President Obama, speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, announced the largest single energy grid modernization investment in U.S. history. The newly announced funding is designed to help the nation transition to a smarter, stronger, more efficient and reliable electric system i.e. the Smart Grid, which will provide energy-saving opportunities, increase efficiency, and help grow renewable energy sources like wind and solar.

The $3.4 billion in grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion. These investments will create tens of thousands of jobs, save energy and empower consumers to cut their electric bills.

An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country. In addition, these energy savings will lead to significant reductions in greenhouse gas emissions.

One-hundred private companies, utilities, manufacturers, cities and other partners received the Smart Grid Investment Grant awards today, including FPL, which will use its $200 million in funding to install over 2.5 million smart meters and other technologies that will cut energy costs for its customers. The awards announced today represent the largest group of Recovery Act awards ever made in a single day and the largest batch of Recovery Act clean energy grant awards to-date.

Today’s announcement includes:

Investments to Help Consumers Save Energy and Cut Utility Bills — $1 billion. This large funding stream is designed to help spur the creation of the underlying infrastructure and expand access to smart meters. This will provide consumers with access to dynamic pricing information and the ability to save money by programming smart appliances and equipment to run when rates are lowest as well as help reduce energy bills for everyone by helping lower “peak demand” (or peak shaving)and thus limiting the need for “stand-by” power plants – the most expensive power generation there is.

Making the Electricity Distribution and Transmission Systems More Efficient — $400 million. The Administration is funding several grid modernization projects across the country that will reduce the amount of power wasted in transmission loss and increase the efficiency, reliability and security of the grid by deploying digital monitoring devices and increasing grid automation. This will also help link up renewable energy resources with the electric grid.

Integrating and Crosscutting Across Different “Smart” Components of a Smart Grid — $2 billion. Much like electronic banking, the Smart Grid is not the sum total of its components but how those components work together. The Administration is funding a range of projects that will incorporate these various components into one system or cut across various project areas – including smart meters, smart thermostats and appliances, syncrophasors, automated substations, plug in hybrid electric vehicles, renewable energy sources, etc.

Building a Smart Grid Manufacturing Industry — $25 million. These investments will help expand our manufacturing base of companies that can produce the smart meters, smart appliances, synchrophasors, smart transformers, and other components for smart grid systems in the United States and around the world – representing a significant and growing export opportunity for our country and new jobs for American workers.

Will Create Many Tens of Thousands of New Green Jobs Across the Country Save Energy and Make the Grid More Reliable

When these projects are fully implemented they will create tens of thousands of jobs across the country, include many high paying career opportunities for smart meter manufacturing workers; engineering technicians, electricians and equipment installers; IT system designers and cyber security specialists; data entry clerks and database administrators; business and power system analysts; and others.

The new funding announced will help make the grid more reliable, reducing power outages that currently cost American consumers $150 billion a year — about $500 for every man, woman and child in the United States. It will accomplish this by installing more than 850 sensors – called “Phasor Measurement Units” – that will cover 100 percent of the U.S. electric grid and make it possible for grid operators to better monitor grid conditions and prevent minor disturbances in the electrical system from cascading into local or regional power outages or blackouts. This monitoring ability will also help the grid to incorporate large blocks of intermittent renewable energy, like wind and solar power, to take advantage of clean energy resources when they are available and make adjustments when they’re not.

In addition, more than 200,000 smart transformers will also be installed making it possible for power companies to replace units before they fail thus saving money and reducing power outages. Around 700 automated substations, representing about 5 percent of the nation’s total will be added. This will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.

In addition to adding critical redundancy to the network the funding will help add intelligence to the grid itself by adding a network of real time networked smart sensing devices that will provide grid operators with a situational awareness that they currently do not enjoy. In fact, power companies today typically do not know there has been a power outage until a customer calls to report it. With these smart grid devices, power companies will have the tools they need for better outage prevention and a much faster response to make repairs when outages do occur.

Help People Cut Their Energy Bills

The Recovery Act combined with private investment will put us on pace to deploy more than 40 million smart meters in American homes and businesses over the next few years that will help consumers cut their utility bills. In addition, more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use will be installed. Funding will also help expand the market for smart washers, dryers, and dishwashers, so that American consumers can further control their energy use and lower their electricity bills.

These technologies will help people spread their load as well reducing peak demand. This is critical. Reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 billion in capital costs and help lower utility bills. Since peak electricity is the most expensive energy – and requires the use of standby power generation plants – the economic and environmental savings for even a small reduction are significant. In fact, some of the power plants for meeting peak demand operate for only a few hundred hours a year, which means the power they generate can be 5-10 times more expensive than the average price per kilowatt hour paid by most consumers.

The funding is also designed to put us on a path to get 20 percent or more of our energy from renewable sources by 2020.

