Chapter 6
Opportunities Knock
The Clean Power Plan will boost the economy by spurring investment in clean energy and efficiency.
“In the 1970s, lobbyists told us that using the Clean Air Act to phase in catalytic converters for new cars and trucks would cause ‘entire industries’ to ‘collapse.’ Instead, the requirement gave birth to a global market for catalytic converters and enthroned American manufacturers at the pinnacle of that market.”
— U.S. Environmental Protection Agency administrator Lisa Jackson in 2010, on the 40th anniversary of the Clean Air Act
Here we go again.
Almost every time the government has moved to protect the public’s health, industry has cried wolf. And that’s exactly what is happening now, in the wake of the U.S. Environmental Protection Agency’s historic Clean Power Plan to cut dangerous carbon pollution from power plants.
“This is our new catalytic-converter moment,” EPA Administrator Gina McCarthy told a Georgetown University conference.
Studies show that the Clean Power Plan will actually create new job opportunities and economic growth by spurring investment in energy efficiency and cleaner energy, including new low-carbon technologies. According to an April 2015 study by University of Maryland economists and the consulting firm Industrial Economics, it’s likely to boost employment by up to 273,000 jobs by 2040.
“Tackling climate change is one of America’s greatest economic opportunities of the 21st century,” said a letter sent to the EPA in support of the plan and signed by more than 200 businesses, including Nike, Starbucks, Levi Strauss, and Kellogg.
Since 1970, investments to comply with the Clean Air Act have provided $4 to $8 in economic benefits for every $1 spent on compliance, says the U.S. Office of Management and Budget.
“We don’t have to choose between a healthy economy and a healthy environment. Those goals are not separate — they’re intertwined,” McCarthy said in a Los Angeles speech in 2014. “We don’t act despite the economy; we act because of it.”
In a letter to members of Congress, Environmental Entrepreneurs (E2) — a nonpartisan group of business leaders who promote clean energy and an NRDC affiliate — wrote, “While the costs of climate change keep rising, so does the value of unleashing American innovation and entrepreneurship to solve this problem.”
Carbon limits will provide the “clear and sustained market signal businesses, entrepreneurs, and investors require to commit significant funds to clean energy projects across the nation,” E2 said.
Tackling climate change is one of America’s greatest economic opportunities of the 21st century.
Many states are already showing they can reduce carbon pollution — and benefit their economies — through increased energy efficiency and greater use of cleaner energy such as solar and wind power.
Since 2011, private industry and the public sector have announced more than 230,000 new clean energy and clean transportation jobs.
North Carolina’s clean energy industry, for example, has experienced an annual growth of about 25 percent since 2012, outpacing the growth of other industries in the state, according to the North Carolina Sustainable Energy Association. Much of the growth can be attributed to the state’s renewable portfolio standard. In a 2014 poll, the majority of North Carolina small business owners said reducing industrial carbon pollution while increasing use of renewable energy would be good for the state’s economy.
Massachusetts’ clean energy sector has recorded double-digit job growth for three consecutive years and a 47 percent growth rate since 2010, according to the “2014 Massachusetts Clean Energy Industry Report” produced by BW Research.
In California — the nation’s leader in clean energy policies — clean energy now employs more 430,000 workers, more than the motion picture or aerospace industries, according to a 2014 survey by the Advanced Energy Economy Institute.
Bloomberg News reported earlier this year that 26 California companies in its Clean Energy Index added employees at a median annual rate of 9.5 percent for the past two years — more than quadruple the 2.3 percent for the 115 U.S.-based companies in the index.
Since 2007, U.S. clean energy investment totaled $386 billion, according to a Bloomberg New Energy Finance report commissioned by the Business Council for Sustainable Energy, a coalition of companies and trade associations from the energy efficiency, natural gas, and renewable energy sectors. In 2014, U.S. clean energy investment jumped 7 percent from 2013 levels.
Estimates project that another $268 billion will be invested in just wind and solar between now and 2026, said the American Council on Renewable Energy (ACORE).
Since 2008, renewable energy has been the fastest-growing source of new U.S. electrical generation, responsible for 37 percent of new capacity. And as a result of the growth, “key renewable electricity technologies experienced dramatic cost reductions as innovation, competition, and certain national and state policies accelerated large-scale renewable energy deployments and continual efficiency increases across the entire supply chain,” ACORE reported.
And renewable energy sources are projected to continue to grow. “Solar is the fastest-growing renewable generation source, but wind accounts for the largest absolute increase in generation,” said the U.S. Energy Information Administration. According to the EPA, “every four minutes, another American home or business goes solar.” And jobs in the solar industry are growing faster than any other sector in the United States.
The Bureau of Labor Statistics projects that employment of solar installers is projected to grow by 24 percent from 2012 to 2022, much faster than the average for all occupations. Jobs in solar manufacturing, sales and distribution, and project development are also projected to grow.
Wind power is on pace to provide 20 percent of the total U.S. electrical supply by 2030. The industry employs more than 80,000 workers in the United States, a number that can double with the “right policies,” according to ACORE.
“We don’t have to choose between a healthy economy and a healthy environment. Those goals are not separate — they’re intertwined.”
