Study Shows Trigger for New Energy Economy Increases Employment

WASHINGTON, DC (February 10, 2005) -- Major global warming legislation would add more than 800,000 new jobs in America by 2025, according to a new study released today. The bi-partisan bill, the Climate Stewardship Act, sponsored by John McCain (R-AZ) and Joe Lieberman (D-CT) in the Senate, and Wayne Gilchrest (R-MD) and John Olver (D-MA) in the House, would trigger new development and investment in clean energy technologies, bringing much-needed employment to states and diverse job sectors across the country.

The Climate Stewardship Act, otherwise known as McCain-Lieberman, would set a nationwide standard for global warming pollution while creating a market-based system encouraging maximum technological innovation and profitable opportunities for companies to cut emissions. The study, Jobs and the Climate Stewardship Act: How Curbing Global Warming Can Increase Employment, evaluated the employment effects of the bill, released today at the Senate Radio-TV Gallery.

Among the findings of the study:

  • National increases of 510,000 new jobs by 2015; 602,000 new jobs by 2020; and 801,000 new jobs by 2025.

  • Largest job gains would occur in construction, wholesale and retail trade, and medical services and other service industries due to increased energy-efficiency and lower energy costs.
  • Energy and fuel industry losses are small relative to the economy and to job gains in other industries, and would likely be absorbed through annual turnover, and could be reversed through additional technology incentives.
  • Largest percentage job increases by 2015 would occur in Michigan, Minnesota, Nevada, New York, Ohio, South Dakota and Wisconsin.

The NRDC-commissioned study was conducted by economists from Redefining Progress, a national research group, Jan Mutl, an Economics Professor from Johann Wolfgang Goethe Universitat of Frankfurt, German, and contributing authors from Tellus Institute, a non-profit research firm based in Boston, MA. The study used the same economic models employed by the Department of Energy and other federal agencies to analyze policy impacts on the economy and jobs.

To assess the employment impacts of McCain-Lieberman, the study used results from a Tellus Institute report that examined the effect of the bill and associated policies on energy demand, prices and costs, investment levels, permit prices, and other factors with the Department of Energy's National Energy Modeling System (NEMS) augmented by other modeling tools. The authors then estimated the impact of these changes on labor demand by industry sector through the use of an input-output model developed by the U.S. Bureau of Labor Statistics (BLS). Finally, they distributed the employment changes to states based on the relative importance of each industry sector in each state.

The major economic sectors that would be positively affected include non-energy manufacturing industries, which would see energy savings through the adoption of clean energy technologies, service industries, as consumers are projected to spend energy savings on goods and services, and agriculture, which would rise slightly under the current version of the bill. The energy and fuel industries would experience some job loss, mostly covered through normal turnover.

The analysis predicts some job losses in the coal industry, but those effects could be mitigated through policies to promote deployment of advanced coal technologies, as well as through transition assistance to displaced workers. McCain-Lieberman includes incentives for the deployment of advanced coal technologies to reduce emissions while helping to preserve jobs in that sector, and direct transition assistance for displaced workers and adversely affected communities.

Senators McCain and Lieberman today expressed their desire to add further technological incentives to the bill in energy industries, such as a higher investment to deploy advanced coal technologies which would reduce CO2 emissions while preserving employment.