Green Jobs: Boom, or Bust?
Everyone’s talking about jobs these days, from President Obama to the Republicans competing to take his.
Green jobs in particular have dominated recent news coverage with many of the headlines featuring a common theme: A bust.
Seattle’s home weatherization program, Solyndra’s bankruptcy, and a recent New York Times Op-Ed by columnist David Brooks all follow the same script: billions in stimulus dollars aimed at growing the green sector have failed to make a meaningful dent in the unemployment rate, which as of August stood at 9.1 percent.
But, while the success of federal stimulus funding—both in terms of green jobs and otherwise—is indeed debatable, the ability of the private sector to create hundreds of thousands or even millions of green jobs provides a more promising outlook for future growth.
First, although two large U.S. solar panel manufactures recently shut down their plants, the solar industry at large is most certainly not going bankrupt. U.S. solar photovoltaic installation increased by an impressive average annual rate of 64 percent between 2005 and 2010, with over 70 percent of the value produced domestically.
Globally, the solar industry has grown at an even faster rate, with revenues reaching $82 billion in 2010, up from around $17 billion in 2007. This growth will almost certainly continue as the levelized cost of solar is rapidly reaching grid parity. It’s estimated the U.S. already has over 90,000 direct and indirect jobs in the manufacture and installation of solar panels. That’s more than in either steel production or coal mining (not including transportation and power plant employment).
Second, counting similar jobs in wind power adds another 85,000 jobs to the renewable energy sector. These figures are impressive considering wind and solar energy only provide around 2 percent and less than 1 percent, respectively, of U.S. electricity today. (To compare jobs available in a renewable dominated future verses our current fossil fuel reality, labor intensities can measure the amount of jobs supported by a given amount of electricity generation. Intensities vary depending on the generation technology and are used to compare and predict job creation or loss. UC Berkley has published a great analysis of labor intensities in the electricity generation sector.)
Finally, energy service companies (ESCO) provide a great example of how the green economy is driving job creation. The ESCO business model involves performing an energy audit to identify energy and money-saving efficiency opportunities. The ESCO then implements and maintains these efficiency improvements as the energy savings are used to payback the capital cost of the improvement. In this way, the ESCO transforms efficiency improvements almost directly into profits and employee wages.
In his editorial, Brooks cites two figures, both from government stimulus programs: $245 million in spending resulting in an estimated 1,250 jobs. Compare these numbers to the building efficiency sector as a whole: A 2010 Lawrence Berkley National Labs bottom-up study found that an industry with $18 billion in revenue supported 114,000 full time equivalent jobs (and these numbers do not include manufacturing, wholesale, or retail distribution).
Mobilizing the private sector toward the new energy economy
Efficient energy use and clean energy production are the foundation of a market-based, cost-effective pathway for American businesses to out-innovate competitors, revitalize the economy, boost exports, and ultimately, create jobs. As Rocky Mountain Institute outlines in Reinventing Fire: Bold Business Solutions for the New Energy Era (slated for publication late Oct. 2011), these opportunities make sense and make money, with no new taxes, subsidies or federal laws.
The green jobs available today are just the beginning. RMI details the potential for a more robust economic future by 2050, without oil, coal, nuclear energy, one-third less natural gas, and no new inventions, all at a cost $5 trillion less than business-as-usual. (View our infographic to see the full details.)
In RMI’s recent poll, jobs creation was selected by readers as the second-most important reason to move towards the new energy era. What do you think are the keys to unlocking these jobs? Take our poll, and comment below.