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Sep 14, 2011

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.


Showing 1-10 of 10 comments

September 21, 2011

As an off-grid users of both solar and wind power and having been the one of the first contractors in Southern Cal to install solar water heating systems almost 50 years ago I have some experience with these solutions.

The problem is not that green jobs cannot be created, is it that they cannot be mandated. For green jobs to be created the economy must create them,; they cannot be mandated. Of course everyone will cry about carbon emissions as the reason to force green. The reality is that by forcing green in the USA we lose regular jobs on a huge scale. We cannot compete in an international market when only the USA bites the bullet and tries to green up. Sure there are worldwide agreements but who is actually doing the task?

Alternatives to fossil fuels will only create jobs when they are producing power at a cost far closer to the use of fossil fuels. If you believe that CO2 is a greenhouse gas and that greenhouse gas is the cause of the earth's warming then it would be beneficial to go green. If CO2 and the concept of greenhouse gas as a factor in the earth's warming is false, then forcing green is doing nothing but destroying the American economy as it has for the past 30 years or so.

Regardless of your belief in greenhouse gases, we cannot survive when spending far more for energy than other countries. People scream "save the planet" but are seldom ready to put their money where their mouth is. I'm not off-grid to save money because it costs far more to be off-grid. I did it because I am tired of watching the concept of "go green" and regulations forcing the majority of jobs overseas and bankrupting America.

Destroying America's economy is the only objective being completed by the green machine. I'll be watching the destruction from as isolated a position as possible because waiting until 2050 to see the fruits of greening will be great but America won't be here to see the benefit.

September 22, 2011

Ken, Your disertation demonstrates an excellent grasp of the economic situation of "Green Energy" However, it is my belief we as a nation are shooting ourselves in the foot, so to speak. The huge subsities which make USA oil and coal production profitable in the current world economy should be simply reduced on a reasonable reduction schedule and those same funds used to finance the funding of green energy over a similar schedule producing a transition from Black Energy to Green Energy in perhaps a five to ten year period. Just as the European countries and Asian countries are already doing. We can-not afford to wait we must act, and soon. to turn our economy around and save ourselves from the mediocraty of doing nothing.
I must admit that this would be an excellent opprotunity to reduce the dependence in rural regions on the Nationwide electric power grid. Far better to be energy independent and eliminate the expense of maintaining the distribution network of high power lines and isolated huge electrical power plants serving customers sometimes hundreds of miles from the generating plant in favor of individual and sometimes neighborhood power sources using PV or wind or geothermal or hydro sources. Remember a large percentage of what you pay in cash for electricity is administrative salaries, Physical plant maintence (Trimming trees, replacing wires and poles, and repairing lightning damage), and investor Dividends.

September 22, 2011

The only suggestions to green up America contain elements that are clearly breaking the back of American businesses and sending jobs to other countries.

My belief is that the green hysteria is not based on a measured event but rather models and speculation that has not been validated, let alone proven. When, and that is the biggest question, we have an alternative that is remotely cost effective; then and only then should we work so hard to change. Until we have a working solution it does not seem valid to force a false solution onto the public.

Some regulations have been beneficial and have resulted in cost benefits. One of those was the cleaning of water from certain factories. In one specific case the process to clean the water resulted in the salvaging of precious metals worth more than the cost of the cleanup. These solutions should be considered as viable.

No one can show any real evidence that warrants the destruction of America. All of the calls for action now are based on a set of models and speculation that have all physical evidence indicating the models are exaggerated (some exaggerated by over 1,000 times actual measured results). Until there is a working solution it would seem to be foolish to force the United States to become a broken country.

As far as being off-grid, the costs are prohibitive for the vast majority of people. I chose to do so because the green bandwagon is well on its way to forcing the country into economic collapse and I do not wish to be in the same chaos that is descending on the bulk of Americans. Be very careful about what you wish for.

