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At the edge of a cornfield, inside a sprawling, low-slung brown building, a Midwestern town’s dying economy is humming back to life. Newton, Iowa, population 15,000, was best known as the headquarters of the Maytag Corporation. For 113 years the two names were practically interchangeable. Maytag employed 4,000 local workers at its peak and underwrote many of the town’s athletic and cultural organizations. Factory workers swam in a Maytag pool, sent their kids to college on Maytag scholarships, and spent their union wages at businesses clustered around a neoclassic courthouse. Once a year families descended on leafy Maytag Park to watch the crowning of the Maytag Queen—inside an amphitheater called the Maytag Bowl.

“The town ran around Maytag,” says Jay Barnes, a bandana-wearing 56-year-old with blue eyes and a gray ponytail. “It was the big fish in a small pond.” Barnes spent 24 years assembling washers, dryers, and parts for the company, and his wife cleaned executives’ houses. That was before Maytag was bought by its competitor Whirlpool in 2006. The new owner shut down the Newton factories and offices, eliminating the last 1,800 jobs. Unemployment in the county reached 9.5 percent, the state’s highest. Local businesses began to flounder. Barnes found himself jobless—and “terrified,” he says. He searched for work for six months and learned that “at my age, nobody really wants to hire you.”

But now Barnes builds something closer to his heart than washing machines: resin-and-fiberglass windmill blades, as tall as 10- to 15-story buildings and resembling giant elephant tusks redesigned by a Scandinavian minimalist. With its flat expanses, Iowa is ideally situated for wind power, and the state and Newton have aggressively pursued companies that assemble blades, turbines, and towers. “The blade industry is the future,” says Barnes, who works for TPI Composites. “With the greenhouse effect happening everywhere, only a fool doesn’t see it.”

As the nation’s industrial base contracts—791,000 manufacturing jobs disappeared in 2008 alone—a growing number of community leaders are hoping to replicate the experience of Newton, where three renewable-energy companies helped stabilize the town’s economy by hiring more than 400 “green-collar” employees. Advocates say that by pursuing environment-friendly policies, the United States will not only chart a more sustainable course, it will also put people back to work.

“The green economy is a more labor-intensive economy,” says Van Jones, founder of Oakland, California–based Green for All, a group that links sustainable environmental policy with the fight against poverty, and now the White House special adviser on green jobs. “You’re relying less on big, dirty, polluting machines and more on beautiful people.” Jones sees opportunities, in particular, in cities and towns like Newton. “Where you have a lot of industrially zoned land and the remnants of an industrial workforce, a great deal of the greening process is about building stuff,” he says. “People talk about energy independence. Well, it’s not energy independence if you go from importing your oil to importing your wind turbines.”

After eight years as political outsiders, green-job advocates like Jones finally have an ally in the White House. President Barack Obama kicked off his administration with a stimulus plan that includes almost $100 billion in environmentally beneficial spending and tax breaks. That was just the prelude: Obama’s 2010 budget echoes his campaign call for a 10-year, $150 billion investment in renewable energy, habitat restoration, advanced biofuels, wildlife migration corridors, energy efficiency, and plug-in cars. “The choice we face is not between saving our environment and saving our economy. The choice is between prosperity and decline,” said President Obama when he visited the former Maytag plant in Newton on Earth Day. “We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.”

In his State of the Union address last February, Obama called on Congress to fund his program with a cap-and-trade system that reduces carbon emissions by auctioning off a shrinking number of pollution credits. He says the revenues from this plan will generate five million new jobs. “We know the country that harnesses the power of clean, renewable energy will lead the 21st century,” Obama said during the address. “To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.”

A slew of new research shows that environment-minded strategies really do produce jobs—and that staying the fossil fuel course could eventually bankrupt us. But historically, environmental protection and job creation have been cast as rivals. Policy choices were either-or: Either pass the Kyoto climate treaty or preserve five million jobs. Reduce industrial emissions or keep factories stateside. Save northern spotted owls or save loggers. It’s an ingrained trope in the American political dialogue.

But the past few years have seen a paradigm shift as environmentalists have finally come off the defensive. Backed by new data, they argue that earth-friendly initiatives are the very boost our economy needs, generating jobs while forestalling the cataclysmic upheavals that global warming threatens to bring.

“I don’t think there’s any question that with dependence on foreign oil, climate risk, the loss of manufacturing jobs, and now a meltdown of our financial system, we face enormous economic challenges,” says former California state treasurer Phil Angelides, who heads a labor-business-environmentalist partnership called the Apollo Alliance. “The question is: What’s the driving dream that’s going to propel the American economy in the 21st century? I look at the possibility of creating a green economy as America’s best hope.”

