At a time when major US companies are announcing job lay-offs almost daily, the renewable energy industry is hiring new workers every day to build wind farms, install rooftop solar arrays, and build solar thermal and geothermal power plants. The output of industrial firms that manufacture the equipment for these energy facilities is expanding by well over 30% a year. These investments both create jobs and help prevent climate change from spiraling out of control.
Among the several sources of renewable energy, wind looms large. The US has 24,000 mw of wind generating capacity already online, and 83 wind farms with some 8,000 mw of capacity are under construction. Beyond this, a staggering 2,25,000 mw of planned wind farms are waiting for access to transmission lines.
The US has 40 plants manufacturing wind power components. Every billion dollars invested in wind farms creates some 3,350 jobs?nearly four times the 870 jobs created with a similar investment in coal-fired power plants.
With solar cells (photovoltaics), the US growth potential can be seen in the recent expansion from small rooftop installations to commercial generating facilities covering several square miles. In 2007, the US installed roughly 200 mw of solar cell generating capacity, most of it on rooftops. A billion dollars invested in solar cell installations generates as much as 1,480 jobs.
A similar growth situation exists with solar thermal power plants?facilities that use mirrors to concentrate sunlight and generate steam to power turbines. Until recently there was just one of these facilities in the US: the 350-mw SEGS complex in California. Now there are 18 commercial-scale power plants under development with a collective generating capacity of 4,160 mw?nearly a twelvefold increase. This is an example of yet another labour-intensive energy technology (2,270 jobs per billion dollars invested) with a sharply falling cost curve that is fast becoming a major player in the US energy economy.
Next consider geothermal energy. For 20 years, the US had only one commercial-scale geothermal generating facility, in California. Now suddenly, almost overnight, there are some 96 projects?most of them with a generating capacity ranging from 10 to 350 mw?in western states. We are witnessing the emergence of a major new source of electricity.
Two new technologies?plug-in hybrid cars and advanced design wind turbines?have set the stage for building an entirely new automotive fuel economy. While four manufacturers are coming to market with plug-in hybrids in 2010 or 2011, the early estimates of how many they will produce appear to be small. What is needed is a crash programme, which is almost like a World War II?type mobilisation, to produce tens of millions of cars powered largely with electricity, mostly from wind farms, at the gasoline equivalent cost of less than $1 per gallon. The good news is that plug-in hybrids do not need a new infrastructure.
Another job-creating way to save energy is to invest in urban transit, both light rail and buses. When combined with making streets bicycle- and pedestrian-friendly, this also increases mobility and reduces oil imports.
In terms of job creation, investment in retrofitting buildings creates more than seven times as many jobs as a similar investment in coal-fired power plants. One of the early leaders is Houston, which plans to retrofit each of its 271 government buildings, thus simultaneously reducing energy use and operational costs. As Houston Mayor Bill White says, ?It makes good business sense.?
In California, Adobe Systems, a software firm, retrofitted its expansive corporate headquarters at a cost of $1.4 million, dropping its electricity use 35% and its natural gas use 41%. The energy savings paid back the $1.4 million retrofit investment in just 14 months. (More typically, the payback time on retrofitting buildings is closer to five years.) And these jobs cannot be outsourced.
Building the new energy economy creates jobs in the construction of wind farms or the retrofitting of buildings, and also indirectly in the supply lines that provide, for example, the parts for wind turbines or the thermally efficient windows for retrofitting. These investments also generate jobs outside the energy sector. For example, the construction of a wind farm in a Great Plains community generates jobs in local businesses such as restaurants and home improvement outlets.
The government?s role in this vast job creation initiative is to use public funds as incentives to leverage far greater investments of private capital. We estimate that $100 billion of federal funds used strategically over the next 12 years would leverage $400 billion of private capital investment. If this $500 billion is allocated evenly between renewable energy development and retrofitting, and if every two jobs created in the energy sector creates one job elsewhere, this would quickly generate 600,000 new jobs that would last through 2020.
In addition to the short-term need to create jobs, there is the all-encompassing need to avoid runaway climate change and the threat it poses to global civilisation. If the world is to have a decent chance to stave off the threat, then global carbon emissions need to be cut 80% by 2020. For the US, this might require up to $500 billion of federal funds to mobilise $2 trillion of private capital?for a total $2.5-trillion investment in renewables and efficiency by 2020. Investment at this level would create three million new jobs that would last through 2020.
A complementary measure to accelerate carbon reduction would be to incorporate the cost of climate change in fossil fuel prices either through a cap-and-trade system or by restructuring taxes. The latter would mean simply raising the tax on carbon and offsetting it with a reduction in income taxes. Both these measures shift investments from fossil fuels to efficiency and renewables.
Historically, it is rare for so many emerging threats to have a common solution. The measures described here would simultaneously reduce carbon emissions, lower oil imports, and create millions of new jobs. This is a win-win-win opportunity that we cannot pass by.
?Lester R Brown is president of Earth Policy Institute and author of Plan B 3.0: Mobilizing to Save Civilization. Free download at http://www.earthpolicy.org