Capturing the Green Jobs Opportunity Joel Rogers UW-Madison, COWS, CSI, MIP, GLSC, Apollo, G4A

EARN, Las Vegas, December 9, 2008

What I’ll talk about

1. What are green jobs? How do we improve them in state policy?

2. How dirty and inefficient our current energy generation and use is, and why efficiency’s progressive 3. An easy place to start

Skepticism welcome

Blinding self-concern not

I made some slides for you

Like this slide.

And this one.

I wonder about PowerPoint.

Power corrupts.

Absolute power corrupts absolutely.

Absolute PowerPoint just can’t be good.

The end of the Anthropocene?

• • • • • • 8M BC-1780, CO 2 in atmosphere was steady (give or take 10 parts per million) at ~ 280ppm Increased 35ppm over next 150 yrs (1930s), 15ppm over next 40 yrs (1970s), 20ppm over next 20 (199 ~ 0s), 20ppm over next ten (2005) CO 2 is 385 ppm today (2008) At present rates of growth, it should reach 500 ppm before mid century Last time that happened was the Eocene period, 50 million years ago, when sea levels were 300 feet higher than today Global warming already associated with massive ice cap melting, extreme weather, crop collapse, population migration

The last 160,000 years and

–10

the next 100 years 160 120 80 CO 2 in 2100 (w/BAU) CO 2 in 2050 (with business as usual) Temperature difference from now ° C

10 0

CO 2 concentration (ppmv) CO 2 now

Time (thousands of years)

40

700 600 500 400 300 200

Now

100

Green jobs: what’s real and what’s not and how to improve

What are “green jobs”?

1. “Green” is work devoted to climate mitigation or adaptation or, more broadly, to improving productive use of natural capital 2. “Green jobs” (GJs) are either actual jobs devoted to these tasks either wholly (close to zero) or partly (soon, virtually all) or FTEs devoted wholly to them 3. Even on an FTE basis, most GJs look a lot like current jobs. The difference lies less in their technologies, materials, or skills than in what those are used for.

4. This said, there are clusters of characteristic, or expected, green job activity that will require some reordering and reframing of skills transfer

Source: Bezdek (MISI)/ASES GJ estimates in energy Today Projected in 2030

Source: PERI & CAP GJ jobs in misc related sectors

U.S.

Wind Solar Geothermal Biomass Total:

RE jobs per Project Investment

Total New MW 124,900 Number of Firms 16,480

23,150 15,190 10,272 3,926 21,760

185,000

12,020

42,698 Investment (Millions) $62,338

$69,624 $15,330 $13,248

$160,540 New FTE Jobs 398,470

298,194 72,324 81,615

850,603 Source: REPP

Location California Texas New York Illinois Ohio Pennsylvania Indiana Wisconsin Michigan North Carolina South Carolina Massachusetts Source: REPP

Potential RE MFG by state

Firms (total) Wind (millions) Solar (millions) Geothermal (millions) Biomass (millions) 5,409 $5,449.50