© 2009, Chris de Morsella. All rights reserved. Do not republish.

by Jennifer Rice, Principal, Fruitful Strategy

As consumer expectations rise and trust in corporations decline, the need for ethical business practices is greater than ever. Yet in a recession, companies seeking to cut costs will likely postpone important CSR initiatives or cut spending in favor of core business initiatives.

But it doesn’t have to be either-or. Companies that consider social and environmental initiatives as potential innovation platforms and brand builders — not expenses — will come out ahead.

The Opportunity Audit helps prioritize and inspire

To aid businesses in evaluating initiatives, (re)allocating resources and exploring white-space opportunities, we’ve developed the Fruitful Opportunity Audit. This tool maps what a company does, not what it says. That means you won’t see cause marketing programs on this audit, mainly because the Brand/Customer quadrant could hypothetically be filled with greenwash. (click to enlarge)

The columns represent the locus of initiative; whether it primarily resides with your suppliers, employees or internal operations, community or customers.

The bottom row shows tablestakes initiatives that most businesses are undertaking regardless of industry. These include basic blocking and tackling like sustainability initiatives in energy, water, waste, IT, supply chain, employee volunteerism, fair labor practices, and so on. Note that it also includes philanthropy efforts that are not directly aligned with the category or brand.

The middle row represents activities that are industry-specific. Now we’re getting into actions that are more strategically in line with your business and therefore could be more effective in reputation-building. Electronics recycling (Community/Customer), industry-related training and job creation (Employee/Community) or Fair Trade efforts among coffee and tea manufacturers (Suppliers) are a few examples.

The top row is where it gets really interesting… this is where you’ll see social-impact initiatives that directly support the brand promise. The most effective initiatives often span most, if not all columns in this row; think Plan A from Marks & Spencer, GE’s Ecomagination, Timberland, Clorox GreenWorks, and specialized ethical brands like Whole Foods and Seventh Generation. Other examples might include Best Buy’s Geek Squad Summer Academy (Community) or Fairmont Hotel’s Green Cuisine (Supplier/Community/Consumer) that aligns with their authentically local brand pillar.

Now is the time to kill sacred cows

If you plot your CSR initiatives on this chart using bubble size to approximate relative spending, you’ll see where most of your dollars are going. Is your chart weighted more heavily at the bottom or the top? If the former, how much could be shifted to brand-building without compromising on the essentials? If the latter, good job; just make sure you’re covering your bases at the bottom to eliminate risk of goodwashing claims.

This process will inevitably generate some controversial discussion around cutting philanthropic programs that aren’t aligned with your brand. NCR, a former client of mine that I helped reposition their brand around self-service technology, supports a wide variety of charities completely unrelated to their business through the NCR Foundation; buried on the last page of their Citizenship Report is a brief mention of how they are improving access to technology for disabled and areas with low literacy. That’s a fantastic example of triple-bottom line innovation driving the brand, but it’s being communicated like an afterthought. Imagine what a powerful ethical brand NCR could build if it reallocated its CSR investments in favor of value creation at the intersection of self-serve technology and social needs. (click to enlarge)

Please note that this is not intended to decrease the amount of funding that any particular non-profit should receive from corporations. Rather, if all corporations were thoughtful about which non-profits to support, then everybody wins. The non-profit could benefit from their corporate partner’s lobbying power and investment in ethical brand-building; the corporation benefits from the strategic alignment with the right non-profits. 1+1=3. The recession is a good opportunity to justify such shifts.

Finding competitive opportunities – a retail example

When you plot your top competitors on the same chart, you’ll start seeing patterns that give insights into opportunity areas for the brand. You might also want to plot related but non-competitive companies on the same chart to bring new ideas to the table. Below is an illustrative example from the retail space; you’ll see that Marks & Spencer in the UK has done a great job creating ethical brand drivers across all columns. Retailers in the US can borrow ideas like branding internal initiatives similar to Plan A. Likewise, M&S could borrow an idea or two from Best Buys’ branded Employee/Community initiatives. (BTW, don’t get hung up on circle size; I don’t have enough info to map to investment levels. Just take it for the illustrative example that it is.) (click to enlarge)

You can push the innovation potential even further by mapping completely unrelated companies or industries for inspiration. For example, what could micro-finance teach the retail industry? If I’m Target, perhaps I combine “enabling individual potential” of Kiva.org with my “design/value” brand promise to create a program that gives design students (or employees!) an opportunity to be discovered, promoted and funded for their product design ideas. That’s a program that spans all four columns of Brand-Builders.

I’m interested in your feedback. Is this a useful framework? What are the roadblocks to adopting this approach in your company? Who would actually drive this… CRO or CMO? CEO? And of course, if you see anything big that I missed in the retail audit, let me know.

© 2009, Jennifer_Rice. All rights reserved. Do not republish.

