Analysis: A missed opportunity to make 'green' pay

The stimulus plan announced last week made no explicit mention of environmental projects, which could prove costly in the long run.

fischer steinitz 88 248 (photo credit: Ariel Jerozolimski)
fischer steinitz 88 248
(photo credit: Ariel Jerozolimski)
The economic plan unveiled last week by Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz failed to explicitly mention support for any "green" projects. This contrasts with other stimulus packages, such as those unveiled by the EU and the US, which specifically set aside billions of dollars for green infrastructure. While the Israeli plan is still mostly just topic headings without details, one of those headings could easily have been cleantech and greentech. A green focus would seem tailor-made to Israel's problems and capitalize on its unique strengths. It would also have shown Israel's commitment toward fighting climate change and moving towards sustainability - something which Europe and the US would no doubt have received favorably. Major environmentalists have begun espousing the value of creating the infrastructure today to create a sustainable tomorrow. Not only would those efforts lead to immediate efficiency savings, but as the world puts more money into such infrastructure, the increasingly expensive fossil fuel economy could be replaced. Netanyahu and Steinitz mentioned reforming the electricity market - mainly by breaking the monopoly enjoyed by the Israel Electric Corp. But one of the major planks of an environment-friendly stimulus policy is energy efficiency. And while the National Infrastructures Ministry has pushed through a government decision on the matter, explicit mention in a stimulus package could have given it a real boost. Netanyahu also mentioned opening up the electricity market to private companies. Solar power companies would fit that bill - not to mention the security benefits of a domestic source of energy and less reliance on the import of fossil fuels. Looking at the plan's subject headings, however, there is room for greentech and cleantech to benefit. The plan, for example, calls for support for the hi-tech sector. Cleantech and greentech could be construed as part of that sector. Explicit mention of them, however, could have given a boost to an emerging new export market for Israel. Instead, the prime minister chose to stress his determination to prop up what some have diagnosed as a hi-tech industry which has basically plateaued. Green companies would also no doubt benefit from the proposal to increase credit to finance R&D and production. In the infrastructures section, there was mention of investment in several environmentally important sectors such as public transportation and the water economy, in addition to the electricity market. The water economy in Israel is in desperate need of an overhaul to conserve as much water as possible. Every day, a new study emerges as to how the country can conserve hundreds of millions of liters of water now, in the period before the desalination plants come online. Israel is also a world leader in water technology, so supporting and encouraging investment could be a positive export factor. In 2007, more than half of all water technology deals in Europe were concluded with Israeli companies. The water industry worldwide is worth about $400 billion, and Israeli companies could be poised to capture a respectable chunk of it. Public transportation projects in Israel would reduce air pollution significantly. Projects in major cities like Jerusalem and Tel Aviv have been delayed by years, forcing more and more people to use private cars. As a result, air pollution in the crowded Dan Region has reached dangerous levels. The plan also calls for luring Israeli scientists home. No doubt some of these scientists would be interested in environmental fields and could put their expertise to good use. Reforming the Israel Lands Administration would potentially have an indirect benefit on solar energy in Israel. Solar energy companies have been in serious discussions with the ILA about granting land for solar fields. Any reform would no doubt make that process swifter and more partial to the solar energy companies. It is promising to note that Environmental Protection Minister Gilad Erdan announced Sunday he would propose to budget NIS 50 million annually for the next three years to support environmental technologies. So while there is room for "green" to fit into the new stimulus package, we will have to wait and see whether Netanyahu and Steinitz will seize the opportunity to further this effort. Last week, however, they seemed to have missed an opportunity to give a great push to internal efforts to turn that green corner. Furthermore, with so much money in foreign stimulus packages being earmarked for cleantech, they missed the chance to place Israeli companies in a better position to access that money and funnel it into Israel's economy.