Renewable energy technology costs have fallen sharply, closing the cost gap between renewable resources and traditional fossil-fuel resources, according to a November 2014 report on challenges facing the electric utility industry. The report, authored by utility industry and finance experts, was commissioned by Ceres, a nonprofit group that seeks to mobilize business and investor leadership on climate change.
Energy efficiency is another significant way to reduce carbon pollution at low cost, as the Clean Power Plan recognizes. A carbon-cutting plan that relies on energy-efficiency investments could create more than 274,000 efficiency-related jobs by 2020, filled by electricians, roofers, carpenters, insulation workers, and heating/air conditioning installers, among others, an NRDC study found.
Measures such as insulating homes, installing more efficient lighting in buildings, and offering rebates for purchase of more efficient appliances are the cheapest and fastest way to reduce carbon pollution. They also will offer the additional benefits of lowering electric bills and reducing other harmful air pollutants.
Energy efficiency can provide the equivalent of at least 10 percent to 20 percent of total electricity sales within a decade, according to an NRDC report.
Each dollar invested in energy-efficiency measures yields $1.24 to $4 in benefits, according to a study by the American Council for an Energy-Efficient Economy.
Yet, energy efficiency’s potential remains largely untapped. For example, a 2013 study by the United Technologies Corp in collaboration with the Rhodium Group found that a 30 percent improvement in building efficiency by 2030 is possible with existing technology and design practices and would net $65 billion per year in savings for American households, businesses, and governments.
States can go beyond the Clean Power Plan’s projected energy savings targets of 1.5 percent of total annual electricity use. In fact, 15 states have achieved or have standards in place to meet or surpass that level already (Arizona, California, Colorado, Hawaii, Illinois, Iowa, Maine, Massachusetts, Michigan, Minnesota, New York, Ohio, Rhode Island, Vermont, and Washington). NRDC projects that states could produce savings of at least 2 percent of retail sales annually.
Energy efficiency is already paying off in a number of places. Investment by utilities and states of more than $7.6 billion in energy-efficiency programs saved 24,000 gigawatt-hours of electricity alone in 2013, according to a Consortium for Energy Efficiency report. That’s the equivalent to the electricity used to power 2.2 million homes.
ISO New England, which runs the region’s electricity grid, projects that because of anticipated savings from energy efficiency, the region can defer 10 transmission upgrades once considered necessary to ensure reliability.
In the Pacific Northwest, a plan developed by the Northwest Power and Conservation Council finds that cost-effective efficiency can meet 85 percent of new demand over the next 20 years and, combined with more renewable energy, could delay investments in future fossil-fuel power plants.
The American Council for an Energy-Efficiency Economy (ACEEE) found that four energy-efficiency initiatives alone could cut power-sector carbon emissions 26 percent by 2030 relative to 2012 emissions. That would eliminate the need for nearly 500 power plants by 2030, according to the ACEEE report.
“If the EPA is looking for a way to cheaply cut carbon pollution and boost the economy while giving states the freedom to use their energy resources, energy efficiency is the answer,” said ACEEE executive director Steven Nadel.
The clean energy sector offers the potential for significant job opportunities, especially for minority workers in areas such as manufacturing, the construction and building trades, information technology and computer software design, engineering, sales and marketing, and operations and maintenance, according to an April 2015 memo from the House Energy and Commerce Committee Democratic staff. Also, because the military is heavily investing in clean energy and energy efficiency on domestic installations, an increasing number of veterans will enter the civilian workforce with the training that helps them secure good jobs in the growing clean energy industry.
Our support for the Clean Power Plan is firmly grounded in economic reality.
An NRDC analysis projected potential job creation in a number of states from a carbon-cutting plan that relied heavily on energy-efficiency investments. Florida could gain 10,000 efficiency-related jobs; Ohio, 8,600; Illinois, 7,200; Minnesota, 7,500; Michigan, 6,900; North Carolina, 6,700; Virginia, 5,600; Pennsylvania, 5,100; Missouri, 3,900; Arkansas, 2,200; Colorado, 2,700; Iowa, 2,500; and Nevada, 1,200.
The opportunities created by transitioning to a cleaner energy economy — and the dangers to the nation’s economy from failing to confront climate change — explain why the Clean Power Plan has drawn strong support from businesses.
“Our support is firmly grounded in economic reality,” stated a letter signed by more than 200 businesses. “Climate change poses real financial risks and substantial economic opportunities, and we must act now.” The letter was coordinated by the Boston-based sustainability advocacy group Ceres.
More than 300 business leaders also signed a letter of support sent by Environmental Entrepreneurs, whose members have been involved in financing, founding, or developing more than 1,700 companies that have created more than 570,000 clean energy jobs.
“By ensuring American leadership on climate and clean energy policy, the innovations we develop domestically will also be the products and services we export to the expanding international market for clean energy, a multitrillion-dollar opportunity,” they wrote. “U.S. manufacturers can be the leading global suppliers of cleaner cars, cleaner fuels, cleaner power, and technologies that improve industrial, power plant, and building efficiency.”
History shows that we can confront environmental challenges while creating economic opportunities. The EPA’s plan will unleash innovation and clean up the air — just like previous efforts to clean the air and protect the public’s health.
From Clean Power: The Case for Carbon Pollution Limits
Next chapter: The Public Wants Action — Now →
