THE NEW ENERGY ECONOMY MEANS BUSINESS

Study: Jobs in fledgling green sector growing
Chris Kahn and Sandy Shore (w/Tali Arbel), June 10, 2009 (AP)

SUMMARY
The Clean Energy Economy; Repowering Jobs, Businesses and Investments Across America from the Pew Charitable Trusts shows that the New Energy economy is growing and generating jobs in every state and at all skill and education levels. Continued growth is anticipated, especially as the result of supportive federal and state policies.

From 1998 to 2007, New Energy economy jobs grew 9.1% nationally while economy-wide jobs grew only 3.7%.

In 2007, 68,200+ New Energy businesses across all 50 states and the District of Columbia provided 770,000+ jobs, despite a decade of inadequate and intermittent policy support.

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The Pew report is based on privately collected data and took Pew researchers a year to accurately evaluate. They were cautious and conservative in defining what constituted a New Energy job. The largest proportion were in the category Pew calls Conservation and Pollution Mitigation. (Examples: environmental engineering firms, pollution specialists, etc.) The fastest growing New Energy job areas were Clean Energy, Energy Efficiency and Environmentally Friendly Production. (Examples: solar and wind energy industry workers, hybrid diesel bus makers, traffic monitoring software designers, liquid biofuels refiners, etc.)

The private sector, seeing opportunity in New Energy, has been stoking the fires of growth for the last few years. Venture capital investment reached $1 billion in 2005 and was ~$12.6 billion by the end of 2008. In 2008, ~$5.9 billion went into U.S. New Energy business, a 48% increase over the preceding year.

With the economic downturn, private sector investment has receded but the public sector now sees opportunity. Federal and state lawmakers are funding New Energy as a means of stimulating economic recovery while protecting the environment. States will be recipients of major American Recovery and Reinvestment Act (ARRA) funds and every state offers some kind of New Energy financial incentive.

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California, Texas, Florida, and New York employ the most people in New Energy. The biggest New Energy job growth rates have been in Idaho, Nebraska, South Dakota and Wyoming. Michigan lost hundreds of thousands of manufacturing jobs but had a 10.7% increase in New Energy jobs from 1998 to 2007. Texas leads in wind and VC investment. Tennessee leads in recycling, waste treatment and water management jobs. 38 states and the District of Columbia had more New Energy job growth than total traditional job growth between 1998 and 2007.

Not surprisingly, Pew predicts supportive policies will drive future New Energy job growth. Such policies include comprehensive energy plans, Renewable Electricity Standards (RESs), energy efficiency measures, alternative fuels standards, job retraining and waste reduction efforts.

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Pew's state data:

46 states have tax incentives for New Energy or Energy Efficiency investment.

33 states finance residential, commercial and industrial loans for buying New Energy or Energy Efficiency systems or equipment.

22 states and D.C. offer rebates for solar water heating or solar panel systems.

29 states and D.C. have RESs requiring regulated utilities to obtain a portion of their power from New Energy sources by a date certain.

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19 states have Energy Efficiency Resource Standards (EERSs) for energy generation, transmission and use.

23 states participate in the 3major regional emissions reduction initiatives.

14 states and D.C. (and 3 pending) have adopted the California vehicle emissions standard which President Obama established as the national standard last month.

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COMMENTARY
According to the Bureau of Labor Statistics, energy sector jobs generally grew faster than the economy in the last few years. From 2003 to 2009, coal industry jobs grew 16% and oil&gas industry jobs grew 28%. But those industries, a century or more old with well-established infrastructure and recruitment systems, would be expected to grow with growing energy demand. That New Energy expanded dramatically is indicative of a shift driven not by habit and momentum but by choice a rising clamor for better answers.

The New Energy industries have weathered the economic downturn better than most others, significantly better than the fossil fuel industries. They have proven themselves sustainable. The New Energies have not yet achieved anything like the scale of the Old Energies but they are clearly where investment and growth are migrating. New Energy jobs do not necessarily have the pay or the benefits of union jobs, but they are emerging.