Last September the Apollo Alliance unveiled a $500 billion plan to shift the nation’s energy use toward wind and solar; improve the efficiency of existing power plants; modernize the power grid; build transit systems; develop high-efficiency vehicles; retrofit buildings to conserve fuel; and train workers for the five million jobs the Alliance claims will be created in the process. It’s a more ambitious scheme than Obama has outlined, and Angelides says federal support will be essential. “What’s striking about America,” he says, “is that at critical moments in our history, it’s been national policy that has driven us forward.”

Equally striking is the fact that, with little support from Washington, private-sector endeavors are already taking off. Ford is going to start building new car models at its Michigan Assembly Plant beginning next year. The company plans to make all-electric cars there by 2011.

While metropolitan Portland, Oregon, has lost manufacturing jobs, 65-year-old Oregon Iron Works in nearby Clackamas is building equipment to harness ocean-wave energy and fabricating the first modern-style domestic streetcars. With cities like Washington, D.C., and Portland equipped with streetcars from a Czech company, Oregon Iron Works could compete with them for business in the future. “We’ll be trading European suppliers with U.S. suppliers,” says company vice president Chandra Brown. Both projects are in the prototype stage, but Brown says they will generate union jobs for iron workers, electricians, and machinists that pay about $20 an hour.

In Pipestone, Minnesota, a town that saw its population drop by 10 percent between 1990 and 2007, to about 9,300, publicly owned Juhl Wind has helped local farmers develop their own commercial-scale wind farms. “It takes very little [land] out of ag production,” says CEO Dan Juhl, and “it creates a whole new cash crop called electricity that provides an income stream no matter what happens to the price of other commodities.” In 2006 the Indian company Suzlon built a turbine factory in Pipestone that currently employs 400. Jobs are so plentiful that the company buses in workers from Worthington, an hour away.

Green-collar training programs are cranking up all over. In New Jersey, Newark’s government teamed up with the Laborers International Union of North America to teach fledgling construction workers how to weatherize the city’s post–World War II housing stock. The first 14 trainees, many from a prison reentry program, earned $15 an hour insulating senior citizens’ homes. “We instill in them a sense of giving back to the community,” says Pastor Thomas Reddick, who runs a nonprofit construction company. “The jobs bring financial support, but it’s really about dignity.”

Few people in Newton were thinking green when Whirlpool bought Maytag in 2006. The central Iowa town was rooted in its traditions: butterscotch malts at the Snook Inn (“Since 1939”), nighttime card games at the Rialto Barber Shop, and factories churning out appliances for American homemakers. Maytag jobs were considered as reliable as its washers, and Plan A was to keep those jobs from leaving. “Even though I knew in my gut that the majority of it was going, I still thought there were opportunities to make a business case to stay here—at least some pieces of it,” says Kim Didier, former executive director of the Newton Development Corporation. “Even though you anticipate the call”—announcing a complete pullout—“it still takes your breath away.”

Didier, an athletic 43-year-old with a short haircut and an all-business demeanor, remembers the months after Maytag’s pullout as “gut-wrenching.” Some of her friends moved away to work at Whirlpool’s Michigan headquarters, leaving “the rest of us stuck here, trying to figure out how to make it through.” As the head of a one-person economic-development office, Didier was so overwhelmed by responsibility that at times she felt physically sick.

Still, Didier flew into action, joining with other local leaders to create the Newton Transformation Council. One of their first acts was to hire David Beurle, a rural economic-development specialist from Australia, to help Newtonians rethink their future.

Beurle is tall and mop-haired, with an easy smile and a kinetic presentation style. He arrived in Newton to find a company town in mourning. “You had this enormous culture of dependency,” he says. “There was always a clear pathway for people.” Now that pathway was gone. When 300 people showed up for a Town Hall meeting, Beurle tried to move them past their grief. “The world you’re going into is distinctly and profoundly different from the world you’re coming from,” he said. Yes, that seems “daunting,” he explained, but “it’s also an opportunity.” Beurle described life after Maytag as a maturing process, like a tadpole’s metamorphosis. “What kind of frog do you want to be?” he asked.

As residents discussed possible futures, renewable energy naturally surfaced. Iowa officials had been promoting “energy independence” as a job-creation strategy. A startup firm called Central Iowa Energy had begun hiring former Maytag workers for a plant that would turn vegetable oil and animal fat into biodiesel. Windmills were producing power elsewhere in the state. Add Newton’s pool of skilled manufacturing workers, Beurle says, and “people were able to connect all the dots and say, ‘God, this is a sweet spot here.’ ”

That day the Newtonians crafted a vision statement that said, in part, “We strive to create systems that fuel the world with renewable energy.” Local officials set off to recruit wind companies.

