Posts Tagged by mid-term elections
Renewable Energy and Job Creation
| September 10, 2010 | Posted by Craig Shields under Renewables - Business |
As I’ve mentioned in previous posts, I’m in the process of studying the size and shape of job creation that will come as a welcome by-product of the migration to renewables.
How this sits in the constellation of benefits to renewables depends on whom you ask. But regardless of the level of importance that job creation has compared with national security, fiscal responsibility, the health and safety of the world’s population, and stemming the long-term ecological damage wrought by extracting and burning fossil fuels, it’s got to be in there someplace.
Yet job creation is a very complicated subject, as it comes with so many moving parts:
- What percent penetration of renewables are we talking about? What type? In what time-frame?
- How are market forces affected by the actions of Congress (e.g., removing/perpetuating subsidies that keep the price of oil artificially low, creating incentives for renewables, state legislatures enacting renewable portfolio standards)?
- What’s happening outside the US, where many countries are taking aggressive action to move to renewables?
- What are the strategies of the corporate giants like GE and Siemens in this global economy? From here, it looks like they don’t care where the green jobs are; if the US misses the boat, that’s too bad. Is that true?
- What brown jobs will be lost (e.g., coal mining) simultanously to the build-up of green jobs? Do we have the political stomach to deal with any job loss?
- What will be the impact of all the green job training in the community colleges?
I’ve become particularly interested in the issue of subsidies, as they seem to be so critical in forming the climate in which private investors will climb on board the clean energy bandwagon. But because macroeconomics isn’t my strength, I’m going to have to speak with a great number of economists, analysts, and political pundits to get this right.
It appears that the reason this is so complicated is that subsidies take many forms, some of them (deliberately?) hidden:
- Construction bonds at low interest rates or tax-free
- Research-and-development programs at low or no cost
- Assuming the legal risks of exploration and development in a company’s stead
- Below-cost loans with lenient repayment conditions
- Income tax breaks, especially featuring obscure provisions in tax laws designed to receive little congressional oversight when they expire
- Sales tax breaks – taxes on petroleum products are lower than average sales tax rates for other goods
- Giving money to international financial institutions (the U.S. has given tens of billions of dollars to the World Bank and U.S. Export-Import Bank to encourage oil production internationally, according to Friends of the Earth)
- The U.S. Strategic Petroleum Reserve
- Construction and protection of the nation’s highway system
- Relaxing the amount of royalties to be paid – apparently, we get about 40% of revenues from oil on public land vs. 60% – 65% in most other countries
- Not forcing the industry to deal with the “externalities” – healthcare costs, long-term environmental damage, etc. — costs that are becoming increasingly clear and subject to quantification
If anyone has a suggestion for people I should interview in this regard, please let me know.
Related posts:
Renewables — What Are the Economic Realities?
| August 30, 2010 | Posted by Craig Shields under Renewables - Business |
In response to my white paper on The Tough Realities of Marketing and Sales, a reader points out a few of the economic realities that, in his mind, supersede the points I make in the report. In particular, he notes that there is currently no true market economy for things like biofuels:
All Sustainable businesses have a particular feature: they are always evaluated on a payback or IRR basis. We are in an oil based economy and not on a Sustainable Economy. Biofuels and energy are not marketable by any company but the utilities or distribution companies in each case. You can get biofuels from many technologies, but at the gas station you buy oil, not biofuels. Probably if you look, you will find a huge law on biofuels and how they can be marketed that is everything but compelling for biofuels to be used. Taxes alone make the business tough and customers are wary about using biofuels even in low percentages … Either taxes are on the side of biofuels or they always need incentives and subsidies to be competitive.
The reader goes on to point out that the same lack of liquidity exists for electricity: Read More
