What Levels of Job Creation Will Come from Renewable Energy?
Over the past year or so, I’ve written a few pieces on the levels of job creation that can be expected as we “go green,” i.e., move to greater levels of energy efficiency, renewables, electric transportation, etc.
Last week I met clean energy stock analyst Tom Konrad, one of the world’s most visible proponents of the green economy, at a conference in NY City. During one of our numerous conversations, I learned that he and I had been trying to get to the root of this very issue – and through very similar analyses. In particular, we had both investigated the work of Political Economy Research Institute at the University of Massachusetts, Amherst (PERI) and one of its most senior people, Robert Pollin.
Here’s a terrifc article Tom wrote on green job creation that breaks some of this out. Note, however, that both this article and PERI’s work seem to reduce the question at hand to this: For each million dollars in spending, how many jobs do we get – and of what kind and duration?
While this is interesting, to me, it misses some central issues. Consider the following line of thinking:
A million dollars? Who’s doing the spending? The federal government? Are we proposing a kind of New Deal program? How likely is that? And why would one think it would be necessary? Why can’t this spending come from the private sector?
But what are the conditions under which it will happen in the private sector? Private money isn’t going anywhere at all right now, and most certainly not into unproven or as-yet-unscaled technologies (of which clean energy represents several).
So what would stimulate private sector spending? How about real economic opportunity?
OK, so what’s standing in the way of demonstrating real economic opportunity?
It’s the nature of the playing field. Depending on how one does the accounting, fossil fuels receive between five and six dollars in subsidies for every dollar going to renewables. This is fundamentally a matter of corruption; it’s a simple transfer of wealth from a struggling taxpayer to an extremely rich oil company. And of course, essentially no attempt is being made to force oil and coal companies to pay for the externalities their industries produce (e.g., lung disease and long-term environmental damage).
Trust me, once this inequity is rectified, you’ll have private capital raining down on clean energy in torrents, and we won’t be asking questions like “How much further in debt does the federal government have to go in order to build green jobs?”
In other words, we’re simply asking the wrong question. It’s like asking, “How can I improve my reading comprehension while I’m beating myself on the head with a hammer?” Just stop beating yourself on the head, and the issue will disappear.
Hei Craig,
To what extent do you think retail gasoline price levels depend on these government subsidies to oil companies? Do you think gasoline prices would rise significantly if and when subsidies are cut back? Isn’t this the real reason that no politician will champion the trimming of these subsidies? Recent history shows there is significant public backlash when gasoline prices spike. Do you think the lagging developement of electric autos and alternate transportation methods is throttled by the petroleum companies? If so, in what ways?
Yes, if we yank the subsidies, gasoline prices will rise somewhat; I’m expecting to about $6/gallon. More about this here: http://2greenenergy.com/electric-vehicles-throttled/14230/.
I, like so many other hard-working taxpayers, am so tired of the BS in my country. You are absolutely correct in saying that “This is fundamentally a matter of corruption; it’s a simple transfer of wealth from a struggling taxpayer to an extremely rich oil company”. The methods in the utilization of oil (mainly oil burning and coal) is one of the biggest contributors to carbon footprint in the world today. If we would just get the “greedy leaders” out of the forefront and begin seriously addressing increasing our efforts in real energy renewables it would create more jobs, decrease the cost of energy and, most importantly, decrease our carbon footprint which “just might” affect many of our nature problems in our global environments.
I have been trying to raise enough money for my invention for 2 years with out any success. Every job I had in the last ten years has disappeared and every industry that I have worked in has evaporated. The banks say I need good credit and matching funds to get a SBA loan. The DOE says I need $200,000 in matching funds to apply for a Federal grant. If I had $200,000 I would build 10,000 WindJammer Generators and the government can get at the back of the line. Here in Florida there were 900 felons working as mortgage brokers who ripped off both the banks and the homeowners. There is such a complete disconnect between the politicians and the citizens of America and reality that banging myself on the head with a hammer sounds like fun. I am working on a fund raiser and I hope this one works, or my next address will be 001 Nowhere St. Tent City. My web site is http://www.windjammerenergy.com & you can see some of the details for my generators. I will send you the funding details soon & you can pass the link to your friends.
I’m glad you’re able to maintain a sense of humor about this situation. Best of luck for a good outcome.
Part of the problem is that new green energy/environmental technologies will not be funded by private finance until these technologies are verified to prove that they work, both technically and financially. That was the role that government subsidy funding and verification services were supposed to provide. However, EPA is dismantling its technology verification program, and many states have done likewise. As Chair of the Board of the not-for-profit New Jersey Corporation for Advanced Technology (NJCAT), we believe there is a critical need for these independent 3rd-party technical and financial verification services in the green technology space, and NJCAT is looking to expand, not reduce, these services in the coming year as we revise and improve our business plan. Keep and eye on http://www.njcat.org this fall for announcements. If we don’t do this, green technologies will always be “the wave of the future”, but not of the present… We need real green jobs now, not later!
