The idea of green jobs — that economic development can take place through the preservation and enhancement of our environment — seems to be completely dead. Locally, recent bad press for Seattle’s Community Power Works program and the failure of the hailed Solyndra solar venture have fueled skepticism, allegedly proving that green jobs programs just don’t work. But a closer look at the facts should lean to a different conclusion. After all, what part of saving energy costs is a bad thing? Unfortunately, the basic and rather conservative idea of creating jobs through energy efficiency has become the latest casualty of our ongoing political war over the role of government in our economy.
When I was at Sightline Institute I read, thought, and wrote quite a bit about green jobs. I began my research at the height of stimulus fever, 2009. The basic theory behind green jobs is that by investing money in things that improve the environment and reduce our dependence on fossil fuels we can generate more economic activity. Blend in some Keynesian demand-side economics, social and economic justice and you’ve got a winning idea, right?
When I talked around the state in 2010 in favor of Referendum 52, a ballot measure that would have spent money on making schools more energy efficient, I would often explain that, “Insulation doesn’t install itself.” Spending a half billion to reduce energy spending and lengthen the life of school buildings, for example, would require lots of workers.
In fact measures to tighten up school buildings are often as basic as “Turn out the lights when you leave a room,” or “Don’t be wasteful.” And here’s the thing: Schools already borrow and spend money on energy efficiencies that save real money. One small school district in the state, Burlington-Edison, realized a savings on energy costs of $32,000 annually, by completing lighting, water, and ventilation retrofits at the High School, Westview Elementary, and the District Office Building. That savings is about what it costs to hire a new teacher. And their experience is common across the country.
An extensive study of the topic of energy efficiency by McKinsey and Company found that implementing basic improvements to energy use and performance at scale across the country could generate as many as 1.7 million new jobs, save $1.2 trillion by 2020, and reduce greenhouse gas emissions associated with climate change by 1.1 gigatons during the same period. McKinsey also found that such measures could reduce energy demand by 9.1 quadrillion BTUs or 23 percent. You’d think politicians would be pursuing these savings, especially during a massive economic downturn.
But the term “green jobs” has become synonymous with “boondoggle”: Lots of money spent and no jobs created. I’ll agree that the last round of economic stimulus didn’t work, but not for the reasons generally put forward. It was not a fundamentally bad idea. We simply didn’t go far enough. Now debt fear has gripped the country, making spending more money now on large-scale capital improvements for energy efficiency a non-starter. Politicians have strangely started to focus on austerity, when spending is what we need. Of course, Paul Krugman makes this case much more strongly than I do.
Make no mistake — I’m no fan of Obama's economic policies; they have only made things worse with the economy. Attaching the Obama “magic” to green jobs was a terrible mistake.
It is also true that local programs to save energy have proved dissappointing. One of the big problems with Community Power Works was that the city budget office staff blocked access to low-interest bonds called Qualified Energy Conservation Bonds. They claimed to be protecting Seattle’s bond rating, but critical time was lost while debt hawks hid the city’s credit card. Now the skeptics heckle from the sidelines about the fact that the program hasn’t taken off.
The truth about green jobs is pretty simple. First, private companies and government agencies have been borrowing and spending money for decades on energy efficiencies, and paying for the debt they incur with the money they save from those efficiencies (see the State of Washington’s LOCAL program, for example). That will continue without any interruption and there are lots of private companies, big and small, like McKinstry, which make lots of money and employ lots of people doing this work.
Second, energy prices will go up. And when they do, the energy efficiency industry will be there, ready to make money and create jobs doing massive retrofits. Politicians have danced with the fossil fuel devil for the last 60 years, but eventually the music will stop and there will be a reckoning. When political pressure and foreign intervention fail and plain scarcity sets it, the economy will shift and the market will begin to reward conservation. Magic or no magic, when energy prices start to pinch profits and bank accounts, we’ll see a sudden resurgence in the principles behind the green jobs movement.
Finally, we are entering a dark phase for Keynesian economic principles. Just listen to the Republican Presidential debates. But debt and taxes can do good things. Government’s job is to take debt and taxes and use them well; making investments that will pay off. But governments, like individuals, sometimes do stupid things with their credit and their money. The problem with green jobs is not making the investment in efficiency and renewables, but not investing enough and learning from mistakes along the way.
The combination of increased energy prices, decreased consumption through efficiencies and higher standards for buildings, can lead to jobs for people who will make those efficiencies happen. The worst thing we can do now is give up; we must keep advocating for policies that will make these things happen. The basic idea of creating jobs by saving energy will stand the test of time and weather the austerity storm.
