CLIMATE FIGHT IS GOOD FOR THE SKY, GOOD FOR THE BOTTOM LINE - SUN GROUP STUDY (FROM SOLAR POWER INTERNATIONAL 2009)

ASES/MISI analysis shows that renewable energy and energy efficiency can reduce U.S. carbon emissions 60-80%, generate millions of jobs and are revenue neutral or better
October 21, 2009 (American Solar Energy Society)

SUMMARY
Tackling climate change will green the U.S. in a lot of ways.

For those passionate about controlling greenhouse gas emissions (GhGs), star environmentalist Ed Begley, Jr., hit all the right notes in a Solar Power International 2009 keynote address that cheered the solar energy industry with its stirring examples of how solar energy fits into the “big ticket” work of cleaning the earth’s all too troubled air and water and reversing global climate change.

But as U.S. Secretary of Labor Hilda Solis, who followed Begley, told the people who are pioneering the development of the most abundant New Energy on earth, the building of the New Energies will also generate jobs and revenues and grow the kind of green that banks and businessmen who disdain environmentalism and deny climate change get passionate about, the green in greenbacks.

Estimating the Impacts of Tackling Climate Change, released by the American Solar Energy Society (ASES), the original solar energy association, and Management Information Services, Inc., the respected research authority, proves Secretary Solis’ passionately expressed points exactly right about the value to the economy of building New Energy.

Aggressive deployment of New Energy and Energy Efficiency (NE & EE), according to the report, will create a net gain, even after considering Old Energy job losses, of up to 4.5 million U.S. jobs by 2030. Coincidentally, such growth will cut GhGs enough to impact and perhaps even turn back global climate change.

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The study finds that NE & EE deployed in the needed magnitude would also be at least revenue neutral and potentially revenue positive. Implementation costs that might otherwise drive up the price of New Energy-generated electricity would be offset by energy bill reductions from lower generation expenses and efficiency-driven reductions in consumption.

COMMENTARY
There are possible ironies to this report its authors seem to overlook. Fighting climate change, it argues in an unprecedentedly detailed analysis, will be a driver of economic growth. One possible irony to that argument is that it leaves out the fact that dealing with the worst aspects of global climate change would be a terrible drain on the economy, such a drain that discussing the economic benefits of New Energy is almost missing the point.

Compared to the costs of the ravages of climate change, the report almost forgets to mention, any expense for New Energy and Energy Efficiency is small.

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Or perhaps the irony it that no amount of spending to build a New Energy economy could match the amount of spending and the jobs that will be needed to do the grim work of geoengineering and environmental reclamation necessary if the world lets climate change do its worst. Yet that would be a completely different kind of economic boon, the mother of all stimulus packages.

Perhaps the ironies are the result of the report’s vital but narrow focus. A 2007 ASES report assessed the impacts of 6 major New Energies (concentrating solar power, solar photovoltaics, wind power, biomass, biofuels and geothermal energy) on climate change and concluded the New Energies could achieve by 2030 the needed offset of 1.2 billion metric tons of GhGs to head off climate change’s worst impacts. This new report, therefore, is primarily focused not on the broader frame of reference but almost entirely on jobs.

Still, as Secretary Solis’s speech made clear, the news about the jobs that will come from a commitment to the New Energy economy is exciting. But perhaps differentiating between the climate change fight and the fight for the New Energy economy is moot.

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By September 2009, the U.S. had lost ~8 million jobs to the recession. At the same time, atmospheric GhGs were at ~390 ppm and headed beyond the perhaps (but probably not) safe level of ~450 ppm (350 ppm would be a lot better). Aggressive deployment of New Energy and implementation of Energy Efficiencies is an effective way to reverse BOTH those ugly trends and increase U.S. national security in the process.

NE & EE are already driving economic growth. In 2006, they created 8.5+ million new jobs, generated $970 billion in revenue, $100+ billion in industry profits, and $150+ billion in increased federal, state, and local government tax revenues. In 2007, it was 9+ million jobs, $1,045 billion in revenue, and ~$160 billion in federal, state, and local tax revenues. The 2007 revenues were bigger than Wal-Mart, ExxonMobil and General Motors combined.

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An aggressive effort going forward, the ASES/MIS study shows, can generate up to $4.3 trillion in U.S. revenues and create 37+ million jobs by 2030. That job total represents 1 in every 5 U.S. jobs, jobs that have to be done in place and therefore could not be outsourced, jobs that will be in every nook and cranny and corner of the U.S., in every sector and layer of the economy and involve every race, creed, color and kind of educational level of the nation.

