PORTLAND — New England’s economic downturn is proving to be deeper and more persistent than expected, but the region can rebound through a green economy, one of Maine’s leading economists said Monday.

The green economy is in its infancy, as information technology was more than 40 years ago, said Charles Colgan, professor of public policy and management at the University of Southern Maine.

State and local governments can encourage clean-energy businesses that can drive the recovery, he said, through public policies that influence the price of oil. “Only by making oil more expensive will we unleash the market forces,” he said.

Colgan made his comments at the start of a three-day Council of State Governments/Eastern Regional Conference.

The nonpartisan group promotes multi-state and regional partnerships to address issues including energy, health care and transportation. It represents states from Maine to Maryland, Puerto Rico and the U.S. Virgin Islands, and six eastern Canadian provinces.

The latest economic recovery may be stalling, Colgan said. Earlier this year, economic forecasters thought New England’s job market would begin growing this year and get back to pre-recession levels by 2013. That outlook may be extended when forecasters meet again this fall, he said.

With consumer spending down, state and local governments are coping with an unprecedented plunge in tax revenue. Government can be more efficient, Colgan said, but it can’t provide past levels of service.

Following the deep recession of the early 1990s, the so-called dotcom technology boom left the country with a strong foundation for growth. After this recession, Colgan said, we’re left with foreclosures and excess housing.

That’s where the clean-energy economy can create a new foundation for growth. But it’s still unclear to what degree Northeast states and their Canadian counterparts can agree on regional strategies to develop renewable energy sources and transmission corridors to connect them to where the power’s needed.

Some of the issues were explored with Colgan and a panel that included Gov. John Baldacci of Maine, Gov. Jim Douglas of Vermont and Deputy Premier Frank Corbett of Nova Scotia.

“You have to control your energy resources, or someone will control your economy,” Corbett said.

Nova Scotia, for example, recently signed a memo of understanding to work with Maine on tidal and offshore wind energy research. Nova Scotia is trying to get hydroelectric power from a megaproject in Newfoundland and Labrador, but faces opposition from Quebec, which is promoting its own hydro resource.

That resource, from Hydro Quebec, provides one-third of the electricity in Vermont, and Douglas just signed a contract to extend the deal for 26 years.

Maine sees a smaller role for Hydro Quebec, one that doesn’t eclipse its desire to develop offshore wind energy for sale in southern New England and New York City. But Maine also wants to work with its Canadian neighbors, to offset the threat of wind energy from the Midwest someday serving New York. Baldacci wants Hydro Quebec to provide base load power, to complement the intermittent nature of wind.

“I feel we can incorporate both, but we need to do it in a balanced way,” he said. 

 

Staff Writer Tux Turkel can be contacted at 791-6462 or at: [email protected]