At the Midwestern Governors Association Jobs and Energy Forum held in Detroit last week, the group released its Platform for Creating and Retaining Midwestern Jobs in the New Energy Economy (Jobs Platform) and the Midwestern Energy Infrastructure Accord (Infrastructure Accord). These two documents are part of an effort by these Governors to position the Midwest as a leader in the new energy economy.

The Jobs Platform, which was initiated this year by Michigan Gov. Jennifer Granholm as part of her agenda as chair of the MGA, outlines regional goals and strategies for a trained, sustainable workforce. In addition to overarching strategies for job creation and retention, the document lays out technologyspecific strategies in four sectors that form the cornerstone of the Midwest’s jobs and energy leadership: energy efficiency, renewable electricity, bioeconomy, and advanced coal with carbon capture and storage. The MGA’s Infrastructure Accord includes agreements by Midwestern governors to expand transmission capacity, adopt smart grid technologies, build new pipelines for biofuels and for the capture and storage of carbon dioxide, and deploy a refueling system for biofuels and other low-carbon transportation fuels.

MGA has appointed an Advisory Group that developed a set of strategies and policy options that will result in significant impact across the Midwestern region. Advisory Group members used the following guiding principles to inform their work:

Regional: Results in creative cross-border cooperative policies that distinctly and positively impact the Midwest as a region, as well as state and regional economies and labor markets.

Build on Existing Strengths: Work with existing firms and industries to ensure they have the resources and tools necessary to grow their businesses and equip their existing workforce with the skills necessary to compete in the new energy economy.

Forward Looking and Transformative: Establishes or reinforces infrastructure to position existing and emerging industry sectors for growth, and to improve competitive advantage through economic and workforce development initiatives.

Emphasize Quality Jobs: Targets creation and retention of jobs that provide opportunities for worker skill improvement and career advancement; that support middle-class families; and that address projected future labor-force needs for new energy industry sectors.

Sustainable: Demonstrates commitment to sustain policies and strategies for meeting industry and worker needs over time.

Collaborative and Coordinated: Supports teams of workforce and economic development professionals within the states to implement initiatives that are aligned and leverage the resources and services of each state agency and its partners. Nurture Leadership: Identifies and nurtures private- and public-sector leadership to support the workforce and economic development needs and goals of the industry sectors
within the new energy economy.

Replicable/Transferable: Produces outcomes that are applicable and replicable for different industry sectors and/or a mix of states or regions within the states, understanding that each state has different assets to leverage.

Measurable: Encourages accountability that establishes a baseline and uses a framework to define intended impacts and outcomes of the state policy options and cooperative regional agreements.

At the forum, the MGA also released its Midwestern Energy Security and Climate Stewardship Roadmap: Advisory Group Recommendations (Energy Roadmap). These recommendations have been in development since the governors convened in November 2007 and agreed to the goals laid out in the MGA’s Energy Security and Climate Stewardship Platform for the Midwest (Energy Platform). The Energy Roadmap provides a menu of policy options for the region’s governors to adopt that would be most applicable to their state’s individual and unique needs and circumstances to meet the goals of the Energy Platform.

The states participating in the Platform for Creating and Retaining Midwestern Jobs in the New Energy Economy, the Midwestern Energy Infrastructure Accord, and the Midwestern Energy Security and Climate Stewardship Roadmap: Advisory Group Recommendations (Energy Roadmap) are Michigan,South Dakota,  Iowa, Indiana, Wisconsin, Missouri, Kansas, Minnesota, Illinois and Ohio.

To view the documents or for more information on the forum, visit  www.midwesterngovernors.org/energy.htm.

Download The Platform for Creating and Retaining Midwestern Jobs in The New Energy Economy 2009

Download The Midwestern Energy Infrastructure Accord (Infrastructure Accord).

Download The Midwestern Energy Security and Climate Stewardship Road 2009.

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

The excitement surrounding the biofuels market opportunity has been tempered somewhat by its many challenges, which include ethical questions of food versus fuel, limited availability of inexpensive feedstocks, petroleum price volatility, overcapacity of production and the global recession.  However, a two recent reports from both Pike Research and Bio Economic Research Associates  forecast that, despite these significant challenges, the combined biodiesel and ethanol markets will reach $247 billion in sales by 2020, up from just $76 billion in 2010. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022.

“In the near term, the biofuels market looks like a train wreck,” says managing director Clint Wheelock.  “The economics of ethanol and biodiesel are not yet competitive with petro fuels, and governments have pulled back some of their support.  However, in the 10 to 15 year timeframe, the outlook remains very positive.  The long-term commitment of national governments to foster robust biofuels markets remains solid, and technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum.”