Thanks very much, John. Please let me know if you’d like my viewpoints; I’d be honored to provide them.
Job growth is a fractal. Once the bud of good ideas and the business models to advance them take root, the rapid growth of whole industries is possible. This is especially true of renewable fuel technologies that interconnect feedstock production with local community development with ecosystem services with economic and energy self reliance with the savings of reduced need for military involvement to product access to oil. The closest paradigm shift comparison has been the information age explosion which is still expanding.
We don’t need government funding – which places too much control in politicians. We do need the administration to look and act longterm: to set firm alternative energy targets that cannot be interfered with. to fashion regulations that encourage R&D and deployment – not stifle it, and to assess economic valuations that account for all the social, environmental, and diplomatic costs of all alternatives. Constant struggle over subsidies shows how frustrating shortterm policy manipulation can be to free enterprise investment.
We can’t expect investors to risk billions on longterm industrial development with no predictable ROI. Let them assess the fitfulness of technology through due diligence. We can support them most by giving them confidence that proactive policies won’t fall victim to reactive political manipulation.
Unfortunately, the new energy economy combined with high levels of corporate greed seems to have created a new sort of business model. Businesses with marginal track records and little actual manufacturing experience are managing to garner big incentives to locate proposed manufacturing plants in areas of high unemployment. To capture a business in their area community governments are offering low rent shell buildings, free/reduced utilities and cash incentives above and beyond those from the federal and state governments. Some less scrupulous entities are moving frequently to seek better deals. So a community drops a couple of million to entice a business that shuts its doors six months later and sets up shop elsewhere……That is part of what runs up the cost per empoloyee…….
The reason that we benefitted from the Industrial Revolution was that machinery dramatically reduced manufacturing costs. It did that by substitution machines for human labor. That enabled all of us to become much more prosperous.
Increasing employment is often sited as an advantage of renewable energy. But if renewable energy requires more people to produce energy, it will increase the cost of electricity to the detriment of all of us.
Although I continue to favor nuclear power, I believe that the nuclear technology we have chosen to use is a serious mistake. There are many ways to design nuclear reactors and the ones we have chosen to use are expensive, create nuclear waste problems, and require extraordinary care to make them tolerably safe. There is a better way to go.
For information on a superior nuclear technology which solves the problems associated with our present nuclear technology, check out the following links:
http://www.youtube.com/watch?v=eU3cUssuz-U&feature=player_embedded
http://www.youtube.com/watch?v=RSzEjWz5T44&feature=player_embedded#at=16
http://www.youtube.com/watch?v=vEpnpyd-jbw
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8393984/Safe-nuclear-does-exist-and-China-is-leading-the-way-with-thorium.html?sms_ss=facebook&at_xt=4d9133b4906a1905%2C0
http://www.rightsidenews.com/2010090111506/life-and-science/energy-and-environment/thorium-cures-the-free-market.html
http://www.theecologist.org/blogs_and_comments/commentators/other_comments/962512/response_dont_dismiss_the_potential_of_thorium_nuclear_power.html
Dear John,
I think that the mos important point is to get a real gasoline price, without subsidies and taking into account all externalities. Only with these conditions, renewable energy will be competitive.
Jobs and National Security are the two big picture benefits in green energy. This is the kind of information that takes the volume out of the “drill baby drill” chorus.
A post outlining the fossil fuel impact on National Security would be a welcome follow up.
Don Madden
http://www.tarafinance.com
Why Its Sunset 4 CLIMATE TREATY? Since 20 years of talks have not resolved the differences we may need a ” NEW PARADIGM ” Mukul Sanwal,The author has worked at the policy level in the Government of India and the UN’s climate change secretariat “All Gas No Progress a)While the EU is undecided on emmision cuts the US wants seperate target for each country.b) Everyone wants change in temperature to be limited to 2*c and a shift to live carbon society c).The Rio conference in 1992 did not specify What is to be done?,Paid by whom? and by How much?. d)Cancun agreement continue to promise a lot in a way that commitments do not increase E)Developed world has secured mitigation in developing countries with out defining it An analysis of patterns and trends since 1992 shows that annual meetings have not discussed How countries will modify longer term trends as they had all agreed to do in the Climate Convention; developed countries specifically under its ARTICLE 4.-2(a).The evolution of the Climate Regime has only had to new institutional arrangements Expert groups and Workshops serving to solve political problems rather than the ” PROBLEM ITSELF “.The Cancun agreement continue the two decades old “Diplomatic Game ” of including in the decisions references to “NEW ” and additional financial resources transfer of technology and capacity building and establishing a trust fund,but in a form that implementation will not increase the level of political commitments,The green fund will channel $100 billion a year to poor nations by 2020 it goes on no real action Mr Craig Shield this is a situation and you bring some topics I feel (sic) every time I get your mail to go through the actual realities are brim and nothing as you think jobs would be no no you vouch me and think How you come out your own things which have no merits and people follow you and I think enough is enough I work towards the same thing which is just to get correct the countries which are developed but still have concerns and those poor countries should not given funds instea d a technology that serves the whole not like before some funds gone where who knows than developed countries seeing this got strict are right but developed countries even have a lot to contribute I just finish my thinking and yours vastly differs and so evworld’s editor Bill More I feel just tired when I get mails of waste.God save you all from the paths of what you all move is a path no where What else I can say thanks Craig
Craig, firstly I’m not sure that most of those ‘subsidies’ to major oil companies really exist any longer. Even if they did, so what?