Yes, Old Energy jobs will be lost but there will be a NET GAIN by 2030 of 4.5 million NE & EE jobs.

NE & EE growth will increase opportunities for accountants, engineers, computer analysts, clerks, factory workers, truck drivers, mechanics and many more kinds of workers. Coal miners can do retrofits and build wind turbines. Oil drillers can do geothermal drilling. Nuclear engineers can build solar power plants.

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Wages are expected to be, on average, higher. NE & EE are expected to drive the retrofitting of rusting manufacturing infrastructure, revitalize inner cities and reinvigorate rural communities. The need to train new workers will, indeed, already has begun to drive growth and changes in educational institutions from trade schools to University graduate programs.

OK, so how much is it going to cost?

The ASES/MIS paper created a deployment curve for each technology. It estimated the gigawatt-hours of electricity or gallons of cellulosic ethanol or energy saved through efficiency that would occur each year from (base year) 2005 to 2030. It also created a supply curve and an Reserach, Development and Demonstration (RD&D) curve for each technology. It used standard life-cycle cost-analysis techniques for each technology. And it subtracted the data for Old Energies and Old Energy jobs lost due to being replaced by the New Energies and New Energy jobs.

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Net costs for deployment of the different components of the New Energy economy differ significantly. Example: In 2020, EE shows net savings of $85 billion but all NE technologies except biofuels show net costs. But by 2030, EE savings fall to $16 billion while wind and biofuels start showing net savings, though the other New Energies still show net costs.

In short, EE is a better deal through 2030 than NE but the EE gains fall over time, as the low hanging fruit gets picked. Meanwhile, NE slowly becomes a better and better buy over time as technology improves and economies of scale develop. EE jobs drop from 3.5 million in 2020 to 3.3 million in 2030. Jobs in NE grow from 900,000 in 2020 to 1.15 million in 2030.

Jobs in EE are 80% of the total in 2020 but only 74% in 2030.

In NE, the most 2020 jobs are in biofuels. Concentrating solar will be second, and then wind, biomass power, photovoltaics (PV) and geothermal power. By 2030, photovoltaics will supply the most jobs, followed by biofuels, biomass power, concentrating solar, geothermal power, and wind.

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The data show clearly that while costs for NE deployment and EE implementation will be high, savings assure that there will be no NET costs.

Job distribution will be broad. The most will be in construction, state and local government, farms, and miscellaneous professional, scientific, and technical services.

Bottom line: The politicians and policy analysts who say that making the transition President Obama wants, to a New Energy economy, will be economically costly are wrong. The transition will be one of the best things that could happen to the U.S. economy.

Along the way, making the transition, just coincidentally, will take a giant step toward reversing global climate change.

The alternative is a pointless exercise in resisting change in the interest of sustaining old habits that are not only destructive to this good earth but self-destructive as well.

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QUOTES
- Brad Collins, Executive Director, ASES: “The twin challenges of climate change and economic stagnation can be solved by the same action—broad, aggressive, sustained deployment of renewable energy and energy efficiency…the solution for one is the solution for the other…For job growth the status quo is no match for innovation…Congress can help get the economy back on track with smart energy policy - reduce energy consumption in buildings by 50%; adopt an aggressive national renewable portfolio standard; commit to end dependence on foreign oil by 2025; and implement an upstream cap and auction system to manage greenhouse gases at the points where they first enter the energy economy.”

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- From the report: “The vast majority of the jobs created by the Tackling Climate Change initiative are standard jobs for accountants, engineers, computer analysts, clerks, factory workers, truck drivers, mechanics, etc. and most of the persons employed in these jobs may not even realize that they owe their livelihood to climate change mitigation…[Occupational data demonstrate that the Tackling Climate Change initiative will create a variety of high-paying jobs, many of which take advantage of manufacturing
skills currently going unused. Most areas of the country have the existing infrastructure and skilled workers to accommodate the growth of EE&RE industries.”

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- From the report: “The ASES/MISI research summarized here finds that—even accounting for initial deployment costs and displacements—the effect on the U.S. economy of addressing climate change would be overwhelmingly positive. For example,
these data show that the sustained, orderly, and robust development of energy efficiency
and renewable energy (EE&RE) will generate at least 4.5 million more jobs than the effort will eliminate.”
- From the report: “Time is of the essence, however. Efforts like these take time to ramp up, and if the United States is to achieve the ambitious climate mitigation job goals outlined here, it must introduce aggressive programs immediately. The bottom line is that addressing climate change can be good for the environment, good for the economy, and good for jobs.”