Moving Towards a Green Economy

The “Good Jobs, Green Jobs” National Conference, which was put together by an interesting mix of environmental organizations (Environmental Defense Fund, Sierra Club, Natural Resources Defense Council), built environment organizations (American Institute of Architects, U.S. Green Building Council), and major labor groups (Service Employees International Union, United Steelworkers, Utility Union of America), as well as U.S. and D.C. government agencies, explored the strategies, policies, and investments needed to move towards a clean energy economy. The idea is that government, business, environmental and labor groups must work together to accelerate the shift to a green economy.

Opening sessions featured a number of environmental leaders, including Pennsylvania Governor Ed Rendell, Massachusetts Senator John Kerry, and Steven Chu, U.S. Energy Secretary.

Governor Ed Rendell, Pennsylvania: Rendell argued that making science and technology appealing to students was critical to the future competitiveness of the U.S. He said “all countries are racing to create the next generation technologies,” implying that creating a strong U.S. skillset in science will be crucial to participating in this race.

However, he emphasized not all green job opportunities need to be cutting-edge. Rendell said each of those large wind turbines includes over 250 tons of steel. “Much of this steel is coming from Pennsylvania.” The U.S. manufacturing sector and steel workers then also have a major role to play in shaping a clean economy. Furthermore, maintaining skilled manufacturing workers in the U.S. will pay off. “Wind companies from Spain are now manufacturing turbines in America.”

Pennsylvania has spent $1 billion incentivizing these kinds of wind turbine manufacturing deals. “This $1 billion has leveraged an additional $5 billion in private sector investment.” As a result, Pennsylvania now ranks third behind Texas and California in clean energy job production.

The state has also been a leader in setting alternative energy portfolio standards, which he says spurred the growth of the clean energy sector. Now, Pennsylvania needs to update the standard so clean energy production as a percentage of total energy production can move from 18 to 22 percent. Rendell called for a clear, nation-wide alternative energy portfolio standard.

To spur the growth of a national clean energy sector, he called for a multi-faceted approach:

  • Create mandates for a national alternative and renewable energy portfolio standard. “We may not see movement on cap & trade this year, but we need this.”
  • Implement permanent tax credits for renewable energy. Right now, tax credits last only 1-2 years and create uncertainty, which, in effect, lowers investment.
  • Institute a long-term loan guarantee program to encourage the private sector to invest.

Rendell added the federal government is the biggest energy consumer in the U.S. (and perhaps the world). If the federal fleet had to run on natural gas or electricity, the market would take off for greener transportation. He said the U.S. has an abundance of natural gas, “we are the Saudi Arabia of natural gas.”

Senator John Kerry (D-MA): “We are on the cusp of an economic, environmental, security, and health revolution.” Passing climate and energy legislation will spur that revolution, and help the U.S. to reduce pollution, which has negative effects across the board. “The guiding principle in the U.S. should be the polluter pays.”

Kerry said oil and coal are finite resources, but solar power is unlimited. “In fact, there are countless alternatives.” Each year, $400 billion is sent overseas to buy foreign oil. Some 70 percent of imported oil goes to domestic transportation. Kerry said electric vehicles are a real alternative — drivers could easily plug in their cars at night when there are low electricity usage levels.

This multi-pronged revolution would also create a “jobs revolution,” creating millions of new opportunities. “What are we going to chose as the jobs of the future? They can’t be low-tech. We need to invest in new technologies, technologies that can’t be reverse-engineered.” He said new energy technologies could lead to a $6 trillion worldwide market.

China is currently investing $400 billion per year in green energy technologies. “They are now the leader in wind and solar. Not one U.S. company is in the top ten for either wind or solar.” In Germany, another leader in clean energy technology, 280,000 jobs have been created in clean energy.

In the near term, Senator Kerry thought investing in energy efficiency was the way to go, citing a McKinsey report that demonstrates energy efficiency improvements over the next 20-30 years will pay for themselves through reduced energy costs. “We can’t burn or drill our way” to innovation. Instead, the U.S. needs a price on carbon so that investment in clean technology can take off.

Steven Chu, U.S. Energy Secretary: Chu made two predictions: the price of oil will be higher in the coming decades, and we will live in a “carbon-constained” world. He also laid out a vision: Right now, imported oil is a major expense. Instead of buying sources of energy overseas, the U.S. should be producers of new energy technologies that other people need to buy.

The U.S. used to have some 45 percent of the global photovoltaic market. Now, it’s around 5-6 percent. “We are no longer leaders in batteries, fuel efficiency technologies, energy transmission technologies, nuclear, solar or wind energy.” The myth is that China competes through its cheap labor. In fact, China is investing $9 billion per month in renewable energy, with the goal of reaching 10 percent renewable energy by 2010 and 15 percent by 2020. China wants 100 GW of wind power by 2020; the U.S. will be lucky to get 20 GW.
China just invested $44 billion in a new smart grid and will invest a further $80 billion in a UHV transmission system by 2020. In comparison, the U.S. has invested $80 billion in clean energy in total.

To spur further improvements in energy efficiency, Chu called for a ramp up of residential retrofits. The $450 million that has been spent on this through the Recovery Act has reached “the whole community,” spurring job creation. Total Recovery Act clean energy funds have created some 2-2.5 million jobs, Chu says. In addition, the act should help double U.S. renewable energy production by 2012.

Chu reiterated points made by Senator Kerry and Governor Rendell, arguing that the U.S. needs a permanent wind production tax credit. “Even if foreign products are involved in a wind farm installation, almost 60 percent of the total value is domestic.” Energy companies are waiting for a clear policy on carbon. Until they get a clear signal, they will “build nothing new.” The usual coal power plant lasts around 60 years. Who can tell what regulation will look like by then? So, instead, energy companies simply patch up existing coal plants.

In related news, the U.S. Interior department recently gave its approval for Cape Wind, a controversial off-shore wind power plant, to move forward. Cape Wind represents the launch of the first major offshore wind facility in the U.S.

This is the first part in a three-part series on the “Good Jobs, Green Jobs” conference. Read part two, Rebuilding Communities through Brownfield Restoration, and part three, Philadelphia’s Cutting-edge Green Infrastructure Plan.

Image credit: Sean Gallup/Getty Images / The Guardian (UK)

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