Economic Growth via Clean Energy

Advocates of the idea of a “green economy” argue that investing in “green” technologies and processes now will lead to economic growth later. Robert Kennedy, Jr. of the National Resources Defense Council, among others, believes that explicitly pricing carbon, for example, will unleash a wave of innovation to create technologies and products that will require less carbon to produce. Van Jones in The Green Collar Economy sees the growing green economy as an anti-poverty tool.

These are good arguments, but they are primarily backed up by isolated anecdotes. Fortunately, the Pew Trusts have recently released a report (The Clean Energy Economy) that goes a long way towards defining the current impact of the “Clean Energy Economy”. While there is no uniform definition of the term “Clean Energy Economy”, the Pew report is a good place to start. The Pew definition is: “A clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution, and conserving water and other natural resources.’’

Pew cites five areas as being part of the Clean Energy Economy: Clean Energy, Energy Efficiency, Environmentally Friendly Production, Conservation and Pollution Mitigation, and Training and Support. The majority of occupations in the green economy are indeed in the areas of resource conservation, clean energy production, and “green construction”. However, the clean energy economy also includes such positions as: chemists who develop less toxic cleaning solutions, plumbers who help install drip irrigation systems, and product designers who design more environmentally friendly products amongst others. So this economy is broader than popularly acknowledged.

In a parallel fashion, Pew highlights some companies that are at least partially “green”. A more accurate way to phrase this would be companies that have seen increasing sales and/or revenues from servicing a “green”, environmentally aware marketplace. Honeywell has about a $20 billion portfolio of energy efficiency products—and the business including this sector grew at twice the rate of the parent company in 2008. A law firm such as Manko, Gold, Katcher, and Fox seems like an unlikely profile entry in a report about the clean energy economy—until one understands that this law firm focuses on environmental law and is heavily involved in the City of Philadelphia’s sustainability task force.

As for some numbers, Pew estimates that over 750,000 jobs and 68,000 businesses are part of the green economy. Further, .49 percent of all jobs nationwide are “green” according to Pew. Interestingly, 22 states have a greater percentage of their jobs in the green economy than this national average. Pennsylvania, for example, has .62 percent of its jobs in this sector—in the face of an overall decline in total jobs over the past 10 years. In fact, Pennsylvania is in the top ten in terms of percentage of its workforce involved in the clean green economy. The state with the highest percentage of its jobs in the green sector is Oregon with 1.02 percent.

Admittedly, these are not huge numbers. However, simply by publishing The Clean Energy Economy, Pew has done a great service. It provides quantifiable evidence that there is enough economic activity in the clean energy area to be worthy of counting and notice. It also shows that many different occupations can benefit from growth in the clean energy sector—beyond the obvious candidates of clean energy production, resource management, and construction. The most important lesson is that there can be a link between going green and economic growth. Many critics of green policies focus on the cost of environmentally friendly policies and business practices. They rarely discuss the economic benefits of going green. Its turns out there are quite a few.

The Pew report is here:


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