Pike Research’s report, “Biofuels Markets and Technologies”, anticipates three key waves of next generation biodiesel over the next several years.  Fuels based on waste greases will hit the market first in 2010.  Jatropha-based fuels will begin having a significant impact on the market in 2014.  The third big wave will be algae-based biodiesel, which will achieve commercial availability in 2012 and will have a deeper effect on the market beginning in 2016.

A push for building advanced production of biofuels has the potential to create thousands of jobs, stimulate the stumbling economy and move the nation towards a more independent and secure energy future. A report released by Bio Economic Research Associates, titled U.S. Economic Impact of Advanced Biofuels Production: Perspectives to 2030, analyzed how growth of an advanced biofuels industry will impact four areas critical to U.S. economic recovery, including job creation, economic output, energy security and investment opportunity.

The report cited study results which showed that direct job creation from advanced biofuels production could reach 29,000 by 2012, rising to 94,000 by 2016 and 190,000 by 2022. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022.   Investments in advanced biofuels processing plants alone would reach $3.2 billion in 2012, rising  to $8.5 billion in 2016, and $12.2 billion by 2022. Cumulative investment in new processing facilities  between 2009 and 2022 would total more than $95 billion.  Direct economic output from the advanced biofuels industry, including capital investment, research and development, technology royalties, processing operations, feedstock production and biofuels distribution, is estimated to rise to $5.5 billion in 2012, reaching $17.4 billion in 2016, and $37 billion by 2022.

“The advanced biofuels industry could create 29,000 new jobs and create $5.5 billion in economic growth over the next three years, as companies continue to deploy the technology,” said Brent Erickson, executive vice president of the Biotechnology Industry Organization. “As the advanced biofuels industry grows to the levels established in the Renewable Fuel Standard, it will create more than 800,000 new jobs throughout the economy. These new jobs will be in sectors of the economy that have experienced the highest rates of job losses over the past year, including agriculture and construction.”

Recommended Green Career Resources:

GreenCareerCentral.com – A Virtual Career Center. Get Clarity, Get Motivated, Get Hired!

THE COMPLETE GREEN JOB GUIDE 2009: SECRETS FOR GETTING THE JOB YOUR WANT – Discover How To Unlock The Booming Green Economy For Your Job Search And Future Financial Security with the 10 Breakthrough Steps You Need To Know To Find And Land A Green Job Quickly.

CLEANTECHIES RESUME AND COVER LETTER WRITING SERVICE – Cleantechies help job seekers ease the transition from mainstream to CleanTech. Learn More!

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

A majority of likely voters – 71% – favors the American Clean Energy and Security Act recently passed by the House of Representatives, and two-thirds (67%) believe Congress is either doing the right amount (22%) or should be doing more (45%) to address global warming, new Zogby International telephone poll shows.  Just 28% believe that Congress is doing too much.

Respondents were read the following statement regarding the American Clean Energy and Security Act:

“The House of Representatives recently passed the American Clean Energy and Security Act, which would require electric power companies to generate 20 percent of their power from clean, renewable energy sources, such as wind and solar, by the year 2020.  Also included is a global warming plan which would reduce greenhouse gases from sources like power plants and factories by 17 percent, and an energy efficiency plan which includes new appliance standards and building codes to conserve energy.”

Favorable views for the bill were high among all age and income groups and even among Republicans, with 45% having a favorable view of the bill. Seventy-three percent of Independents and 89% of Democrats also took a favorable view of the American Clean Energy and Security Act.

The survey finds that two-thirds (68%) of likely voters believe a new American energy policy will not result in job losses, with a majority believing such efforts could instead bring about job growth. Respondents were asked how “efforts to reduce global warming and promote clean energy” will impact American jobs, and more than half (51%) believe this would lead to new job creation, while another 17% believe these efforts will not affect American jobs. Twenty-nine percent feel efforts to promote clean energy will cost American jobs. Those who believe these environmental efforts will create new American jobs outnumbered those who disagreed in all age and income groups. Among self-described political independents, 53% agreed that new jobs will be created, and only 24% thought jobs would be lost.

When presented with arguments for and against the American Clean Energy and Security Act, including concerns about the impact of the legislation on energy prices, a majority (54%) believe the Senate should now take action, with two-fifths (41%) preferring that the Senate wait.  Fifty-four percent believe the Senate should take action on the bill because “we need a new energy plan right now that invests in American, renewable energy sources like wind and solar, in order to create clean energy jobs, address global warming and reduce our dependency on foreign oil.” Forty-one percent believe that the Senate should instead wait because “the House energy bill is a hidden tax that will cost thousands of dollars every year in increased energy prices, weaken our economy further, and cause America to lose jobs to China and other countries.”

“Clearly, voters strongly favor the ideas outlined in the bill. Support for action on clean energy and energy efficiency was strong coming out of the election, and it is still strong today.  Even when presented with the concerns some have raised about the potential costs associated with this legislation, most likely voters still want the Senate to act quickly to bring about a new energy plan for America,” said Zogby International Research Analyst Sam Rodgers.

