Brookings' Rothwell discusses state of green jobs sector

What role is the green jobs sector playing in the United States' economic recovery? During today's OnPoint, Jonathan Rothwell, senior research analyst at the Brookings Institution's Metropolitan Policy Program, discusses a new report on the clean energy economy.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jonathan Rothwell, senior research analyst at the Brooking Institution's Metropolitan Policy Program. Jonathan, thanks for being here.

Jonathan Rothwell: My pleasure.

Monica Trauzzi: Jonathan, Brookings has released a report assessing the state of the green job sector and taking a look at the policies that could maximize its potential. The idea of green jobs has really taken a hit lately though. Many say it's an empty promise that hasn't really delivered. How significant is the role of green jobs in the green jobs sector as the U.S. economy recovers?

Jonathan Rothwell: Well, we found overall that it's a still modest, but significant part of the U.S. economy. It already represents 2.7 million jobs. That's about 2 percent of all jobs. And to put that number in comparison, it's a bit higher than the biosciences sector, another crosscutting sector that gets a lot of attention. It's about just over half the size of the information technology sector and it turns out it's a little bit larger than a comparison with the fossil fuel sector, that likewise includes direct jobs.

Monica Trauzzi: Was the idea of green jobs oversold by the administration or does it have some very strong potential?

Jonathan Rothwell: Well, it certainly has a lot of potential. If you look at just the emerging technologies, a lot of folks call them clean tech. In our report we break out clean tech from all the goods and services that have an environmental benefit and it's clear that they're growing and extremely rapidly. It turns out that the growth there is about twice as fast as job growth in the national economy and with venture capital trends being very strong in favor of clean tech, there is reason to believe that that growth will continue.

Monica Trauzzi: So, are these jobs more expensive to get online? Are more investments needed to get them online and, if so, how viable are they considering our current economic state?

Jonathan Rothwell: Well, there are some policies that could really help these industries scale up that wouldn't actually have a major impact on the budget. For example, the Department of Energy has a loan guarantees program that does not incur a great deal of costs currently and fees can be charged and companies that receive the support can pay back some of the cost. There are some reforms that could be made for the loan guarantees program so it's more effective, but we also think there are other more ambitious policies that could be done. For example, providing product warranty insurance for the first few years of a product's lifetime to reduce the risks that large lenders see with these new technologies and really allow project finance for large-scale installation and manufacturing establishments to increase.

Monica Trauzzi: So, the report focuses on clean energy, green jobs, but is there an knowledge meant by yourself and the other report authors that other sectors really need to be expanded as well, including in the fossil fuels industry, to get the economy back on track?

Jonathan Rothwell: Well, you know, certainly growth needs to come from a variety of sources here. With just 2 percent of all jobs and 2.7 total jobs it's not going to replace the 7 million jobs that were lost during the course of the recession. You know, we'd like to see, at Brookings, more job growth in industries like manufacturing, where the wages tend to be higher and where the export opportunities are stronger. But really, you know, we need job growth across the board.

Monica Trauzzi: And we recently discussed on the show a report that API and NOIA put out that said that we could see major jumps in jobs numbers if offshore drilling permits were restored to historic levels. What's your take on that, expanding the fossil fuel sector to about that level?

Jonathan Rothwell: Well, it'd be great if there were more employees in the fossil fuel sector. Currently there are about 2.4 million jobs right now according to our estimates. In terms of, you know, whether that policy change is the right one, it's not something that we looked out for this report. I can't say I have any expertise on the leasing issue in particular. All these sectors are important parts of the economy. To us, the key distinguishing feature between the clean economy and the fossil fuel sector is that the first produces public goods that benefit everyone in the form of cleaner air and water and conservation of land, etc. Whereas, fossil fuels jobs, obviously, contribute to some of our environmental problems and, you know, so there are some regulatory challenges there. There's a sense that the externalities, environmental damage created by jobs in the fossil fuel sector should be taxed.

Monica Trauzzi: So, according to the report, where does the United States stand in terms of international competitiveness when it comes to green jobs?

Jonathan Rothwell: Well, we do extremely well at creating the ideas that lead to breakthrough technologies and we attract a disproportionate amount of venture capital at the early stage. When it comes to putting ideas into practice at a large scale that really have a jobs impact, we're falling behind countries like China and Germany that have just been killing us lately on project finance and that means that when we, you know, consume more solar and wind energy, in many cases, we have to rely on imports from other countries. So, there are two steps to, you know, mitigating that problem. One is to innovate more here, drive down costs and compete with them. But another is to solve some of these financial challenges that I was talking about that would allow great inventors to scale up their technologies and get the lending they need to do that.

Monica Trauzzi: During the report rollout you said that many consumers are increasingly willing to pay a premium for clean products, organic food, green buildings, electric cars. Is that all still true considering the state of the economy and the fact that many people are out of jobs right now?

Jonathan Rothwell: Well, certainly for some consumers it's going to matter much more than others. What we do find, or we didn't find it, it was just a study in the American, or a leading journal in economic research found that LEED certified buildings command higher rents than similar buildings controlling for all other factors. So, there it's, you know, there's just a premium that exists because the value of the product is higher and the same could be said for energy-efficient washers and for some of the services that are provided that, you know, consumers recognize that over a longer term these will pay off and if they're willing to put some initial money into it today, they'll save money.

Monica Trauzzi: Jonathan, thank you, thanks for coming on the show.

Jonathan Rothwell: Thank you.

Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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