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Brookings Report Finds "Clean Manufacturing" Critical Component of Green Economy

Cai Steger

Posted July 25, 2011 in Moving Beyond Oil

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This is a guest post from 2011 NRDC MAP Fellow Lauren Kubiak

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On July 13, the Brookings Institution, in collaboration with Batelle’s Technology Partnership Practice, released its highly anticipated green jobs evaluation. The report, “Sizing the Clean Economy: A National and Regional Jobs Assessment,” is, per Brookings, the first comprehensive national clean economy study that defines and identifies “clean jobs” across the entire U.S. economy. In addition to quantifying clean jobs trends in the U.S., it also provides a detailed breakout of state and local clean economies. While much of the discussion during the report release event centered around policy solutions that support innovation and economic development in the clean economy —and rightly so—I was drawn to the study’s conclusions on “clean manufacturing”.

The study found that clean manufacturing, or the production of goods with an environmental benefit, plays a critical role in the U.S. green economy. Clean manufacturing is currently responsible for 26 percent of all clean energy jobs—a share substantially greater than the 9 percent of manufacturing jobs that comprise the whole of U.S. economy. Because manufacturing jobs require more specialized skills and pay higher salaries than the average U.S. job, the manufacturing-intensive clean economy contributes to the report’s finding that clean economy workers earn 13 percent higher salaries than members of the U.S. economy as a whole. Indeed, while the average U.S. employee earns a median wage of $33,190, those in the clean economy earn $44,000.

But the benefits of the clean manufacturing economy don’t stop with high salaries. Clean manufacturing is becoming a growth engine for the U.S. manufacturing industry as a whole; between 2003 and 2010, clean manufacturing created 35,382 jobs, while the rest of the manufacturing industry shed 3.3 million jobs. What’s more, each new clean manufacturing job has an export value of $20,129—a number almost double the traditional manufacturing export value of $10,390 per job. This means that the average clean manufacturing worker is twice as economically productive and boosting the U.S.’s global economic competitiveness.

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(Source: Brookings Website, Sizing the Clean Economy Indicator Map)

So where are these jobs and how do we make more of them? Brookings found that job growth has occurred most quickly in what the Institution calls clusters, or “geographic concentrations of interconnected firms often accompanied by supporting or coordinating organizations.” Current examples experiencing economic growth from clustering include the Silicon Valley, a hub for regional technology innovation, and Los Angeles, an energy and agricultural center. Clean economy establishments in close proximity to their peers between 2003 and 2010 grew 5.5 percent more quickly than those not in a geographical cluster. Given that such a high portion of clean jobs are manufacturing jobs, it makes sense for these manufacturers to cluster themselves among similar industries, as well as the organizations that support those industries.

Communities throughout the U.S. are doing just that. Speaking on a panel at the report release event was Rebecca Bagley, President and CEO of NorTech, an energy and economic development group in Northeast Ohio. Using the principles of clustering, NorTech works to help solar and other advanced energy industries grow—and there are signs that their work is paying off. Cleveland, which has a rate of establishment clustering nearly double Ohio’s state average, experienced job growth between 2003 and 2010 at a rate of 4.4 percent—a number almost double that of Ohio. On the opposite side of the state in Toledo, an even greater share of clustered establishments are likely contributing to its 8.1 percent clean job growth and Ohio’s current position as the number 2 exporter of solar panels

With its recent growth, it’s easy to become overly optimistic about the future of the manufacturing economy. However, there are still many challenges that need addressing, beginning with the uncertain policy environment. Clean energy represents a rapidly growing segment of the green economy, but critical federal energy tax incentives are set to expire by the end of 2012. This makes investment in factories and businesses, even in regional clusters, a risky endeavor. Jeff Metts, President of Astraeus—a small wind turbine hub manufacturing company based in Michigan—voiced frustrations with the unstable financial climate and the challenge to make his voice heard politically. With 200 employees and a potentially innovative new turbine hub design, Astraeus stands to gain—and in turn contribute, in the form of jobs, technology, and turbines—much from continued federal investment in clean energy. While companies like Astraeus have thus far been successful based on smart innovation, Michigan’s skilled workforce, and supportive policies, their future is not guaranteed. What is guaranteed, however, is that clean manufacturing has the potential to be a pillar of the U.S. economy, while addressing significant economic, social, and environmental problems. We should do all in our power to make that happen.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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