The Zogby International telephone survey of 1,005 likely voters was commissioned by the National Wildlife Federation and was conducted from July 31-August 4, 2009. The survey carries a margin of error of +/-3.2%.

The survey also shows 47% of likely voters would take a favorable view of their Congressperson if he or she voted in favor of the bill, while another 21% said it would make no difference in their opinion. Far fewer – 29% — said they would view their Congressperson unfavorably if he or she voted in support of the bill.

Regarding Congressional action on global warming, a small majority of Republicans (54%) say Congress is doing too much, but a total of 42% say it should do more or is doing the right amount. Only 26% of political independents say Congress is doing too much, while two-thirds of Democrats (65%) want more Congressional action. More than 40% of every age group also wants more from Congress when it comes to taking action to combat global warming.

“Most voters would view their member of Congress more favorably or would not have their opinion impacted either way by a “yes” vote,” said Rodgers. “This survey shows clear movement in favor of Congress taking greater action on global warming and most Americans believe this legislation would give a much-need boost to the American job market in this down economy.”

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

President Obama has framed part of his recovery plan around the creation of new jobs.  He has used Spain and other European countries’ green jobs creation endeavors as inspiration (not necessarily models).  However, a  study , entitled “Study of the effects on employment of public aid to renewable energy sources,” by researchers at Spain’s King Juan Carlos University questions whether “green jobs” are worth the public investments.  Lead author, Gabriel Calzada Alvarez, uses Spain’s investments in such jobs during the past decade as a case study to demonstrate that sustainable energy investment destroys jobs and the economy.  I think there are numerous flaws in Calzada’s study.  For one, he deviates from the traditional research peer-reviewed methodologies used to estimate jobs impacts, which tend to yield more accurate results.

In this update, we have Spain’s response to his claims, proof that his data was falsified, an explanation of how the renewable energy investment did not have the major negative impact on business that Calzada claims, that his analysis was too simplistic to be applied in any real world model,  and what most economists believe is the cause of Spain’s high unemployment rate.  I will also bring to light extremely relevant facts, that Calzada fails to mention or factor in to the study.  I will also review the US’s history and results from renewable energy investments.  That’s right we have been investing in renewable energy for years.   However, before I go into what is wrong with the study, lets review his conclusions.

Key Points from The Study

The author argues that a huge price has been paid for Spain’s broad support to the construction and production of electricity through renewable sources and  says the U.S. will lose about nine jobs for every four green jobs created.  The study surmises that  only one out of ten green jobs has been created at the more permanent level of actual operation and maintenance of the renewable sources of electricity and that green jobs actually destroyed other types of jobs elsewhere in the economy. The author also claims that the programs creating green jobs also resulted in the destruction of nearly 110,000 jobs elsewhere in the economy, or 2.2 jobs destroyed for every “green job” created.  The study asserts that jobs were lost in metallurgy, non-metallic mining and food processing, beverage and tobacco. Calzada also says that Spanish citizens must cope with either an increase of electricity rates or increased taxes (and public deficit)–consumes enormous taxpayer resources, and the US is about to repeat the same mistake.  He also claims that green jobs programs chase energy intensive companies and industries away, and argues that sustainable energy is expensive, inefficient energy and not feasible.

Scary huh?….. I dunno.  Let’s back up a bit and take a look at the FACTS…all of them.

Let’s Look at How Calzada Reached His Conclusions

When you look at a complex issue, with many variables, and do not take into consideration those variables, you almost always inevitably end up with extremely skewed results.  For instance, applying Spain’s experience to the United States, might be a faulty approach because the US does not have the same incentive structures that were instituted by Spain.  Spanish incentives in support of Renewable Energy technologies has been in the form of Feed In Tariffs (FITs) that have reached levels up to $0.60/kWh of energy produced. This varies markedly from the typical U.S. approach of employing Producer Tax Credits (PTCs) to stimulate growth, which are typically on the order of $0.02/kWh.

Getting skewed results are even more likely if the numbers used are incorrect.  Brad Johnson of the Work Room has pointed out that the number of green jobs cited in the study as resulting from Spain’s renewable energy program are way off.  According to the United Nations, official estimates are 188,000, yet Calzada only lists green jobs 50,000 jobs ?? and does not explain why he uses those dramatically different numbers.

The study works from the assumption that public spending crowds out private spending.  Most economists believe, and history has proven that public spending increases demand for resources, not decrease it.  For example, after the Great Depression in the 1930’s spending to create roads, bridges and other infrastructure increased demand for labor, equipment and materials.   Green jobs should not crowd out other types of jobs because the public investments are supporting the private sector.  There is a great deal of historical data available that demonstrates that public investment in the nation’s physical economic infrastructure improves private-sector performance by raising average productivity and contributing to private-sector growth.