As a recovering liberal (for the first 55 years of my life) I now realize that I had been lied to about nearly every aspect of life. I would suggest that everyone use the Internet to view the original documents that are being used to form public opinion. Look up both side of the arguments and make an informed decision. Look up Al Gore’s data used in the “Inconvenient Truth”. It is interesting that the rise in CO2 occurs after the increase in temperature in most cases. That should lead one to understand the increase in CO2 is the result of warming and not the cause. Warming the oceans would release CO2.

As far as "We can-not afford to wait we must act" that is the absolute lie being told. There is no reason for panic. As for the greening of other countries, I call it simply more misinformation. The "greenest" countries are the absolute poorest that have no industry, no transportation, and no power. Is that what you really want for America?

Before you cut the throat of America should we not have a solution? Wind and solar have potential but are not even close to being cost effective. Oh sure, if we subsidize those technologies we can get the price down to only a factor of 2 or 3 time more cost. Believing that the gas and oil subsidies are bad and subsidies for solar and wind are somehow good is nonsensical. A local wind farm received an 85% initial Government grant and continued subsidies and the power still costs 2-3 times more than conventional power. The power company tells people if they want "clean" power they can pay the added rate.

All of the efforts to create alternative power sources are great. When they are ready for prime time then we should act. As for now, the "belief" that using fossil fuels is destroying the planet is being used to destroy the United States. Simply put, if the United States miraculously switched today from fossil fuels to a magic power source that has zero pollution, the amount of so-called "greenhouse gases" would be reduced by such a small percentage that it would be considered a joke.

I am tired of hysterical ignorance pushing solutions that have a single goal and that is to put money in some liar's pocket. For example, we have a tax of $110 per cow now because cow farts are "believed" to be a MAJOR source of greenhouse gas. This type of insanity is pushing our country to the brink.

September 22, 2011

@Ken. Congratulations on being "independent" and isolated. Obama spending on renewable technologies has not been ruining our economy over the past 30 years. It's good to stay on-topic. Just as a team can clobber a lone-wolf, a large mass of people can clobber a large problem. Corporations aren't going to roll over for off-grid cranks in the boonies, and they are the ones who've the legislators' attention.

@Dennis. I agree on ending subsidies, but not on turning around and spending that on further subsidies. Moreover, the point Ken may have been trying to make is that this massive infusion of federal cash distorts the market and makes us less competitive. In Texas, when oil is good, the roughnecks work on the drills. When wind is good, they work on the turbines. All of this green economy will come into place when fossil fuels cost too much. The reason China is leading in photovoltaics is because labor is very cheap there, and their government spent billions in subsidies - as labor gets costlier / subsidies end, then we can compete.

The brilliance of "Natural Capitalism" and the RMI is the realization that GDP has a quality as well as a quantity, and that renewables and services (as Mr. Lovins defines 'service sector') can massively improve that quality. Quality GDP means lasting GDP, not producing prisons or crap we throw away within 6 months or junk food. As waste is removed, that effort and expenditure can be replaced with ever-expanding specialization of services, as humans seem to have no end to desires.

Under the present paradigm, the death-throes of the Industrial Age, centralization has automated to the point of causing massive structural unemployment. This means the middle class is being replaced by computers and heavily automated factories. The solution is to give the means of production / marketing to the middle class, who must make regional/customized goods in the lease rather than own/throw-away model. If we allow the status quo to continue without ceding the commanding heights, we will end up in a dirty police state where the rich control the means of production, the poor clean their houses, and the economy is in perpetual boom/bust.

September 22, 2011

Energy supply and government intervention have always been intertwined in a complex and nearly inseparable manner. Washington can help or hurt, but the true center of gravity for economic change rests within the private sector.

In any case, we are seeing huge and accelerating investments and cost reductions in these efficiency and renewable energy technologies. We are also seeing the large number of green jobs that accompany this growth—in the U.S. ranging from hundreds of thousands to millions. How many more jobs can we create as costs are reduced further and installations are increased to eliminate U.S. coal and oil consumption by 2050?

