic prosperity, but it is not. Innovation is. A century ago, petroleum just happened to be a cheap source of energy, so we used it. But it's hardly the only elixir of wealth. Today it's the opposite: a drain on our wealth that drives conflict, threatens the planet, and stifles real growth, and the technologies that can sustain it.

By embracing smart spending, taxes, and technology, we can defeat our real enemy - petroleum addiction -- and enjoy green, sustainable growth.

Bill Shireman is President and CEO of Future 500, a network of corporate leaders who engage together and with stakeholders to develop collaborative solutions to economic, social, and environmental challenges. He can be reached at, 1-800-655-2020, or