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How Obama’s Climate Rule Could Change The U.S. Job Market

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"How Obama’s Climate Rule Could Change The U.S. Job Market"

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Solar City employees install a solar panel on a home in south Denver.

Solar City employees install a solar panel on a home in south Denver.

CREDIT: AP Photo/Ed Andrieski

A job-killing nightmare. In coal country, this is how the Environmental Protection Agency’s new proposed limits on carbon pollution from power plants are described. For them, the rules represent an attempt to drive plants out of business, threaten employment, and put already-struggling mining families in an even more precarious position.

For others, the EPA’s new carbon rules are the opposite. They’re seen as a coming employment renaissance for clean energy. As states seek to limit emissions by investing in cleaner technology like solar and wind, jobs will be created across multiple sectors — manufacturing, construction, and agriculture — industries which are already in dire need of a boost.

It seems as if both scenarios are true.

“These rules are definitely going to change the job market,” Josh Bivens, an economist at the Economic Policy Institute, told ThinkProgress on Thursday. “In the long run, when the overall level of employment evens out, the composition of employment will change. You’ll have fewer jobs in coal-mining, and more jobs in new energy sources, whether that’s in solar, wind — probably some in energy efficiency, too.”

So the question now is not whether the job market will change — we know that it will — but how. Will the amount of clean energy-related jobs gained ultimately outnumber the amount of coal jobs lost? When coal jobs are lost, will those workers be able to adapt? How can we make sure?

Green Jobs Gained, Coal Jobs Lost

The question of whether clean energy jobs will ultimately outnumber coal jobs is still hotly debated. A handful of special interest groups have tried to say they won’t — driven most notably a U.S. Chamber of Commerce analysis that projected reduced employment by almost 450,000 jobs in 2020. That report, as many have pointed out, is based on a much more aggressive policy than the one actually proposed by the EPA, and fails to account for any new jobs that would be created in the clean energy sector.

The truth is, any current analysis on the amount of jobs gained and lost in each sector is largely speculative at this point. The proposed rules could differ greatly in their final form, and will take years to fully implement.

At the moment, the only credible estimate based on the EPA’s actual policy comes from the EPA, which projected the coal extraction industry would see losses of 11,500 to 14,300 jobs from 2017 to 2020 as a result of the new rule. However, it also projected jobs in renewable energy capacity construction would see increases of 15,800 to 19,100 over the same time period. The EPA also estimated there would be 76,200 to 112,000 jobs created solely by the energy efficiency sector in 2025. The numbers are dependent on how states’ choose to lower their emissions.

That’s a good sign that renewable jobs gained will eventually outnumber coal jobs lost, and green energy industry players have the same indication.

“It looks like the rule will have a positive impact on renewable energy development,” said Todd Foley, the senior vice president of the American Council on Renewable Energy. “The regulatory impact analysis EPA has done demonstrates that the rule will have a positive impact on additional renewable energy employment, so that implies that there will be additional investment in jobs associated with that.”

It’s not just industry groups, either. Colin lu Duc, a partner with investment firm Generation Investment Management, told GigaOm that the EPA proposal would create “larger markets for clean solutions,” a signal “that dirty energy is yesterday’s business model and that clean innovation is tomorrow’s.”

And while he couldn’t provide a company-wide comment on the EPA’s rule, a spokesperson for Google Green — which has invested millions in clean energy projects throughout the last decade — pointed to a tweet from Google’s Executive Chairman Eric Schmidt, who said the EPA rule would mean “more clean energy” for the tech giant’s buildings and data centers.

Another reason to believe that replacing parts of the coal industry with renewable energy will result in a net job gain is that the renewable industry inherently needs more people to work for it than coal does. Multiple studies over the last 10 years — from EPI to the University of California at Berkeley — show that the renewable energy sector generates more jobs per megawatt of power installed, per unit of energy produced, and per dollar of investment than the fossil fuel-based energy sector.

In terms of solar, for example, a 2004 Berkeley study showed that every $1 million of investment in the solar industry generates 5.65 person-years of employment over ten years, while $1 million invested in the coal industry generates only 3.96 person-years of employment over the same time period. For the wind industry, $1 million in investment equals 5.7 person-years of employment, the study showed.

