It’s not hard, particularly during election season, to hear people touting the creation of “green American jobs.” The phrase uses all the buzzwords and invokes all the concepts everyone likes: namely, “green,” “job creation” and “American manufacturing.” What’s not to feel good about?
The truth of the matter is, it’s getting hard not to wonder if the phrase isn’t mostly a campaign slogan a and little else. Sure, there have been some bright spots in the U.S., and hopefully there will continue to be. But green jobs are fleeing offshore faster than anyone can count. The last manufacturer of solar technologies that operated almost entirely within U.S. borders, Michigan-based Energy Conversion Devices, announced a few weeks ago that it was finally succumbing: the company was forced to cut 140 jobs at its Auburn Hills, Michigan facility and shift manufacturing operations to Tijuana, Mexico. Similar stories are available for Michigan-based solar technology company Uni-Solar and Maryland-based BP Solar.
So what gives? You’re an experienced manufacturing entrepreneur with a great green idea. You need capital. Where do you go? Not to the banks: banks have never been enthusiastic about lending to businesses that lack a proven and predictable revenue stream, and green business is still too new and wobbly for Wall Street. Venture capitalists? Their biggest goal is to throw some money in, wait about as long as their next haircut and rake back an enormous return on investment. Even when green ventures succeed, the road is often long and slow. So unless your maiden Aunt Gertrude shuffles off her lavender-scented mortal coil and leaves you 250,000 shares of Apple stock, it’s unlikely your green idea will ever get off the ground – in this country, at least.
The New York Times recently profiled one such entrepreneur: Chuck Provini, the CEO of New Jersey-based Natcore Technology, a manufacturer of a solar panel production device. Though the device was invented and launched by Provini in the U.S. and his company is chartered here (Natcore has just 10 employees), production of the product is carried out in Zhuzhou, China. The foreign manufacturing isn’t because Provini doesn’t love his country, he just couldn’t get anyone in the U.S. to take interest. But investors in Brazil, Taiwan and China were certainly interested and willing: the company ultimately chose China.
“I feel what China is doing is taking chances on new technologies, investing relatively small amounts of money understanding that some of those technologies will blossom,” Provini told the New York Times. Natcore sought U.S. government and business grants, but ultimately found that the few grants available came with too many restrictions. Under the Obama administration, $50 billion out of the $800 billion federal stimulus package has been earmarked for grants, tax credits or loan guarantees for the purpose of developing clean-tech factory jobs. Critics have charged that is too little, too late.
We’re not good at long-term planning in this country anymore. If it doesn’t make us rich by our next birthday, or get us on Dancing With The Stars by next week, or put a pair of Prada shoes on our feet with no discernible effort, most of us aren’t interested.
Green manufacturing organizations founded in the U.S. that manufacture abroad have consistently cited the lack of subsidy and support from the U.S. government as reason for moving offshore. As of the second quarter of 2010, of the top 10 clean tech employers in the world, only two were in the United States: Itron, a smart grid company employing 9,000 people in Liberty Lake, Washington; and Baldor Electric Company, a manufacturer of electric motors that employs 7,250 people in Fort Smith, Arkansas.
We may be interested in paying lip service to green, but we’re still in love with oil, like the boyfriend or girlfriend we know is bad for us but we just can’t say goodbye to. In 2008, the Political Economy Research Institute released a report called Green Recovery that estimated that $100 billion spent in the U.S. on clean energy over a decade could create two million new jobs, compared to just 500,000 jobs if the same money was invested in oil and gas-related industries. The Center for American Progress reports similar findings: in its Green Jobs 101 publication, the Center stated that “renewable energy and efficiency improvements create twice as many jobs per unit of energy and per dollar invested than traditional fossil fuel-based generating technologies.” Yet in the U.S., we continue to subsidize the fossil fuel industries to unfathomable extent.
Green jobs were once touted as “outsource-proof.” The thought process was that since many green installations are retrofits, most of the jobs had to be done on-site. The truth, according to the Renewable Energy Policy Project think tank in Washington, D.C., is that installation and maintenance of clean energy hardware such as solar panels and wind turbines account for less than 30 percent of the total labor involved. Those panels and turbines are increasingly likely to be manufactured offshore – and this is where the real jobs are. As a result, the U.S. trade deficit for renewable and clean energy products rose to 1,400 percent – almost $5.7 billion – between 2004 and 2009.
Last year, the government of China spent $34.6 billion to encourage and build green manufacturing: twice what the U.S. government invested. According to Clean Tech Job Trends 2009, China is now the headquarters of six of the biggest renewable energy employers in the world—up from three in 2008.
The Renewables 2010 Global Status Report, an annual publication from global research group REN21, puts total jobs in the renewable energy industries at more than three million globally in 2009, with that number on the rise. According to the same report, however, Brazil and China account for the largest share of these green jobs, with more than 700,000 and 250,000 (respectively) in the bioethanol and solar hot water industries alone.
Certainly, not all the problem can be laid at the feet at a lack of enthusiasm and funding within the U.S. It’s still impossible for Western nations to match China’s low wages. There have also been accusations that the Chinese are actively breaking World Trade Organization (WTO) rules in growing their green sector. Last week, the Obama administration announced that it planned to proceed with an investigation into China’s overzealous support for its renewable energy industry. The investigation was prompted by a complaint from the United Steelworkers Union that China has been engaging in government subsidizing of the country’s green manufacturing that specifically breaks WTO rules: specifically, that the country is combining excessive government subsidies with illegally cheap labor while still exporting the majority of their goods. The country is also accused of deliberately restricting the export of components needed for green manufacturing by other countries: materials such as rare-earth minerals. The U.S. investigation could ultimately lead to litigation at the World Trade Organization.
But certainly the Chinese government has its head in the right place in its support of its growing green sector. As the Clean Tech Job Trends report concludes, succeeding in the green economy can’t be done without government assistance. “Think of what the Internet industry might look like if the U.S. government hadn’t invested in the build out of its predecessor – ARPANET,” concluded the report. “The clean-tech sector relies similarly on the deployment of new infrastructure, like a smart grid with enhanced, modernized grid infrastructure to carry green electrons and incorporate charging stations to support all-electric and plug-in hybrid vehicles. National governments need to take strong roles in supporting such build outs by ensuring that they walk the walk – with regulatory and policy support to build out critical infrastructure, and to be at the forefront of procuring clean-tech products and services.”
So, after the election when the press releases have been put away and the debates are over, we’ll see who, if anyone, is prepared to pursue the green jobs promises. While I’m sure we’re all holding out optimistically that we’ll be surprised, experience tells us it’s about as likely as a phone call from Aunt Gertrude’s executor.