Laurie Johnson's Blog: Green Enterprise

Comprehensive Climate and Energy Legislation: More Jobs, Not Less

2010-04-23T20:29:41Z

On Monday, April 26th, Senators Kerry, Graham and Lieberman (KGL) are expected to release their proposed climate legislation. If properly crafted, climate legislation will reduce dangerous global warming pollution, increase national security by reducing oil consumption, help kick start America’s growth engine of the 21st century—clean energy, and keep America at the forefront of clean energy innovation. No doubt, a key factor in the debate will be jobs, so let’s settle up the score from the get-go: we have every reason to expect that climate change legislation will produce a net increase in jobs.

Here’s why:

Since the nation first enacted comprehensive environmental protection, beginning four decades ago, hundreds of pollutants have been regulated. At the same time, tens of thousands of jobs were created every year in the environmental protection industry, and only a handful lost due to regulation—roughly one to three thousand per year, less than the number of weather-related job losses. Several factors explain these outcomes. First, the economy grew. This is good news, since this is exactly what all of the economic models project with or without climate legislation, regardless of whether the model is estimated by groups opposed to climate legislation or by non-partisan government and academic institutions. Second, the environmental protection industry is more labor-intensive than the economy as a whole: on average, a dollar spent on environmental protection employs more workers than does a dollar spent elsewhere in the economy. Third, job losses from environmental regulation constitute a statistically imperceptible number of workers relative to the size of the economy as a whole (though not, of course, to the people who lose them).

The most significant job growth will be in renewable energy and energy efficiency, with estimates in the range of 900,000 to 1.9 million jobs by 2020. Climate legislation could also increase jobs in the automobile sector, putting America back on the map as a leader in the global auto industry. A recent study sponsored by NRDC, the United Auto Workers, and the Center for American Progress shows that with the right incentives to manufacture clean car components in the United States, attaining a fuel economy of 40 mpg by 2020 would create 50,000 to 150,000 new domestic auto sector jobs. Finally, and perhaps most surprising, climate legislation could even drive job creation in the U.S. oil industry from enhanced oil recovery (EOR), a technology that uses CO2 to extract more oil from aging fields. An abundance of existing and abandoned oil fields are available for CO2-EOR, which would not only provide a place to sequester CO2, but also reduce pressure to open up new areas for oil exploration. The result is that by 2020, over 40,000 jobs could be created from CO2-EOR, rising to approximately 350,000 by 2030.

Click here for more details on how climate legislation will bring steady growth in jobs and innovation as we transition to a clean energy economy.

EPA Analysis: Jobs and Household Incomes Increase Under Climate Policy

2009-04-22T07:03:40Z

Today EPA released an analysis of what the economy might look like if the proposed Waxman Markey bill were enacted. This legislation would finally put a cap on dangerous global warming pollution, driving investments that will create millions of clean energy jobs, reduce our dangerous dependence on oil, and help protect the planet. The results provide good news on many issues (and are consistent with many previous studies). For now let's focus on overall income.

EPA finds that under the Waxman-Markey proposal,

Households will become 18-19% richer between 2010 and 2020, and by 36-40% by 2030. Translating these numbers into a more familiar unit, this means median household incomes would be approximately $9,000 higher in 2020 from today's levels, and over $18,000 more in 2030.
By 2050, median household income would be over $45,000 higher than it is currently.
Renewable energy penetration will increase more than 150% over the next two decades, and this is before modeling the bill's renewable electricity standard (given time constraints, EPA could not model this provision yet). Since renewables create almost 3 times as many jobs as fossil energy, we'll have more jobs.
GDP would grow 30% by 2020, 70% by 2030, and over 200% by 2050, also translating into more jobs.

In contrast to these impressive gains,

Over the entire life of the bill, from 2010 to 2050, EPA estimates that the average household will need to invest only $98-$140 per year, a little over a dime a day per person.

Obstructionists will undoubtedly continue to claim that climate legislation is too costly, but the EPA study provides an essential perspective for anyone who wants to evaluate these claims objectively. Even if investing in climate protection carries a small price tag, the cost will be much lower than the opposition says, and it will be more than offset by the economic gains presented by the EPA's analysis. And let us not forget: the cost of doing nothing would be far higher. We can tackle global warming, move to clean energy, and grow the economy at the same time.

Newt's Voodoo Economics

2009-03-14T18:55:45Z

Newt Gingrich's assertion that climate legislation will result in a $1,300 tax per household is voodoo economics--designed to scare us into believing climate protection is "just too expensive."

In Newt's nightmare tax math, the economic value of the carbon market just disappears! He assumes the money doesn't get returned to taxpayers; it doesn't get spent on any worthwhile investments in cleaner, smarter energy resources; it doesn't get invested in ways to reduce the energy we waste today, saving us money; it doesn't get used to help communities adapt to a changing climate; it doesn't get used to address regional differences in the cost of cutting global warming pollution. No, in Newt's scary world, the money just vanishes, leaving us only with the bills. Fortunately, in the real world the dollars created by the carbon market will go to all of these purposes, providing us with a safer climate, reduced dependence on oil imports, and creating new jobs to build our economic recovery.

It's not that there isn't any cost to climate protection; it's that the cost is far smaller than the size of the carbon market, from which the $1,300 estimate is derived. The cost to physically achieve the emission reductions (i.e. the compliance costs), are roughly 10% of total carbon market value by one estimate (Dallas Burtraw, testimony before the Ways and Means Committee, March 12, 2009). The remaining 90% is just shifting money away from polluting activities toward cleaner goods and more secure sources of energy.

So, even if Newt were right that the total carbon market size worked out to $1300 per household, the actual cost of cutting that pollution would be more like $130 per household per year (minus any savings we earn from increased energy efficiency), or $2.50 a week .

And for that $2.50 (or less) per week we'd be getting a bargain that is hard to beat.

Just four categories of climate damages alone (hurricanes, higher energy bills, property lost to sea level rise, water supply impacts) are predicted to cost the average household $2,000 a year by 2025, $3,000 in 2050, rising rapidly to over $11,000 by the end of the century. And these estimates ignore (because they are too hard to count accurately), the added costs of droughts, floods, wildfires, agricultural damages, and the value of lost lives. We may not be able to eliminate all of these costs by acting now to cut pollution but we sure can help reduce them dramatically.

So think twice before you rely on Newt for financial advice.

Dave Hawkins and Peter Miller contributed to this post.