Alleviating The Job Loss Pain

Still, while it may be comforting to know that clean energy jobs added will eventually match or outnumber job losses for coal, a huge problem still remains in the short-term for coal industry workers. The EPA does estimate that the rule will result in losses for that sector, which has the real potential to hurt those workers who may not have the skills to seamlessly transition to another job.

“Gross job losses, even if counterbalanced by gains in other sectors, inflict real economic pain,” said Josh Bivens in a recent blog post for EPI. “An optimal climate change policy would aim to ameliorate this pain.”

Bivens told ThinkProgress that one of the things he’s been dismayed about is that since the unveiling of the regulations is that there hasn’t been enough talk by either Congress or the President of introducing legislation that would help workers displaced from the coal industry and help them transition. If the rule is going to have gross costs to the coal industry, he said, there should be some sort of investment to mitigate the damage.

“Federal money could go to do infrastructure projects in affected states, tailoring them to be able to be filled by the same group of people who could lose their jobs,” he said. “Money could be allocated for re-training in other sectors. If coal companies find themselves not viable, we’d want to make sure there’s no problem of coal miner pensions going under.”

Steps toward mitigation have recently been taken by the Administration, if not directly because of the EPA rules. On Wednesday, the Department of Labor announced it would award $7.5 million to help Kentuckians who used to work in the coal industry find new jobs. Kentucky — where more than 90 percent of electricity comes from coal — faces an 18 percent emissions reductions goal under the new EPA power plant rule. That’s less than the nationwide goal of a 30 percent reduction.

But the reason Kentucky needs mitigation from coal job losses is not currently because of the regulations. It’s because of the coal industry’s steady, unrelated decline — a problem that coal states like Kentucky and West Virginia have been slow to adapt to. The two states have lost a total of 38,000 coal jobs since 1983.

Fortunately, Congress and the President have a good amount of time to figure out what kind of mitigation measures, if any, they want to take. As Bevins noted, it would substantively make more sense to wait on proposing mitigation efforts until the final rules are unveiled — but politically, it might ease some worries to do it sooner.

“We do transitions pretty badly in the U.S. economy,” he said. “It’d be nice to actually get it right this time.”

The Benefits Of Transition

If the U.S. can get the transition right, the long-term outcome of the EPA’s carbon rule will not only be fighting climate change, but smoothly phasing out of coal jobs in favor of industries that provide safer, healthier, and more gender-inclusive work conditions.

One benefit of this is that it speeds up a process that is already happening, proverbially ripping the band-aid off instead of slowly pulling it. Coal jobs in the U.S. have been in record-breaking decline for years — long before Barack Obama became president — while renewable energy industries are seeing consistent annual growth.

And unlike coal, a clean energy economy also has the potential to boost much-needed manufacturing jobs in different ways. According to a 2013 Center for American Progress report, 26 percent of all clean energy jobs fall into the manufacturing sector, and tend to come with wages 13 percent higher than the U.S. median. Those jobs are, on average, more accessible to workers without a college education, according to another study of clean energy jobs by the Economic Policy Institute.

It’s not just manufacturing, either. Because the EPA’s regulations were created drive demand away from carbon-heavy electricity and into other emerging sectors like energy efficiency and new technological implementation, the indication is that jobs will be created in those sectors, too.

But arguably the most important benefit to growth in these sectors is that the workers within them will be healthier, and therefore better performing. The health benefits of cutting power plant emissions — reduced sulfur dioxide, nitrogen oxide, and particulate matter — include decreasing rates of asthma attacks, respiratory disease, heart disease, and a host of other ailments. As ClimateProgress’ Jeff Spross has pointed out, this is a big reason why the 1990 sulfur dioxide laws and lots of other regulations helped the economy: the economic benefits of lives saved, hospital visits prevented, and an overall healthier workforce far outweighed the compliance costs to businesses.

That’s something the majority of Americans want, according to polling data released Friday from Advanced Energy Economy, an environmentally-friendly business group. That survey found 58 percent of people are in favor of replacing coal power sources with renewable forms of energy, even if it winds up costing more to do so in the short-term.

“EPA’s regulation of greenhouse gas emissions represents an opportunity to modernize the electric power system for the 21st century, and this new survey shows that Americans support the idea,” AEE’s senior vice president Malcolm Woolf said in a statement. “Our member companies stand ready to deliver on the promise of a modern electric power system that is both cleaner and higher performing.”

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