2. The Green Economy

At its most basic level, the green economy is the clean energy economy, consisting primarily of four sectors: renewable energy (e.g. solar, wind, geothermal); green building and energy efficiency technology; energy-efficient infrastructure and transportation; and recycling and waste-to-energy. 1 The green economy is not just about the ability to produce clean energy, but also technologies that allow cleaner production processes, as well as the growing market for products which consume less energy, from fluorescent lightbulbs to organic and locally produced food. Thus, it might include products, processes, and services that reduce environmental impact or improve natural resource use.

Our review of 25 regional and national reports on the green economy (see Further Reading) found that though few bother to define the green economy, all agree that clean energy is its core. The reports vary in how much they emphasize environmental and/or job quality. The switch to clean energy will of course improve environmental quality by reducing greenhouse gas emissions and impact sustainability by reducing energy use. However, just 16 of the reports mention transportation and infrastructure as part of the green economy, despite the key role of built form and city planning in shaping energy use. Only the reports by Apollo Alliance, Green for All, and the Center on Wisconsin Strategy focus on job quality, typically defined as well-paid jobs with benefits and opportunities for advancement.

Figure 1 shows our conceptualization of the green economy. The green economy map groups green businesses into 17 categories, based on a review of industries mentioned in the 25 reports. It also highlights how frequently each industry sector is mentioned in the reports (with the darkest shades representing the sectors cited most frequently). The map presents the range of green business categories along two axes. The vertical axis shows the range from traditional businesses, such as utilities, and professional services that are greening their operations, to businesses in emerging industries, such as nanotechnology research, solar panel manufacturing and eco-tourism. On the horizontal axis, businesses move from those that produce green products, such as manufacturers and food processors, to those that sell green products or participate in the green lifestyle economy, such as farmer’s markets and local park maintenance operators.

Production industries produce goods that can be exported and imported between regions. Lifestyle or consumption
businesses are local-serving only. Business categories located in the middle of the horizontal axis contain both production and consumption aspects. Within the green economy, businesses interact with and are influenced by the government agencies, universities, non-profit organizations, unions, utilities and trade associations in the regional innovation system (shown at the bottom of the diagram).