Green Way: Can Green Save the U.S. Economy?

According to several recent reports, the answer is “yes.”

All eyes are on the economy as the credit crisis shakes the foundation of the American financial system. Interestingly, some see the green movement as the knight in shining armor that will come to the rescue.

A report released last month claims the U.S. can create two million jobs in two years by investing in a massive green economic-recovery program. Though it calls for a $100 billion investment package from the federal government, the study postulates that the unemployment rate would decline to 4.4% in just two years. The latest figures released in August by the Bureau of Labor Statistics place the current unemployment rate at 6.1%.

“Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy” was prepared by the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst, under commission by the Center for American Progress (CAP), a think tank headed by John D. Podesta, former chief of staff to Bill Clinton and professor at the Georgetown University Center of Law.

Another report, “Green-collar Jobs in America’s Cities,” released by the Apollo Alliance, a national coalition of business, environ-
mental, labor and community organizations, and Green for All, an organization that advocates for green economic initiatives, asserts that “the movement to make American cities more sustainable, efficient and livable is perhaps the greatest new engine for urban economic growth, innovation and job creation in many decades.” CAP and the Center on Wisconsin Strategy, a national policy organization that focuses on economic development, also contributed to the study.

Green Buildings
The “Green Recovery” study points to construction and manufacturing as two industries in particular that would experience major job growth by investing in energy-efficient building retrofits.

Among other projects, the plan calls for the funding of tax credits for private businesses to finance commercial building retrofits and invest in renewableenergy systems. It also recommends federal loan guarantees to underwrite private credit for those building retrofits.

The U.S. Green Building Council (USGBC), the organization that certifies green buildings under the Leadership in Energy and Environmental Design (LEED) program, has also commented on the economic potential of going green.

In a Sept. 20 article in the Boston Globe, Rick Fedrizzi, the founding chairman and current CEO and president of USGBC said: “For centuries, we’ve had political revolutions, intellectual revolutions, artistic revolutions, most recently, we had the information-age revolution, and all of these things have brought us, as a society, to where we are today.”

Fedrizzi cites the prediction of the American Solar Energy Society that the U.S. will have 40 million green-collar jobs by 2030. “We are deep in the middle of a green revolution,” he told the Boston Globe. “We really believe, as an organization, that these [jobs] are going to bring cities back to life, that this is going to return economic development and job creation to the U.S., and ultimately, we’re going to revitalize the country as a result.”

The Bottom Line
Material handling is poised to play an important role in the green revolution. Efforts to reduce energy use and go green can result in cost savings and increased competitiveness. Though most environmental experts focus on manufacturing facilities, distribution centers and warehouses can also benefit from green initiatives.

“Making the manufacturing sector more efficient and competitive is vital to the health of the U.S. economy,” according to the Apollo Alliance. “High energy costs force those manufacturers who seek to remain competitive to achieve cost savings by reducing their energy consumption.”

The Apollo Alliance says there are numerous opportunities to improve efficiency, reduce costs and maintain profitability in spite of exploding energy costs. “U.S. manufacturing uses antiquated technology,” the coalition asserts. “One such example is the industry’s wide use of inefficient electric motors to operate everything from conveyor belts to industrial lifts. These motors consume roughly 70% of all industrial electricity and old, inefficient versions can require up to five times their capital cost in energy annually. Simply replacing these inefficient or improperly sized motors can reduce energy usage between 30% and 60%, often generating enough savings for firms to pay off the cost of the new motor in less than three years.”

The report adds that more efficient industrial equipment can also result in productivity gains, which can help offset the cost of retrofits. “The manufacturing sector consumes over 30% of all energy in the U.S., making it a prime candidate for energy management,” says the Apollo Alliance. “Simple measures can greatly improve manufacturing efficiency, thereby insulating the industry from rising energy prices and increasing its competitiveness.”

Nevertheless, enormous barriers threaten the implementation of these strategies. Some speculate that the looming labor shortage will derail green efforts. In the “Green-collar Jobs in America’s Cities” report, the shortage of qualified, skilled production employees in manufacturing, construction and installation is identified as “a leading barrier to renewable energy and energy-efficiency growth.” The shortage is likely to get worse, according to the report, as skilled Baby Boomers retire. “Nearly onequarter of the current workforce will be eligible for retirement in the next five to seven years,” the report says.

Global Outlook
If such challenges can be overcome, the potential of the green revolution could extend far beyond the boundaries of the U.S., according to a landmark report released by the United Nations on Sept. 24.

“Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World,” commissioned and funded by the U.N. Environment Programme (UNEP), predicts that developments in alternative energy will create more than 20 million jobs globally.

Manufacturing, installing, and maintaining solar panels should add 6.3 million jobs by 2030, while wind power is expected to add 2.1 million jobs, according to the UNEP report. Even more jobs could be created in the building, recycling and clean-vehicle manufacturing industries.

The UNEP study forecasts that investments in energy-efficient buildings could lead to an additional 2 million to 3.5 million green jobs in Europe and the U.S. alone.

Whether you agree or disagree with advocates of a green economic rescue, one message is clear: The move to energy-efficient buildings and more productive material-handling systems will likely become one of the most significant trends of our time.

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