People often assume government policies cause economic changes, when it is actually market dynamics. Not recognizing the difference can be costly.
A current example is the fevered debate over the switch to cleaner energy in the face of climate change. Opponents of shifting to clean energy fear it will threaten our way of life. They claim it will require a “command” economy, where the government overrules the free market. Data compiled by the national Business Council for Sustainable Energy and Bloomberg NEF reveals something different is happening. Renewable energy has grown to roughly equal the electricity output of the nuclear fleet nationwide.
The deployment of energy efficiency technologies has also had a major impact — since 2008 our national GDP has grown by 15.3 percent, while our use of electricity has actually dropped 1.7 percent, despite the increasingly electricity-dependent nature of our economy. As a result, industrial power prices in the U.S. are among the lowest in the world, helping draw jobs back to our country.
What is the direct impact on U.S. jobs?
Solar electricity alone provides more than double the number of jobs (374,000) as the combined electric generation jobs from coal, natural gas and oil (151,000). Energy efficiency companies employ three times as many workers as the mining industry. In fact, solar photovoltaic installers and wind turbine service technicians are among the fastest-growing jobs in the U.S. economy. And most of these jobs cannot be outsourced to another country.
The U.S. government supports all energy forms, though they are not treated equally. The financial support for renewables (such as tax credits) has been inconsistent and unreliable at the congressional level.
On the regulatory front, efforts like the Clean Power Plan, which makes the treatment of emissions from old and new power plants fairer, have been tied up in the courts by opponents. Yet despite these obstacles, the transition to cleaner fuels continues. Many corporations are committing to clean energy sources, and current trends indicate the global market for clean energy technologies will be in the trillions of dollars within a decade. We should be leaders in that market.
With the Diablo Canyon nuclear power plant slated for closure, we must make the transition to a new energy economy now. Replacing Diablo will require a great deal of private sector energy development — from wind and solar farms at the generation end, to distributed solar and particularly a substantial increase in energy efficiency throughout the region. And that means a lot of skilled people to build and maintain them.
We should help prepare for these jobs. Many businesses are attracted to a diverse and dispersed mix of technologies that can thrive in the flexible market of the future. We will be building such a flexible system. As clean energy markets grow nationwide, their impact on price and reliability can also help non-energy businesses. For example, buildings account for 40 percent of energy use in the U.S., and if we just updated to the model international building code we would save U.S. consumers $30 billion by 2030.
So we should continue looking at how local government actions like permitting, codes and standards can encourage money-saving clean energy outcomes that in turn can boost our region’s appeal.
We have a head start — we know the local energy system is changing, so we can prepare. For years, California has been a leader in the clean energy economy, and San Luis Obispo is one of the top 10 counties in the state for solar jobs. We need to build on our strengths, not fight them.
Oh, and by the way, supporting this approach would also help save the planet.
While politicians argue about whether we can afford to honor our international commitments, the markets are helping us meet them. Under the Paris Treaty, while our current government sits on the sidelines, our energy sector has already taken us halfway to the U.S. pledge.
Similarly, opponents fought the Clean Power Plan for electric generation emissions by claiming the goal was totally unrealistic. Meanwhile, the private sector on its own has quietly taken us 75 percent of the way to our goals under that plan already — goals that were meant to be met by 2030.
Climate change is an existential threat we have to confront. Fortunately, investing in the clean energy path to deal with it is not a threat, but an opportunity.
George Williams is chairman emeritus of the Business Council for Sustainable Energy and spent over a decade directing federal government affairs for Sempra Energy. He lives in San Luis Obispo County. A version of this post was originally published in the San Luis Obispo Tribune Commentary on March 24, 2019.