Thanks for the debate and keep em coming

September 23, 2011

Never considered myself an "off-grid crank".

I also don't Think I said "Obama spending on renewable technologies has not been ruining our economy over the past 30 years". In fact the subsidizing of green was in full force 50 years ago in Southern Cal. The solar systems I installed enabled the homeowners to receive a 55% tax rebate on the cost.

I agree that subsidizing is not the best solution and certainly not subsidizing competing solutions. The difference in price between Chinese and American made solar panels is currently about $300 (Chinese) and $900 (American).

If people feel strongly about supporting American jobs they will be spending the $900...right? Or will they do a cost benefit analysis and buy the $300 unit?

Also, what is the specific problem that people are referring to are we trying to solve? Is it man-made global warming or is that just a tool being used to help people push a political agenda?

In any case, for every green job we create I would bet we lose many more due to the forcing of high-cost solutions where there is little to no benefit.

September 23, 2011

Josh, can you provide an example of a company that has gone green which has saved more than they invested? The reason I ask is that of all the projects I have worked on in the past 50+ years that were green in nature, not a single one resulted in actually savings unless a major portion was subsidized.

Basic example is a $15,000 solar system with a functional lifespan of 30 years would have to save an average of $500 per year counting for inflation and the loss of investment benefit of the original $15,000.

Thanks in advance for any answer you might provide.

September 23, 2011

First things first - once the "leverage" of the industrial revolution kicked in, full employment became imposable. Where one farmer used to feed his family and maybe 10 others, modern use of leverage means one farmer feeds hundreds. So much for needing so many farmers. Same thing with manufacturing. As automation kicked in and economies of scale factored in, no need for so many "workers." This is a fact of life and no amount of manipulation can make it go away. To get the whole story, look up "Technocracy, Inc." on the web and read all that Howard Scott has to say about it. This is OLD information, circa 1910 but every bit as relevant now as when it was first written.

Now, about "green jobs" - we can let the market takes its own course and concentrate on the easiest, low hanging fruit first. By following the lead Amory Lovins has established, the "nega-watt" thing is the low hanging fruit that we can work on now. The Empire State Building example is a clear indication that this stuff works. Right now there are probably just a hand full of firms doing this work, but with so many buildings in the U.S. that would benefit from similar make overs (how about ALL of the rest) there could quite literally be hundreds if not thousands of similar firms employing out-of-work people who already have the skill sets necessary. Best part is that we don't need government ANYTHING to get the job done. Outstanding ROI's are all that the building owners need to see (as well as PRIVATE money people). What's the hold up? Mostly ignorance. Not one out of ten people answer me correctly when I quiz them about our biggest energy "sink holes" (buildings) or our largest potential "energy independence" strategy - efficiency!!

A basic reading of the information on the RMI website is enough to get the juices flowing for anyone with a pulse and an IQ over 40 . . . we just need to get out the word and the market forces will take over. The rest of the stuff, like distributed electrical generation, renewable energy sources, composite material autos/trucks/airplanes can come later. We have such a HUGE potential in just the efficiency factor alone that we could not get the job done in 25 years - even with "0%" unemployment.

Whether one believes in "global warming" or not, and if one does, whether or not it is man made is all a MOOT POINT! Once we start down the road to efficient use of our energy, the resulting carbon free systems will be their own reward. You can say that you have a "small carbon footprint" or what ever else makes you feel warm and fuzzy, but it won't matter because we'll all be much better at the whole energy thing, n'est pas?

That's my story and I'm sticking to it.