$12,115.90

$2,181.10

$1,165.30

3,358 1,925 2,289 2,465 2,188 1,321 1,331 2,050 1,096 488 1,193 $3,977.70

$3,297.10

$4,406.50

$4,431.90

$3,061.10

$3,779.30

$3,729.20

$3,452.50

$1,785.00

$2,253.00

$1,235.40

$7,237.80

$3,451.60

$3,231.50

$2,201.60

$3,428.20

$1,342.20

$991.50

$1,255.60

$2,242.80

$839.20

$2,687.20

$906.90

$2,005.20

$592.40

$1,023.00

$738.80

$610.10

$357.20

$271.50

$647.80

$1,512.90

$286.90

$1,093.70

$1,178.40

$613.60

$744.00

$689.80

$531.40

$451.30

$348.80

$588.20

$559.40

$214.00

Total (millions) $20,911.80

$13,216.10

$9,932.30

$8,844.00

$8,400.50

$7,917.90

$6,263.00

$5,529.20

$5,328.40

$5,263.80

$5,164.50

$4,423.50

A modest estimate on RE

Source: Kammen, Kapadia, and Fripp, 2006

Occupation

Wind Production jobs

Training Team assemblers* Laborers and freight, stock, and material movers, hand* Computer-controlled machine tool operators, metal and plastic Cutting, punching, and press machine setters, operators, and tenders, metal and plastic Drilling and boring machine tool setters, operators, and tenders, metal and plastic Customer service representatives* Welders, cutters, solderers, and brazers* Production, planning, and expediting clerks* Machinists* Maintenance and repair workers, general Source: COWS Moderate-term on-the-job training Short-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Postsecondary vocational award Moderate-term on-the-job training Long-term on-the-job training Moderate-term on-the-job training 25H 10.41 10.45 11.88 12.16 12.86 13.70 14.24 14.50 14.74 16.03 25A 21,650 21,740 24,710 25,290 26,740 28,490 29,620 30,150 30,650 33,350 MH 12.81 MA 26,640 12.95 26,940 15.54 32,320 14.34 29,830 17.45 36,290 16.81 34,970 17.35 36,080 19.41 40,370 17.72 36,870 19.39 40,330

Energy Efficiency Jobs

Occupation Construction laborers* Sheet metal workers* Insulation workers, floor, ceiling, and wall* Cement masons and concrete finishers* Heating, air conditioning, and refrigeration mechanics and installers* Hazardous materials removal workers* Carpenters* Plumbers, pipefitters, and steamfitters* Electricians* Boilermakers* Training Moderate-term on-the-job training Long-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Long-term on-the-job training Moderate-term on-the-job training Long-term on-the-job training Long-term on-the-job training Long-term on-the-job training Long-term on-the-job training 25H 10.24 10.48 11.37 12.66 12.75 12.88 13.58 13.84 14.76 19.09 25A 21,310 21,800 23,660 26,340 26,530 26,780 28,250 28,780 30,700 39,710 MH 12.82 13.57 18.45 16.24 15.32 16.52 17.39 18.38 18.10 24.42 Source: COWS MA 26,670 28,230 38,370 33,780 31,860 34,370 36,180 38,240 37,650 50,800

BioFuels Production Jobs

Occupation Laborers and freight, stock, and material movers, hand* Mixing and blending machine setters, operators, and tenders* Shipping, receiving, and traffic clerks* Separating, filtering, clarifying, precipitating, and still machine setters, operators, and tenders* Truck drivers, heavy and tractor-trailer* Chemical equipment operators and tenders Chemical technicians* Chemical plant and system operators Electrical and electronics repairers, commercial and industrial equipment* Sales representatives, wholesale and manufacturing, technical and scientific products* Training Short-term on-the-job training Moderate-term on-the-job training Short-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Moderate-term on-the-job training Associate's degree Long-term on-the-job training Postsecondary vocational training Work Experience in related occupation Source: COWS/BLS 25H 9.94 11.80 12.56 14.17 15.34 16.08 17.70 20.25 22.38 24.24 25A 20,670 24,550 26,120 29,480 31,910 33,440 36,810 42,120 46,540 50,410 MH 13.01 15.00 15.66 18.43 19.10 20.74 21.89 24.72 26.02 33.97 MA 27,070 31,190 32,570 38,330 39,730 43,150 45,530 51,410 54,110 70,660

How to capture the GJ opportunity

1. Map your economy, identify competitive advantage or local demand, maintain real-time data on demand, wages, skills needs, etc. 2. Make public training responsive to but not bullied by existing employer demand; upgrade that demand using any tools you have, including regulation, subsidies, standards, etc.

3. Require local benefit, credentialing and transferability and recognition of skills, career ladders 4. Build an industry, not just project demand

A career ladder

How dirty and wasteful we are, and why improving that will help the poor

Dirty generation

Measure for measure

• • • • • • A quad is a quadrillion BTUs 1.0 Btu = 252 calories 1Btu/hour = 0.293 W 3.413 Btu/hr = 1.0 watt 1 Quad/hour = 293,000,000,000,000 W = 293,000 gW or 293 million mW 1 Quad = 170 million barrels of oil equivalent (boe)

U.S. energy flows (1)

US energy flows (2)

Efficiency is the first fuel

Energy Consumption in the United States 1949 - 2005 200 175 150 Avoided Supply = 70 Quads in 2005 $ 1.7 Trillion 125 If E/GDP had dropped 0.4% per 100 $ 1.0 Trillion New Physical Supply = 25 Q 75 Actual (E/GDP drops 2.1% per year) 50 25 70 Quads per year saved or avoided corresponds to 1 Billion cars off the road 0 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 Source: ACEEE

Cheap and getting cheaper

10.

