At least since Adam Smith's era, every nation in the world has used low cost, government supported loans to help pay for critical projects necessary for economic development. This is how in the United States we built the Erie Canal, fought wars, and constructed schools. And now we need a Green Bank to support low cost loans that steadily over twenty years, starting right away, will finance the conversion of America's energy industry from carbon to clean.

That is why more than fifty businesses have come together to form the Coalition for the Green Bank, of which I am the co-chairman. We have received expressions of support from many business lobbies as well as the Center for American Progress and environmental groups. Congressman Chris Van Hollen proposes to charter our Green Bank through legislation he has introduced in the House Ways and Means Committee. Our immediate goal is to have that Committee pass the Van Hollen Green Bank Act either as a standalone measure or as an amendment to the monumental Waxman-Markey bill passed by the House Energy and Commerce Committee and now referred to Ways and Means.

Our Coalition also supports the Energy and Commerce Committee for including Congressman Jay Inslee's version of the Green Bank in its legislation, and we honor Senator Jeff Bingaman for including a green bank in his tremendous energy legislation.

Nothing is more critical for our children than bringing an end to the continuing destruction of our environment by carbon dioxide, and Green Bank financing would take American emissions levels below the targets we hope to see the world adopt in the Copenhagen discussions at the end of the year. But even in the immediate present no single action can give us more of the new jobs that fight the dire recession than massive and steady investment in alternative energy generation and distribution. Green Bank financing will produce one to two million additional jobs for the next two decades-- this is the amount by which the work force will have permanently increased.

Nor can we take any wiser steps toward a sound foreign policy than moving our energy industry from dependence on foreign oil and gas to an independent foundation in sun, wind, tides and other renewable sources. We estimate national security savings of $500 billion a year when an electric transportation system is achieved. Jobs, national security, and - of course - saving the environment from catastrophe are three targets pierced by the sharp-pointed arrow of the Green Bank.

The goal of any nation's energy policy is abundant, cheap and safe power, heating, cooling and lighting. The means to that goal must be (1) use of clean, not carbon-based, energy generation coupled with (2) low cost generation and (3) efficient energy use. It is not necessary to raise the price of electricity generated by clean energy in order to achieve these goals.

Similarly, in the early nineties, our national goal was widespread, cheap communications service. Thanks to the new technologies of the capital Internet and cellular, investors put more than $850 billion into new networks between 1997 and 2007. But in these markets, the economy enjoyed rapidly growing demand for new services. By contrast, the first obstacle we face in the Great Conversion from carbon to clean is the lack of new demand for electricity. Because of the bad news of economic downturn and the good news of government-stimulated efficiency measures, business and residential customers are not demanding electricity in volumes that require new capacity. Current projections show that the carbon-based electricity generation industry of today does not need much in the way of new supply sources until perhaps 2015 to2016. By contrast, the growing economies of China, India and Southeast Asia require new energy sources, and we need them to agree by treaty and trade deals to use clean energy.

But meanwhile back in the USA the government needs to oblige utilities and other users to buy clean energy. This is the purpose of the Congressional proposals of Renewable Electricity Standards (RES) - a requirement to buy clean energy. And to encourage firms to convert from carbon to clean Congress should also pass the Carbon Caps contained in Waxman-Markey. Under RES and Caps, businesses will have to buy clean energy and phase out polluting energy sources - and the Green Bank will assure that the shareholders of these firms and the consumers who buy from them will not pay a higher price for energy as a result of these measures. It is reasonable to aim at creating new clean generation capacity amounting to 20 to 30 Gigawatts a year-- which is about 2-3% of existing national capacity. As new clean capacity increases beyond what the current demand requires, existing polluting capacity would be phased out-- while the Bank holds shareholders harmless. There is no need to punish the companies that should lead from best conversion from Carbon to Clean.

Moreover, the Green Bank will attract private sector investment in clean energy. The Bank should provide $500 billion in equity investment. This trillion dollars-- over twenty years-- will suffice to save our economy and environment.

Government does not need to buy or bail out existing energy companies. It does not need to become a principal equity investor in alternative energy. It needs only to assure that loans are made to willing private investors and that these loans are made at very low interest rates, so that consumers don't have to pay higher prices in order to persuade understandably anxious investors to put their money into wind, solar, geothermal, and the other clean energy facilities that will put us on the path to new jobs, secure energy, and a safe environment.

Nor will the Green Bank cost taxpayers money over time. If the Treasury funds the Green Bank with only one to two percent of the amount of bonds it will sell over the next twelve months, that fifty billion dollars in cash on the clean balance sheet of Bank will underwrite debt financing that will have a very low default rate. The reason is that the Bank will finance only projects where the demand is guaranteed and the revenue sure to come in - because RES and Caps will require the utilities to switch from carbon to clean.

And the Bank will not replace private financing. Instead it will be a nonprofit wholesale bank that facilitates sensible, safe, reliable lending by retail banks making a healthy, reasonable profit on this activity. We expect that the Green Bank will generate hundreds of millions of dollars of profitable, predictable revenue for retail banks- which is exactly the sort of stimulus to lending that the economy needs. In order to improve our economy now, obtain energy security later, and save our environment forever, the Green Bank should be chartered by an act of Congress - this summer.

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Reed Hundt is co-chairman of the Coalition for the Green Bank.