Green Jobs and "Buy America" Laws

The Wall Street Journal [1] explains why "Buy America" provisions and domestic preferences will likely be integral to making sure the green energy revolution actually happens in our country - and isn't outsourced:

Congress is beginning to fear that the Obama administration's push for renewable energy will produce more jobs in Asia and Europe -- where most wind turbines and solar panels are made -- than in the U.S.

The proposed remedy is a provision in the economic-stimulus bill that offers tax breaks to U.S. producers of the equipment.

Sen. Jeff Bingaman (D., N.M.), chairman of the Energy and Natural Resources Committee, is urging support for a provision in the Senate version giving a 30% tax credit to companies that expand or build U.S. manufacturing facilities geared to renewable energy, clean transportation or electric-system upgrades.

"Several of us have come to recognize that we've outsourced the very things we're going to need to change the nation's energy mix, and this is a way of encouraging more manufacturing here at home," Mr. Bingaman said.

The situation highlights a weak link in U.S. industrial policy: Although tax credits are offered to those building renewable-energy projects, there are no comparable incentives for domestic equipment makers.

Oddly, tax credits for domestic manufacturers - as opposed to Buy America laws - aren't portrayed as "protectionism" even though they are just as much a subsidy as targeted procurement policies. I'm not quite sure why that is.