Looking at The Results of Past US Government Green Investment Programs and The Study’s Relevance

The study does not provide an analysis of the full range of the types of jobs that are being funding in the Recovery Act.  The study limits its analysis to just cleantech jobs that are focused on in Spain.  It ignores any inclusion of analysis of the jobs created as a result of jobs programs dealing with energy efficiency, conservation, light rail, or mass transit. Historically,  these types of public investments have demonstrated to pay a high rate of return in a relatively short period of time.   These jobs also create a large number of jobs in sectors of the economy that have been hit hard by the current crisis, such as manufacturing and construction.  So instead of causing a loss of jobs, they are likely to do what they have done in the past… creates jobs for those who do not have jobs.

(See National Renewable Energy Laboratory Response to the Report Study of the Effects on Employment of Public Aid to Renewable Energy Sources from King Juan Carlos University (Spain)

The majority of the public investment in renewable energy in the United states is going toward the private sector in the form of tax credits, loans and similar tools that are designed to encourage investment.  For example, the U.S. is establishing a Clean Energy Investment Agency.  So, how is that going to cause job loss and business retraction, when businesses are receiving assistance?

Public Investment in Renewable Energy in the Renewable Energy Sector in The US is Not New – It’s Been going On For Years

The United States has been investing in renewable energy since the late 1970s in the form of production tax credits and investment tax credits, at both the federal and state level. As a result, according to the Annual Energy Outlook 2009, the wind power industry has grown more than 25% a year and employs more people than the coal industry.  However, there is no data available that I’m aware of that shows that wind jobs impacted on coal jobs.  The Recovery Act extended these pre-existing business incentives.  The Energy Information Administration estimates that based on past performance, these public investments will create $24 billion in new private investment  and 32,000 new jobs sustained over the decade.  That is just the wind energy sector. There are similar projections for solar and geothermal power.  (See An Analysis of Three Myths Regarding The Green Jobs Programs of Spain and The US )

Gas, petroleum and coal also receive incentives from the government.  If you apply Calzada’s model using existing data from the Department of Energy to those industries, similar investment in coal would yield 18,500 jobs and  13,000 jobs would be gained by  natural gas and petroleum. This shows that you get more bang for your buck from wind power investments and that a shift to wind power would yield a net employment gain.

According to a recent study by PricewaterhouseCoopers, entitled “CleanTech Comes of Age”, when the government spends in a sector, private investments increase.  This has proven to be truth for biotech, agriculture, pharmaceuticals and …you guessed it…renewable energy.  These policies provide more certainty for investors leading to larger investments in renewable energy technologies. This assessment is supported by numerous private sector studies based on investment activity within the past ten years.

Spain’s Current High Employment Level is Still Lower Than It Was Before The Green Jobs Programs Were Implemented

It seems possible that Caldaza is not presenting the numbers in a relevant and accurate way.  In addition to using inaccurate numbers and omitting several sectors from his analysis, he fails to factor in that Spain historically has had very high unemployment rates since the restoration of democracy thirty years ago, (source: International Monetary Fund), while the US has not.   In fact, since the green jobs program has been initiated in Spain, unemployment has been  much lower than before it was put in place.  At the time the study was conducted, unemployment was lower then it was before the green jobs program was launched.  Before the green jobs program was put in place, going back to 1980, there are eighteen years when unemployment was higher in Spain than it is now, with unemployment rates ranging between (24% and 15%).  The highest years were  between 1993 and 1997 with employment ranging between  24% and 20%.  However  between 2001 and 2007, unemployment has ranged between 10.5 and 8.5%) still pretty high,but historically low for Spain.  The current US unemployment numbers at its highest levels in decades, is lower than Spain’s lowest unemployment numbers.  Let me state that, while I think the public investments in renewable energy helped to lower the unemployment rate,  I think much of the jobs growth in Spain was due to its real estate bubble.

Additionally, the author never identifies which jobs are destroyed by green jobs, or how that process of job destruction occurs.   To attribute recent unemployment numbers only to green jobs promotion, seems to me to be a questionable approach.  The study fails to establish any type of cause and effect.   Spain might have lost those jobs even if they did not have a green jobs program;  or it is possible that the green jobs program may have prevented even more jobs from being lost.

Two weeks ago, José María Roig Aldasoro, Regional Minister of Innovation, Enterprise and Employment Government of Navarre rebutted Calzada’s claims in a letter arguing that that green investment “has created wealth, employment and technological development” in Spain.  Navarre is a small region of Spain that is  well-known throughout the world for its development in renewable energies. After 20 years of development, 65% of the electrical energy consumed in Navarre originates from renewable energies.