Meanwhile, TPI Composites, which supplies blades for General Electric turbines, was looking for a domestic manufacturing site. With wind power growing exponentially in the Upper Midwest, it was not cost-effective to ship six-ton blades from its factories in Mexico and China. “Proximity matters,” says the Newton plant’s general manager, Crugar Tuttle. TPI liked Newton’s location and workforce, and government incentives helped clinch the deal.

The facility opened in September 2008: a brightly lit hangar of a building with high ceilings, steel beams, and concrete floors that supervisors traverse on bicycle and tricycle. Working around the clock and weekends in four shifts, workers cut large, silky fiberglass sheets and lay them onto enormous sea-green molds along with resin and glue. The molds are folded shut, heated, cured, and finally sanded and painted. “It’s a craft,” says human resources manager Terri Rock—and indeed the place feels more like an indoor shipyard than a factory. That’s no surprise for a company founded as a boat maker.

For Barnes, the former Maytag employee, working at TPI has meant coming full circle. In the 1970s he installed solar panels and small wind generators, but the timing was wrong and his employer went under. A devotee of Mother Earth News, Barnes waited for a time when renewable energy would become viable. TPI’s arrival, he says, “brought back hopes in my mind that the world’s coming back around.”

One area where TPI does fall short is wages. At $13 to $15 an hour, it doesn’t match the union scale Maytag offered, which typically exceeded $20. Still, the pay is competitive for the county, where entry-level manufacturing wages average $14.39. Plus, working in Newton—rather than Des Moines, 35 miles away—means shorter commutes. “You’re not going to make much more anywhere,” Barnes says. “And you’re going to have to pay that big gas bill.”

TPI now employs 318 Newtonians and expects to reach 500 by year’s end. Another GE contractor, Dallas-based Trinity Structures, has moved into a former Maytag factory in Newton and is staffing up toward 140 employees. Counting the biodiesel plant’s 24 workers, Newton has become something of a green-collar hub.

What’s ironic, says Charles “Chaz” Allen, Newton’s mayor, is that the town never set out to become an environmental leader. “Jobs were our focus,” he says. “TPI and Trinity changed our mindset.” With so many alternative-energy companies nearby, residents have started discussing how they can reduce their own fossil fuel consumption. “We talk about, ‘How do we get a windmill put up in Newton?’ ” Allen says. “Two years ago we would have never had those discussions.”

Is what’s good for Newton also good for America? Clearly that’s President Obama’s assumption as he focuses much of his job-development efforts on the green-collar sector.

The stack of studies confirming Obama’s thinking grows taller each year. In September researchers at the University of Massachusetts-Amherst forecast that a two-year, $100 billion federal investment in renewable energy and energy efficiency would generate two million jobs “across a broad range of familiar occupations,” including welders, electricians, truckers, and scientists. (The report was co-published by the Center for American Progress, a progressive think tank.) Clean energy is more labor-intensive than fossil fuels, says Robert Pollin, co-director of the university’s Political Economy Research Institute, and more of those jobs will be in the United States.

Other researchers using different models have arrived at similar conclusions. University of Tennessee agricultural economist Burton English found that extracting one-fourth of the nation’s energy from crops like switchgrass would generate 5.1 million jobs by 2025, most of them in rural communities. Suzanne Tegen, a researcher at the National Renewable Energy Laboratory, looked at Arizona, Colorado, and Michigan and concluded that new wind-power facilities would benefit the states’ economies more than fossil fuel plants. In February, Vice President Joseph Biden’s office released a report saying that green jobs pay 10 to 20 percent more than other jobs of all types—in some cases up to $50 an hour in wages and benefits.

“Green-job creation is not some kind of myth,” says Dan Kammen, a professor in the Energy and Resources Group at the University of California, Berkeley. “It’s not a small effect. We find that there’s three to five times more jobs generated per dollar invested in green technology than when you do additional fossil fuels. It’s a significant producer of new economic activity.”

Such calculations don’t even factor in the cost of not going green. In 2006 Sir Nicholas Stern, former chief economist for the World Bank, investigated the consequences of climate change for the British government. He reported that a two- to three-degree Celsius temperature rise could depress global economic output by up to three percent by killing fish, reducing water supplies, lowering crop yields, and displacing people along coastlines. At a five- or six-degree rise—which Stern says “is a real possibility for the next century”—the loss could reach 10 percent. Increases above that “would take us into territory unknown to human experience,” Stern wrote, “and involve radical changes in the world around us.”