00 9.

0

IGCC w/o CCS Wind @ 29% CF

8.

0 7.

0 6.

0 5.

0 4.

0 3.

0 0

NGCC Pulverized Coal w/o CCS

10 20 30 Price of carbon per ton

Biomass Nuclear Energy Efficiency

40 50 Source: ACEEE

Good financial returns

25% 20% 15% 10% 5% 0% 0%

Energy efficiency

U. S. T-Bills Long-term corporate bonds Small company stocks Common stocks 5% 10% 15% 20% 25%

Risk index (year-to-year volatility)

30% 35% Source: ACEEE

Building energy consumption

• • • About $400B annually About 50 percent savings available on “simple” cost effective basis (i.e., lifetime energy savings from efficiency measures exceed their purchase, installation, and maintenance costs) That’s a lot of money

Benefits of building energy retrofits

• • • • • Income to tenants and owners Climate and public health Extended building life and higher property values Tenant/occupant health and productivity Non-offshorable employment, at about 12.5 person years of employment per $1M invested

Median household consumption

Other 19% Housing 25% Food away from home 6% Food at home 9% Pension and social security 8% Health care 7% Utilities 8% Transportation 18%

“Drive ’til you qualify”

Source: Center for Neighborhood Technology and National Housing Policy Center, 2007

Gains from one less car

Source: ICF International, 2007

Comprehensive urban building retrofits as a project

Building contribution to CO2 emissions

U.S. sources of CO

Building contribution to CO2 emissions 2

Transportation 32% Industry 25% Residential 21%

Buildings 43%

Commercial 17% Industrial 5%

Source: Pew Center on Global Climate Change

Rebuilding America?

131.4 billion new square feet 213.4 billion new square feet of built space 82.0 billion new square feet from replacement 295.6 billion square feet in 2000 Source: Nelson, “Toward a new Metropolis” 427.3 billion square feet in 2030

100 US Metros

Why cities are great

• • • • • • • • • • Big population with associated buying power Strategic location and regional linkages Population and firm density, with agglomeration effects, complementary skill sets, associated innovation Infrastructure (ports, airports, other transportation networks) Higher wages/productivity Lower waste Centers for research, education, health care, “knowledge” economy, finance, business services, hospitality, etc.

More diverse, tolerant, attractive to youth and immigrants More progressive in politics More easily organized

The riddle of unclaimed value

Benefits of building energy retrofits

• • • • • Income to tenants and owners Climate and public health Extended building life and higher property values Tenant/occupant health and productivity Non-offshorable employment, at about 12.5 person years of employment per $1M invested

• • • • • • • •

RRIDDLLS

Regulatory surround is bad (efficiency not encouraged) Risk aversion among tenants and owners, especially given uncertain duration of tenancy/ownership Information problems on everything (benefits, cost, reliable service) Disaggregated savings Disruption Lack of capital Lack of interest Split incentives (tenants vs. owners, developers vs. owners)

An offer they can’t refuse?

E2 will buy and install cost-effective energy-efficiency measures in your home or business with no up-front payment from you and no new debt obligation. The cost of this service included, your net energy bill should drop immediately and always be lower than it would have been without E2 participation. Your service obligation ends when you quit this property and is suspended during any period of measure malfunction, which we will repair at no cost to you.

Solving the riddle

Sample utility bill

Your expected (pre-E2-participation) energy bill Your energy consumption this month E2 service charge You owe $170 $135 $ 25 $160

Future utility bill



Your expected (pre-E2-participation) energy bill This month’s energy consumption

Demand response savings credit Negawatts credit for forward capacity Climate exchange credit Energy sold back to grid

Your net energy bill this month E2 service charge You owe $170 $135

($ 30) ($ 30) ($ 30) ($ 30)

$ 15 $ 25 $ 40

High leverage

Energy costs for 2,252,800 Wisconsin households

Total cost of residential energy (gas, electricity, fuel oil, propane) consumption Average monthly cost per household $4,572,463,104 $169.14

Available capital under Me2-styled program

Average available capital per household if amortized over 10 yrs at 6% interest and $33.83/month Total available capital (2,252,800 X $3,047) Current direct WI public spending on residential energy efficiency Ratio of available capital under Me2-styled program to current WI public spending

20% savings

$914,492,621 $33.83

$3,047 $6,864,281,600 ~ $70M ~ 100/1