September 23, 2011

@ Ken. I’d love to provide some examples—the following were the first to come to mind:

First, I’d like to say a little more about the recent renovation of the Empire State Building mentioned in the previous comment. The project was led by building owner Tony Malkin, who saw the potential to time efficiency upgrades with a pre-planned update to building systems. Efficiency opportunities were identified and implemented to save 38% of the building's energy use resulting in $4.4 million of annual savings. These efficiency improvements added only $13 million to the $106 million dollar renovation for a very attractive ~3 year payback. For more see the following: http://www.rmi.org/Default.aspx?Id=2318&vid=3011&cat= and www.esbsustainability.com

For another example: Bright Automotive—an RMI spinoff—is bringing to market a 100+ mpg lightweight, aerodynamic PHEV fleet vehicle. They have already received funding from GM ventures, and secured a contract w/ the USPS, all with no government subsidies. For more see: http://media.gm.com/content/media/us/en/news/news_detail.brand_gm.html/content/Pages/news/us/en/2010/Aug/0803_bright and… http://www.brightautomotive.com/

For another transportation sector example, Wal-Mart plans to double long haul truck fleet efficiency by 2015. Increasing the average fleet mpg by just one gallon saves $35-50 million per year. They have also installed stand-alone heating units in their overnight-route trucks to avoid idling just to heat the cabin—saving $25 million of diesel annually. For more on this, see: http://www.washingtonpost.com/wp-dyn/content/article/2007/07/17/AR2007071700921_2.html and http://move.rmi.org/markets-in-motion/case-studies/trucking/wal-mart-s-truck-fleet.html

I would guess that a detailed audit could find some government involvement at some level, but I can confidently say that the driving force is that they make solid business financial sense—and I wouldn’t expect anything less from Mr. Malkin, Wal-Mart, or GM. And as noted before conventional generation is also subsidized and the government has always been significantly involved with energy.

And finally, with regards to Solar, there are still a lot of barriers to overcome to continue reducing costs, many of which still exist in installation, permitting etc. I'll see if I can bring someone from RMI focused on solar possible for a little more info here.

November 5, 2011

First off, I am personally energized by just about all the work RMI puts out there. Running across this a couple years ago has changed my thinking and changed my life. Here are my additional thoughts.
As I look at what happens to my personal budget as I move from a position of dependence on others to independence, I see my debts shrink as one would expect. What's interesting to me is that at the moment I am debt-free, I don't need to make as much money to enjoy the same lifestyle. This is the key to what can happen nationally with the so-called Green Energy Economy.
The great thing about this sector is that it allows us to keep our resources local and not rely on others. It allows us to pay forward on what we owe. Ultimately - and I think even long before reaching the black - we will all need to do less. Now, RMI has gone to great lengths to prove that doing this and that can allow a 158% larger economy without fossil fuels, etc., but what I am saying is that we don't need that and I'm not sure we want that.
Economic activity has historically been to the detriment of the environment. People have developed a 'need' for technology, for autos, for individually-wrapped, pre-fab anything, and then it all moves to the landfill. I honestly believe the best thing for humankind is for us all to realize the freedom that comes with needing less and working less.
If (hypothetically now) unemployment is at 10%, that means that for every 9 people working 40 hours, one guy is not being utilized for 40 hours. Not only is he not producing, but he is the recipient of unemployment checks, etc. courtesy of the 90%. Let's say for sake of argument that each of the 9 chose to work 36 hours. All of a sudden, Mr. Couch Potato has 36 hours available to him as well, and the level of productivity is retained. Now he receives no aid and everyone is happy. They are happier - and I should note healthier - for working less, and incur less cost in their lifestyle (less healthcare, less contracting out things like lawn care and childcare). Of course, less opportunity trickles down for those folks to work, but the same principle will apply to them.
Of course that's all a dream because there would need to be some incentive to working less and the government would actually have to, oh I don't know, work together with businesses to try it in an area or something.
The thing to remember is that the life of leisure and of opening ourselves up to giving up of our time for the opportunity of others (I'm reminded of the Amish...) is only possible when you do not have obligations to meet. The crux is that unless we share the work, we have less income to balance the budget and get ahead.

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