Low-Carbon Policies Create Jobs and Spur a Healthy Economy

By Kristen Kleiman

A popular talking point for many years linked low-carbon policies to job loss. Further, some critics say green policies are a drag on the economy, leaving blue-collar workers behind. But in this day of he said/she said, fake news, if-I-believe-it, it’s-not-a-lie, kind of atmosphere, let’s look at the facts regarding job creation and losses in relation to low-carbon economic policies.

A politicized argument has been framed that salt-of-the-earth, blue-collar workers must sacrifice their jobs for the advancement and growth of elite white-collar jobs — but the reality is anything but. The job market shift is essentially about capitalism: how economic progress finds ways to move people out of dying industries and into new industries with living-wage jobs.

First the bad news: If you are a coal miner, chances are you have lost your job or are nervous about losing it. That’s because the coal-mining industry has lost 26,000 jobs, or 30 percent of its workforce, since 2010. To make matters worse, most coal-mining jobs are located in rural or semi–rural areas with average annual incomes lower than the national average.

During the presidential campaign, we heard a lot about saving coal jobs. According to the Bureau of Labor and Statistics (BLS), about 58,000 Americans were employed in the coal-mining sector in January 2017. To put that in perspective, that’s less than .04 percent of total American jobs, or approximately the same amount of people employed in retail sewing and needlework.

In fact, of the roughly 350 industries listed by the BLS, only about 10 percent had fewer employees than coal mining. And although job losses in coal are a devastating problem to the affected communities, blaming low-carbon regulations for this situation is not warranted.

Approximately 86,000 Americans worked in coal-mining jobs in 2010 — that equates to a loss of almost 30,000 workers in less than a decade.

Contrast that rate with the jobs created by a low-carbon economy. In 2010, renewable energy accounted for about 175,000 U.S. jobs. According to a recent U.S. Department of Energy (DOE) report, that figure grew to almost 800,000 workers employed in low-carbon electricity generation by January of this year.

Most of the job growth in renewables can be attributed to solar and wind development. Of those 800,000 jobs, 374,000 were in solar and 102,000 in wind for a total of 475,000 jobs — more than 2.5 times the number of jobs these sectors provided six years ago. And the outlook is positive: The DOE reports solar employment increased by 25 percent in 2016, while wind employment increased by 32 percent.

It is important to note the types of jobs created by low-carbon policies. According to a December 2016 report by the Solar Foundation, the installation sector accounts for 57 percent of all solar-sector jobs, and manufacturing makes up less than 15 percent. Moreover, almost two-thirds of all solar jobs were in the residential market in 2015.

Growth in the solar industry means the creation of blue-collar jobs that stay local and cannot be outsourced to other countries. These professions involve locally-based workers who, in turn, spend their money locally. And, importantly, jobs are in suburban and semi-rural areas where employment is needed the most.

So, what is driving this impressive growth in jobs? State-based policies have been shown to drive low-carbon employment more than a state’s physical attributes. Massachusetts is a good example of this: It ranks as the 26th sunniest state, but is positioned as second in solar employment with over 15,000 jobs in 2016. Why? Because the state provided progressive tax and feed-in tariff incentives to bolster a renewable energy industry which, in turn, provided much-needed jobs in manufacturing and in trades like plumbing and electricity. Over half of Massachusetts’ solar jobs were in installation and 14 percent in manufacturing, with an average hourly wage of $21.

Contrast these rates with states that receive the most sun: Arizona and New Mexico, which rank seventh and 27th in solar jobs, respectively. It would seem obvious that given the amount and quality of sunshine in Arizona and New Mexico that each locale should have booming solar industries. But without the right incentives to attract early-stage capital, they have largely missed the boat.

Even more perplexing is that in Arizona and New Mexico, where electricity for cooling is the predominate use of energy, renewables make far more sense than in northern states like Massachusetts -- which are less sunny and warm and which must continue to rely on fossil fuels to heat the majority of homes for the foreseeable future.

Beyond jobs, the low-carbon economy benefits the rural poor even more directly. According to the American Wind Energy Association, U.S. wind farms pay $222 million a year to rural landowners, with more than $156 million going to landowners in counties with below-average incomes.

The demise of the coal industry and the decline of traditional fossil fuels is a result of capitalism, not a concerted effort to undermine an industry. The reason why coal is a failing industry has more to do with competition from the record-low rates for natural gas than the rise of renewables. Natural gas investments are making electrical generation via coal obsolete. Renewable energy didn’t kill coal, nor did low-carbon regulations. Capitalism killed coal.

If the price of electricity from solar and wind become less costly than natural gas production, renewables may yet render fracking obsolete. That’s just how capitalism works. Better, cheaper products replace higher-priced, less-efficient ones. The fact that renewables don’t generate greenhouse gasses and nasty pollutants is an important co-benefit, but not the driver of investment in those assets.

Nobody wants to see people lose their jobs. But to suggest that low-carbon policies are job-killers would be inaccurate. In fact, the opposite is true — they are job creators.

To press their partisan viewpoint, some have made the case that new industries must survive from infancy without government assistance in order to be considered as established or successful. For context, we need only look to the U.S. government’s support of regional roads in the early 20th century, when many states imposed fuel taxes that were used exclusively for road construction to accommodate the automobile. This successful program is a prime example that regulatory policies that encourage investment will create new industries, ultimately creating more jobs.

An economy based on low-carbon energy should be seen as progress: It creates jobs that can’t be outsourced, stimulates new products and designs, increases American energy independence, and, in the end, makes our economy and planet healthier.

Image credit: Flickr/Centre for Alternative Technology

Kristen Kleiman is the Director of Investments for The Climate Trust