Aldasoro breaks down the actual history of green job creation in Navarre:

– 1994: Unemployment at 12.8%, first wind farm erected.
– 1998: Unemployment at 10%, 100 installed megawatts of wind power.
– 2001: Unemployment at 6.8%, two R&D and worker-training centers are opened.
– 2007: Unemployment of 4.76%, total of 100 new renewable-energy companies created, representing 5% of total GDP.”

An article in The Brattleboro Reformer has pointed out a flaw in Calzada’s heavy use of the idea of “opportunity cost.”  Opportunity cost is the true cost of something is what you give up to get it— or as The Brattleboro Reformer  explains it…” that a dollar spent on green jobs is a dollar that can’t be consumed or invested by the private sector. Thus, a job that depends on consumption might disappear or not be created.” As the Brattlebore Reformer points out, this doesn’t apply in Spains’s case.

Spain’s Bursting Real Estate Bubble is Likely The Major Cause of Job Loss

Most economists attribute much of Spain’s job losses to the bursting of its real estate bubble. As recently as two years ago, Spain was creating a third of all new jobs in the European Union.  Most of these jobs were a result of its booming construction sector.    (Sound eerily familiar?) Real estate accounted for almost 18% of Spain’s gross domestic product last year, contributing to 3.6% annual growth. Once interest rates rose,  the housing bubble burst, and the jobs disappeared.   Canada, the UK, Ireland, and the US also experienced a bursting of their real estate bubble which led to rising unemployment.    If green jobs caused job losses in Spain and not the real estate bubble bursting as occurred in the US, the UK, Canada and other places, then he needs to explain how Spain is different than other countries with real estate bubbles that burst, and how green job creation impacts the real estate and construction industries that initially contributed to job growth.     He does not do that.  Economists predicted the outcomes of these real estate bubbles a few years ago.  None of them cited green jobs policy as a major factor.

The Two-Tiered Labor Market Is a Secondary Cause of Job Loss in Spain

Another cause of the job losses in Spain is its two-tiered labor market.   Young people in  Spain have fixed term contracts, so it’s easy to fire them, whereas older people have contracts worded so that it is very difficult to fire them.  As a result, one in three adults under 25 are unemployed.    These short-term contract legalities and their impact on firing was not addressed in Calzada’s study, however, a number of economists have cited it as a factor in the job losses.

No Additional Taxes Were Levied Against Business To Finance The Green Jobs Program

Keith Johnson, lead writer of  The Wall Street Journal Blog, Environmental Capital points out that that Spain’s support for renewable energy came out of existing tax revenues and that the Spanish government has reduced corporate income-tax rates (Source: KPMG), most recently this past January.  While renewable energy spending might have prevented spending in other areas, the author does not explain how government spending prevented or discouraged industry from spending.  He also explains that the Study doesn’t actually identify those jobs allegedly destroyed by renewable-energy spending, but simply tells you what the Spanish government is spending.

In in the comments below, Nuno Cardoso pointed out another issue not previously raised.“For all the renewable energy sources (solar, wind, wave), the initial investment is upwards of 95% of the total costs, whereas maintenance and operational costs are residual. In this respect, renewables are similar to nuclear power, and unlike coal or oil-based power plants, where a large portion of the costs is the fuel itself. This explains much of the enormous costs per green job: the benefits for the investing country only start to become visible many years after the investment has been made. Also, was the value of the produced energy, being the primary goal of the investment, taken into account?  Another thing that certainly wasn’t mentioned in the study was that Spain reached a peak of 40% in wind power this last March.

An Example Of Green Jobs Lowering Unemployment Rates

If you look at Germany’s efforts with using renewable energy investment to create jobs, renewable energy jobs in Germany shot up to 249,300 in 2007, almost double the 160,500 green jobs in Germany in 2004. This was due to massive investment in the renewable sector.  There are over countries in Europe, in addition to Germany that have seen employment growth as a result of investment in renewable energy.  Calzada does not even acknowledge them, so it is not surprising that he provides no comparison of their green jobs programs, to Spain’s.  Nor does he explain why those countries did not lose jobs as a result of investment in renewable energy.

Eternal Hope on the Conservatism is Dead blog, raises three additional salient points: While his blog has an obvious anti-conservative slant,  I think the points he raises are valid.

“1. The problem with their entire line of reasoning here is that they are caught in short-term thinking as opposed to long-term thinking. In the short term, coal may well be the best alternative.  But in the long term, given the alarming studies that show that man-made global warming is a major problem, we can’t afford not to switch to a carbon neutral economy.  So, the solution here is clear — combine antipoverty problems with efforts to become carbon neutral.”

2. The study fails to take into consideration the benefits that would happen when renewable energy is brought into the equation.