Even so, the green future has its skeptics. Last year the American Council for Capital Formation (ACCF), a business group that favors smaller government, and the National Association of Manufacturers released a study arguing that a shift toward cleaner energy would shave up to 2.7 percent off the gross domestic product and cost up to four million jobs by 2030. “Wind, solar, and biomass are still more expensive than conventional fuel,” says Margo Thorning, the ACCF’s chief economist. Under a green strategy, she says, “the gears of our economy are gummed up by higher energy prices. That means industries that depend highly on energy tend to move, if they can, to countries where they don’t have these kinds of restrictions. You get more jobs in renewables, but you’re going to lose jobs overall because the economy has got a ball and chain around its foot.”

Other economists, though, insist the ACCF’s study is based on a pessimistic view of human behavior. “All of these models freeze the economy and don’t allow for adaptation, innovation, and technological change. So they always spit out horrible results,” says natural resource economist Thomas Power, a professor emeritus at the University of Montana. “They’re defaming market economies and entrepreneurial innovation by acting as if we’re all morons.” Even if the ACCF model holds true, Power notes, it still forecasts rapid growth under all scenarios—“but ever-so-slightly slower growth” with renewables. “The outcome they depict is in no way some sort of economic catastrophe.”

Moving toward a green economy will take steady government commitment, something that until now has been missing. “Let’s face it, the United States was really the leader in most of these technologies in the beginning,” says Marlene O’Sullivan, an industrial engineer at the German Aerospace Center in Stuttgart. “Then it just didn’t make it anywhere because there was no support politically.”

Americans get four percent of their electricity from wind, solar, biomass, and geothermal sources. Germany, by contrast, derives more than 10 percent of its electricity from these sources and plans to pass the 25 percent mark by 2020. A “feed-in tariff” allows Germans who generate their own renewable power to sell some of it back to the grid at above-market prices (see “Clean Break,” March-April 2009). The government also underwrites photovoltaic research and provides incentives for companies to locate in financially beleaguered eastern Germany. That has turned the east into a solar hotbed—“a minor Silicon Valley,” says Ulrike Lehr, an economist and physicist at the Institute of Economic Structures Research in Osnabrück.

Feed-in tariffs have now triggered interest in the United States. In Florida the Gainesville Regional Utility implemented the nation’s first tariff, in March, starting with 27 businesses and eight households that use solar energy, according to theGainesville Sun. Similar schemes are under consideration in states including Michigan, Oregon, California, Hawaii, and Washington.

Perhaps the most critical piece of a clean economic-development strategy is a massive federal investment in research and infrastructure. Green jobs will largely come from the private sector, but currently not all renewable energy is financially competitive with cheap fossil fuels like coal. It will be up to the government to tilt the balance. That’s why green-job advocates eagerly followed President Obama’s stimulus legislation as it progressed through Congress last winter. Many were pleased by the results. By the Center for American Progress’s middle-of-the-road calculation, the $789 billion package includes $71 billion in spending on clean energy projects and $20 billion in tax incentives for projects that benefit the environment. “It is actually the largest single topical component of the stimulus package,” notes Kammen, the Berkeley energy professor. “This in itself is remarkable, and is more than then-candidate Obama called for.”

A good chunk of the money goes to energy efficiency, including $5 billion to weatherize houses, $4.5 billion to renovate federal buildings, and $6.3 billion in grants to state and local governments. The bill also includes $17.7 billion for transit and rail construction, $11 billion to modernize the electric grid, and $6 billion in loan guarantees for renewable-energy projects. It sets aside $500 million for green-job training. It funds research into renewables, efficiency, automobile batteries, and carbon sequestration. Obama says the stimulus will double the nation’s renewable-energy generating capacity over the next three years.

The stimulus bill does not fundamentally change the structure of the market, which favors cheap fossil fuels by failing to put a price on carbon. Obama plugged a cap-and-trade system, which would reverse that equation, during his State of the Union address and again in his budget plan. With Democrats divided by region, the question of whether to auction off greenhouse-gas permits might prove one of the most bracing debates facing Congress.

More likely to pass this year is legislation requiring that a specific share of the country’s electricity come from renewables. “If we are going to make the changes we need, conservation cannot be an act of personal virtue and renewable fuels cannot be luxury alternatives,” said Senator Tom Udall (D-NM), who sponsored one such bill calling for 25 percent by 2025, in a recent floor speech. The Union of Concerned Scientists estimates a national mandate like Udall’s would create at least 185,000 jobs.

As the debates unfold, Newton mayor Chaz Allen will be following them closely. With the trio of new businesses, he says, “we’re getting our confidence back.” The transformation, he believes, is hardly finished. “If the federal vision comes to fruition, I think there will be more jobs in Newton than when Maytag was at full song.” Allen imagines not just more windmill manufacturers but also their suppliers, along with solar companies and more biodiesel producers.

“It could be a whole renewable-energy center,” he says. “We can put American people back to work.”