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Example: Biotechnology, which is essentially a brand new field, employed ~200,000 in 2007, ~0.1% of the economy. But the Old Energies (utilities, coal mining and oil&gas) employed only ~1.27 million workers total in 2007, ~1% of the economy’s jobs.

Based on labor-intensive research and input from New Energy and job experts (including the report’s advisory panel), Pew came to a working definition for the jobs it counted: “A clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution, and conserving water and other natural resources.”

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The Pew definition covers 5 categories: (1) Clean Energy; (2) Energy Efficiency; (3) Environmentally Friendly Production; (4) Conservation and Pollution Mitigation; and (5) Training and Support.

Pew acknowledges that specific jobs, energies and industries will change but believes the categories will continue to apply.

65% of New Energy jobs are presently in the Conservation and Pollution Mitigation category. But the Clean Energy, Energy Efficiency and Environmentally Friendly Production categories are growing much faster. ~80% of venture capital investments in 2008 were in Clean Energy and Energy Efficiency, implying that jobs and businesses in those categories will grow more over time as energy demand grows. Jobs in Conservation and Pollution Mitigation won’t disappear but will not grow.

Federal policies change things. 1960s and 1970s laws helped develop the recycling, waste reduction and waste management industries.

The EPA’s Energy Star and Water Sense certification and labeling initiatives changed consumers’ choices.

Recent energy bills spurred the liquid vehicle fuel program and drove New Energy growth with tax credits. The most recent stimulus bill will do more.

Enacted in February 2009, ARRA — the federal stimulus bill — includes an array of provisions. $85 billion in the package goes to energy- and transportation-related spending.

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$21 billion goes to extending tax incentives for wind, solar and other New Energies.

$30+ billion goes to New Energy programs, including $11 billion to upgrade the national transmission grid, $2 billion for advanced battery technology, $6+ billion for state and local Energy Efficiency, $5 billion for weatherization of low-income homes, $500 million for New Energy job training and $300 million to buy new, fuel-efficient federal fleet vehicles from U.S. auto companies.

Coming energy and climate legislation will do more still.

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QUOTES
- Bob Mamo, former director of business development, Michigan auto parts supplier and present vice president of manufacturing, hydropower company Free Flow Power: "[The auto industry] just looked like it was going in the wrong direction…Green energy is definitely on the upswing. Green energy was what I was really after."
- Kil Huh, director, Pew study: "Our numbers are probably conservative…If we couldn't identify as part of green energy, it wasn't part of our count… The explosive growth is really in clean energy..."

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- From the Pew report: “Like all other sectors, the clean energy economy has been hit by the recession, but investments in clean technology have fared far better in the past year than venture capital overall. Looking forward, the clean energy economy has tremendous potential for growth, as investments continue to flow from both the government and private sector and federal and state policy makers increasingly push for reforms that will both spur economic renewal and sustain the environment.”
- From the Pew report: “Three quarters of a million jobs represent half a percent of all jobs in the United States today. But Pew’s research shows that between 1998 and 2007, clean energy economy jobs—a mix of white and blue-collar positions, from scientists and engineers to electricians, machinists and teachers—grew by 9.1 percent, while total jobs grew by only 3.7 percent. And although we expect job growth in the clean energy economy to have declined in 2008, experts predict the drop in this sector will be less severe than the drop in U.S. jobs overall.”


- Nicholas Parker, executive chairman, Cleantech Group: “It’s important not to miss the forest for the trees…In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation.”
- 2007 National Governors Association report: “While our economic engine has for years been powered by relatively inexpensive energy, there is evidence that this era is coming to a close…Meanwhile, we are increasingly aware of the serious impacts of global climate change—and how America’s consumption of fossil fuels is contributing to a warming Earth.”