3. The study then suggests that renewable energy is subject to boom and bust. But the problems with Spain’s boom and bust cycles have nothing to do with renewable energy in and of itself, but with the boom and bust mentality that was part of the Bush years.    If the US government creates a sound financial basis for renewable growth that is not based on out of control debt and which rewards people who live within their means, then we can avoid the problems of boom and bust that have plagued previous efforts.”

Who is Calzada – His Conclusions Were Reached Before The Study Was Conducted

Let look at the author of the study.  Who is Calzada.  Gabriel Calzada is a founding member of the Prague Network, an international grouping of institutions aimed at countering panic connected with global warming.  He is also a fellow at the Centre for the New Europe, a Brussels-based libertarian think tank that in recent years has accepted funding from ExxonMobil.  ExxonMobil has a history of funding groups that have misrepresented the science of climate change by outright denial of the evidence.   According to a study conducted by the Union of Concerned Scientists in 2007, ExxonMobil had spent over $16 million to fund climate change skeptic groups as part of a “tobacco-like disinformation campaign on global warming science.” They have continued to channel money to these groups.  Since the study was publish, Calzada has become a popular speaker at the events sponsored by these groups and has appeared frequently on Cable news shows in which the hosts and producers are opposed to green jobs.  He has yet to appear on any show that has made any inquiry about his methodology.

Calzada is also the founder and president of the Fundacion Juan de Mariana, another libertarian think tank.   The libertarian movement in  Spain does not believe in taxes, so it is my guess that they would not support many programs paid for with tax dollars.  Calzada is also an admitted climate change skeptic and recently spoke at the International Conference on Climate Change (2009) hosted by the conservative think tank, the Heartland Institute. The Heartland Institute is another well-known hub of climate science denial. This year’s conference was its second effort on climate change, and attracted representatives from conservative and free enterprise groups around the world; many of their members and supporters deny climate change and work aggressively against renewable energy and environmental endeavors.  A large number of the attendees also came from bodies funded by ExxonMobil and other fossil-fuel companies.  Other big oil funded groups that have promoted the study include: The Institute for Energy Research (IER), Americans for Prosperity, and the American Energy Alliance (AEA),

In a recent interview, (in Spanish)  Calzada asserts that scientists are deeply divided as to the cause of global warming.  He claims  that solar and water vapor activity from the earth have a large impact on global warming and that human activity is minor in comparison.  He questions if this small creation of ‘gases’ by human activity would have an impact compared to other natural activity.  He also does not believe in the kyoto protocol and claims that the green economy is a way to to ‘ration’ economic activity. My understanding is that the vast majority of scientists (specifically those not paid by oil companies) are not divided over the causes of global warming.

A Strange Target Audience

Something else that stood out is that Calzada wrote the study to specifically speak to the US.    That is an odd choice of audience to me.  It seems that this cautionary tale would normally apply to Spain and its policy makers–speaking to their issues, so that they could perhaps adjust course by reshaping their energy policy.  As we speak, Spain is investing even more money into green programs, as part of their stimulus. If Calzada truly intended to to use this case study to warn others, why not also warn other countries in the European Union,  of which Spain is a part of; or Canada and China, who are also poised to start a green initiative.

Considering Calzada’s strong views against the realities of fossil fuels and climate change,  his affiliations with groups who are known for denying climate change, his willingness to accept funding from an organization who is notorious for funding studies to serve as propaganda, and his audience focus,  it would be wise to at least closely examine and question the conclusions he reaches.    This background would explain why Calzada failed to address factors that other economists considered.  If he reached his conclusion before doing the study, there would be no reason to address issues like cause and effect.  Considering all of the above, I think Calzada has serious credibility issues.

So while it is possible that Spain’s investment in green jobs has cost it twice as many jobs in non-green sectors, we have yet to see a study that provides the empirical data to prove it.   If this is true, we need to know it, so we can figure out where the Spanish went wrong and identify alternative solutions.   Calzada did neither.  Since he does not recognize that there is a climate crisis or that fossil fuels  will eventually run out,  he seems to take short-term view in his approach to conducting the study.    With so much data proving otherwise and so much at stake, I do not think that we have the luxury of taking a  possibly politically motivated, incomplete, study seriously.

I do not think the purpose of the study was to point out flaws in Spain’s economic policy, but to raise doubt and shut down support for similar policies in the US.   The oil industry and climate deniers swill continue to use this study for nefarious purposed and others will pop up to lend credence to these theories.  The media will continue to treat these studies seriously without investigating the credibility of the claims made.

So now that we know that this likely flawed propaganda designed to protect the financial interests of the oil companies and possibly to support the views of Spain’s Libritarian movement, as well as those who deny climate change, lets get back to the work of protecting the environment,  creating renewable forms of energy, and creating green jobs.

© 2009 – 2010, Tracey de Morsella. All rights reserved. Do not republish.