The quest for green jobs in our region, state, and country seems so close, but yet so far. Perhaps the reason these jobs are so elusive is because we are looking for them in the wrong places. The term “green jobs” has been a buzz word for three some-odd years that is essentially a catch-all for any job that is directly or indirectly linked with saving energy, for the most part. It has been explained to us as a set of careers that will not only power our economy in the 21st century, but be good for the planet to boot.
While this may well be true, we really to look at the “green economy” from a broader perspective. The green economy is not really a new sector unto itself, it’s more of a transformation of certain critical sectors of our current economy to meet larger sustainability goals. These sectors are: energy, construction and building trades, water management, waste reduction, food production, and transportation.
Each of these sectors must undergo a slightly different transformation based on three key factors, the three legs of the stool if you will: availability of skilled workforce, changes in policy and regulation, and a shift in consumer preferences and demand. Thus far, the green jobs discussion has focused almost exclusively on workforce development. This approach of pushing new skills out into the workforce is unprecedented. This was certainly not the approach in either the Industrial Revolution of a century ago or the Digital Revolution of twenty years, and that’s because of two reasons. First, the demand for products and services itself created the demand for jobs, and the necessary skills were taught either by employers or by entrepreneurial agents in the private sector (think third-party training workshops for the plethora of programming and networking certifications). Second, it didn’t make sense to train people when you aren’t sure exactly what skills they will need. We could have dumped tons of resources into training people on programming in the AIX operating system (never heard of it? There’s a reason for that) because we thought it was the next big thing, when in fact .NET and Linux programming would emerge as the skills in demand.
The same is true today with the green economy; it still doesn’t make sense to take this preemptive workforce development approach. With all due respect to the organizations working on green job training, we don’t know and can’t know exactly what our transformed economy will look like, so why would we build up a skilled workforce that may end up being irrelevant? Are solar and wind production Pennsylvania’s wave of the future? Maybe, maybe not; we certainly won’t be the ones to dictate that, it will be the new and existing businesses that will determine our economic future. Furthermore, the battle cry for green jobs has enticed people into these training programs, but has created a glut of workers in the marketplace that, for the most part, isn’t hiring yet. This glut can have the opposite effect of bringing down the wages of some of these positions without making new positions, not exactly the intended effect.
A new trajectory
We need to focus our efforts on demand-driven job creation (aka the “pull” model) instead of the supply-driven approach (aka “push” mode) we are pursuing now. Despite all of the positive impacts and stabilizing force ARRA provided, in the end it was still a push approach, as it didn’t fundamentally change any of the market conditions that have set the tone for our economy. If we’re really truly committed to transforming our economy, we need to take a hard look at long-held policies that hold down the cost of energy, encourage wastefulness, and stifle innovation. We’re trying to have our cake and eat it too. Renewable energy is a prime example: for wind and solar to be cost-effective and demanded in the marketplace, we must allow the price of coal-powered electricity to rise, while also providing incentive for new installations by way of the state’s renewable portfolio standard (RPS). As it stands, Pennsylvania’s RPS, a mandate that requires utility companies to provide a certain percent of their total energy delivered from renewable sources, is a good first step but is lacking in many ways. The requirement for solar photovoltaics is currently a measly 0.02% and will max out at 0.5% in 2021, and utilities may purchase that solar energy generating anywhere within thirteen mid-Atlantic and midwestern states and the District of Columbia. This does very little to create jobs or even stimulate construction of new renewable sources. By contrast, New Jersey has taken a very proactive approach, where their RPS is currently over 0.3% on its way to a peak of nearly 5% by 2026, ALL of which must be purchased from within the state.
How does this manifest itself in the market, you might ask? Well, the price for Solar Renewable Energy Credits (SRECs), the means by which renewable energy commodities are traded, are just above $200 for one megawatt-hour (MWh) in Pennsylvania, while they are trading at over $600/MWh in New Jersey. On a practical level, this means that if I were to install a solar electricity array on my roof and Pennsylvania adopted New Jersey’s level of incentive, the payback period on my investment would be cut approximately in half, from 9.3 years to 4.7 years. This larger incentive would be the difference in executing this installation for myself and many others, which in turn means…JOBS! Perhaps our elected officials are starting to hear this. There is currently a bill up in the Legislature to modify the RPS to increase the demand for Pennsylvania solar. This is a step in the right direction, as bill sponsor Chris Ross (R-Chester) has explained that we’re oversaturated with supply.
So, let’s keep the discussion about green jobs going, but we must really shift our focus to “green businesses.” What are the barriers preventing these businesses and industries from burgeoning? My belief is that they are primarily policy barriers reinforced by the cozy relationship between industry and politics. We will need to have some hard conversations, but it is crucial that we start and keep talking about this dark side of the issue. I can guarantee that some very powerful industries will not be happy about it, but this is the proverbial omelet; and it’s time to crack a few eggs.
