In the last few weeks, it seems like every other day there’s been a different negative story about jobs in the new clean economy. I responded to an especially bad one in the Times, but I’ve seen several more since. Tuesday, David Brooks linked together a few anecdotes, quotes, and reports to proclaim the failure of government in driving clean energy jobs. Unfortunately, he’s not alone in that misperception, and more frustratingly, an inaccurate narrative is beginning to spread. Several other stories are all being circulated, all using the same narrow lens and timeframe, and ignoring anything resembling context or a broader discussion of macro trends. For example: here, here, here, and here.
But there’s an important distinction here. The reporting on the clean economy jobs may have turned negative recently, but that does not mean that the actual clean economy jobs story has turned negative. An undercurrent of criticism against investment in and projections of clean energy jobs has always existed, for political and other reasons. Recently, several incidents have occurred in the same time, and in the same industry, allowing folks to link them together in stories and call it a trend. It’s not.
As with taxes, fantasy drafts and Ikea furniture assembly, things are a lot more complicated than they first appear.
For example, I too can cherry pick anecdotes to advance a certain one-sided narrative. Let’s just look at news from August. For example, CaliSolar’s decision to open a $600 million facility in Mississippi, expected to create 950 full-time jobs. Or the 600 workers currently employed on the Brightsource solar project in California. Or the nearly 250 construction and full-time jobs at Nevada’s first wind project under construction – Spring Valley Wind. Or the completion of Amonix’s Nevada solar manufacturing facility, employing 300 people full-time. Or heck, let’s go small - the addition of a third production shift to Suntech’s solar manufacturing facility in Arizona, adding 30 jobs (totaling 100). Or an announced agreement to convert a California coal plant to biomass creating or maintaining a total of 250 jobs.
But does that really help advance this conversation? I’d rather look at these issues on a broader level, over a much longer-term time period. And so in the frame of moving the conversation forward, I’m calling out some of the issues I've seen repeated over and over, in hopes that avoiding them could enhance the overall discussion.
- Using anecdotes Instead of analysis – I've certainly been guilty of analysis by anecdote, but we can now use a growing body of actual research attempting to quantify the size of the clean jobs sector. Counting actual jobs is difficult in any industry, and surveying capacity is still being developed for the clean energy economy. Especially challenging is developing the classification of a “green job”, what industries qualify, how they’re quantified, how to include indirect and induced jobs and tracking growth over time (for those interested in these issues, this is a good intro to these issues). The Brookings study is the most recent and a good non-partisan effort. It determined that wind and solar jobs grew from 10%-18% annually in the past decade, and that there are 830,000 jobs in the “Energy and Resource Efficiency” segment within the U.S. and 138,000 within the renewables sector. Pew also contributed a good study a couple years determining that clean energy economy jobs grew by 9.1% from 1998-2007, totaling 700,000 jobs (as of 2007). More importantly, the BLS is due out with its first effort soon, which will expand on the efforts of Brookings and Pew (see here). While none of these studies should be taken as the last word, I prefer this to individual quotes.
- Ignoring the context of the weak U.S. economy, continuing financial turmoil, and pre-existing macro-economic trends. The U.S. has been operating in a challenging global economic downturn for 3 years. This has reduced limited investment across industries, including renewables. Further, this downturn has had ramifications for the U.S. power industry, beginning with falling commodity prices and reduced electricity demand, which is reshaping the U.S. energy industry in the short-term. Meanwhile, normal market dynamics are also leading to a fundamental restructuring of the global solar industry. Then of course, there’s the long-term trend of offshoring U.S. manufacturing jobs, and the difficulty of competing against China. All of this is to say – its unfair and simplistic to look at the super small sub-set of one company, say Solyndra, one of 36 to receive a government loan guarantee, or one town, suffering from a decade of underemployment, and make broad statements about the success or failure of government policies or the viability of U.S. clean energy industries, based on the experience of that one company.
- Prematurely focusing on micro-trends rather than the long-term nature of this type of economic transformation. While frustrating for those seeking immediate results, these investments in clean energy have been made with the long-term in mind. The transformation to a clean energy economy won’t happen overnight – there’s a reason energy modeling goes out to 2050 and beyond. Therefore, to a great extent, the results of investments now and in the future, espeically for new technologies, will ultimately be measured in decades. Grabbing short-term anecdotes from individual companies, or local towns is a cute tool for setting up a reporting narrative, but it’s not an accurate measurement of what’s happening. We’re already extrapolating successes or failure from a very small sub-set of data developed in the last two years, when we need to keep a much broader prespective. This goes double for certain unnamed columnists who strenuously advocate for humility in forecasting the future.
- Concentrating on individual technologies, not the entire portfolio of investments. In both the private and public sectors, we’re investing in many, many different technologies. Per BNEF, total global investment in all renewable technologies was over $250 billion in 2010. Public sector funding, driven mostly through stimulus spending during the recession, added several hundred billion more globally. Perhaps this is obvious, but not all of those technologies will prosper. And within each technology, some innovation will be transformational in impact, while other innovations will ultimately fail. To address climate change, eliminate our reliance on petroleum, switch from fossil fuels to renewables and drastically improve our energy efficiency, we can’t just rely on a few technologies. Similarly, when looking at green jobs, we have to look across the spectrum –wind and solar, electric vehicles, biofuels, efficiency, and so on. Individual solar manufacturers may go bankrupt, which will have a negative impact on jobs. But we would do well to keep an eye on the dozens of other opportunities - battery manufacturers, utility-scale solar projects, smart grid, storage, and so forth. For example, we shouldn’t forget the jobs building and running rail lines, rail cars, bus rapid transit and hybrid buses, as well as bicycle lanes and sidewalks. These are all green jobs too. And of course, green jobs are coming to auto companies as they innovate to comply with new fuel economy and GHG standards.
The bottom line is, new technologies such as energy efficiency and renewable energy are getting a real foothold in the market, with solar and wind manufacturers popping up all over Ohio and Michigan, and utilities making unprecedented investments in energy efficiency from Arizona to Tennessee to Maine. According to SEIA, the U.S. is now running a $1.9 billion trade surplus in solar technologies, as compared to a $250 billion trade deficit in petroleum (responsible for 40% of our overall trade deficit). The President and auto manufacturers recently agreed to an increase in mileage standards, which will make American cars more fuel efficient and competitive, while American battery manufacturers are growing dramatically, and now expect to own 40% of the fast-growing electric vehicle battery market in 2015. Then of course, there are the Brookings and Pew studies above.
The Midwest, especially hard hit by the manufacturing depression in this country, has been a critical beneficiary of new clean energy industries. According to the ELPC, in Michigan alone, there are 120 and 121 companies in the solar and wind supply chains respectively, and may see up to 62,000 jobs from the new advanced battery industry. A report issued last month by NRDC, UAW and NWF showing that over 50,000 “clean car” jobs now exist in Michigan and Ohio. Keep in mind, these two states lost over 100,000 automotive jobs between just 2003-2008. Finally - if you're fine with anecdotes, then clean energy success stories abound.
Recent investments made in our new clean energy economy have been both short-term stimulus leading to tens of thousands of new jobs and long-term down payments on a new clean energy future. It is clear that clean energy is the focus of the 21st Century global economy and we can’t win the future and prosper economically in this country if we don’t get back out in front.