DRILLING FOR GREEN CAPITAL: A Policy Study on Stimulating a Green Economy in the State of Texas

Abstract

Policy at the state level plays a vital role in shaping economic growth. Some states, such as Pennsylvania, have actively enacted policy to stimulate a green economy. This report is a comparative case study of existing policy mechanisms for economic development in Pennsylvania and Texas. Pennsylvania has focused on economic opportunities in environmental initiatives, such as brownfield redevelopment and the cleantech industry. The Keystone Principles and Keystone Green Investment Strategy are examples of key policy tools utilized in Pennsylvania to stimulate the economy and conserve natural resources. Texas has a very strong economy, but relies heavily on energy intensive industries. The state has a strong policy agenda of economic development and business recruitment. The date collected for this case focuses on these strengths. Policy mechanisms that have built the state’s economy include the Industry Cluster Initiative, the Economic Development Bank and the Texas Enterprise Fund. The Pennsylvania case study data is used to develop recommendations on how to design and deploy incentive structures for green businesses in the State of Texas. The policy study discovers existing programs in Texas correlate with Pennsylvania’s policy mechanisms. A key element in Pennsylvania’s programs is environmental criterion to conserve natural resources, a ‘green criteria’ or ‘green objective.’ The purpose of green criteria is to weigh in on the environmental impacts of economic activities. Three recommendations are presented for Texas:

Incorporate a green objective in the Industry Cluster Initiative.

Target business services to address critical needs in green sectors.

Create an Energy Office in Texas’ environmental protection agency.

These recommendations incorporate green objectives as enhancement strategies into existing programs. Instituting a green objective economic development will an important direction for Texas to maintain its competitive advantage on the global market in recruiting green businesses.