Here’s the problem you, like many well meaning environmentalists, fail to grasp.Oil companies (with the possible exception of Total) are not evil barons forcing you to use oil. In fact, oil companies are an integral part of the economic well being of most advanced nations. I find oil (and coal) company bashing, pretty juvenile and unproductive. Good for getting cheap support from the ignorant, but useless in a practical sense.
OK, let’s grant you that Oil (+Coal,Gas) companies are bad and evil, so what to do? Obviously it’s hypocritical to chastise oil companies for selling products that you say are responsible for creating health and environmental problems, if you are not prepared to stop enjoying the benefits of those products! So,.. let’s abolish those products! Ah, that’s the problem isn’t it!??
Putting aside the claims of crackpot Utopians, ranting about running an industrialised planet of 7 billion souls on wind, solar or tidal power, you are left with a choice of nuclear and Geo-Thermal ..
What that Craig? I know you don’t like nuclear so that only leaves Geo-thermal. OK , great ! let’s see…oh yeah that’s right, the only serious investor in Geo-thermal technology is that despicable oil bandit Chevron! What about solar? BP has for many years been the largest single investor in Solar technology.
In my own long fight against the use of maritime Bunker Oil, (the planet’s greatest single source of pollution) the only practical response, and support I have received, is from two oil companies!
Oil companies are hugely risky businesses, providing a product that is increasingly difficult, and often dangerous to obtain. Beside energy, Oil provides an immense number of products, essential to human heath and welfare, yet you fail completely to acknowledge those products when you berate oil producers.
The reason why private investment in environmental technologies has decreased is that too many investors have been burned by enthusiastic supporters of IPO’s and ‘development’ projects usually either ill-considered, overly optimistic or badly managed. Even quite worthwhile projects, often wither from public apathy. The technology investor bubble has burst! Investor’s want to see solid returns, not moral or ideological tax deductible green public relations.
As always, there is some truth in what you write here. In particular, investors DO want to see solid returns, not moral or ideological tax deductible green public relations. This is, in fact, the reason we here at 2GE and so many other similar sites are experiencing significant growth in traffic: people see a multi-trillion dollar industry and want to be a part of it. Fortunately, we “crackpot utopians” and unapologetic capitalists are marching in the same direction.
Craig, I disagree. The Utopians actually hinder the development of new technology. Nor have they any real interest in investing their own money in realistic projects. These people advocate government funding (or other peoples money)to be spent on funding largely unworkable projects.
Carbon Taxes, Resources taxes, Environmental taxes, all drain the available sources of funds available to actually provide economies with sufficient surplus to afford basic care and infrastructure for their citizens, let alone investment in the future.
The Australian centre-left Labour/Green party alliance is attempting to pass an economy wide ‘carbon tax’ on the whole Australian economy.
Labour/Greens have shouted the disingenuous slogan ”Australia per capita is the worlds highest emitter of green house gas”, for so long that it is no longer even questioned. Anyone rational person attempting to dispel such obvious nonsense, is loudly dismissed as a “climate denier”.
I use Australia as an example of environmental thinking, since it is politically more akin to North America than the UK or Europe.
In the Last federal election, nearly 11% or 1.4 million voters, selected the ‘Greens’ as a primary vote. Australia is fortunate to be the home of the first practical, 4 door, 4 seat, EV. Blade EV Vehicles is a small but fully licenced mass automobile manufacturer. The Blade Electron shares some common components with Hyundai and is superior to the Mitsubishi iMev, and comparable to the Nissan Leaf. It’s also very competitive on price, and has been on sale for over 4 years!
Now you might think that such a vehicle would be an excellent vehicle for your ‘Utopians’ to support, with purchase and investment ? But, no, not even .001% one of those 1.4 million ‘green’ voters has shown the slightest interest. Not even the ‘Green Party’ itself, who despite espousing a protectionist economic policy.have yet to even acknowledge Blade, preferring the imported Mitsubishi iMev! (Mitsubishi campaign contributions to the Labour Party were evidently more important consideration).
Hypocrisy, and a desire to spend other peoples money is all you will discover from the ‘Utopians’.!