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The Next Industrial Revolution

At Senate EPW hearing, witnesses call for transition to a clean energy world

This week’s Senate Environment and Public Works (EPW) hearing entitled “Green Jobs and Trade,” hosted by the ‘Green Jobs and the New Economy’ subcommittee, was a call to arms for growing our clean energy economy. CAP intern Lee Hamill has the story.

Conservatives and progressives alike agreed that we need to enhance America’s international competitiveness in jobs, trade, manufacturing, and innovation: The question is what the rules of the game should be.

Testifying witnesses included CAP’s own Kate Gordon, as well as Leo Gerard from United Steelworkers, Paul Cicio from Industrial Energy Consumers of America, John Danner from Northern Power Systems, and David Montgomery from Charles River Associates.

China’s increasing clean energy prowess became a major topic of debate as Subcommittee Chairman Bernie Sanders opened the agenda:

China understands that investing in clean energy is good for the economy and creates jobs”¦ Unfortunately there are some in this country who do not.

China was raised numerous times throughout the course of the hearing — both as an example of a role model in strong energy and infrastructure investments, and also as the reason the playing field isn’t even.

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In his testimony, Gerard focused on China’s violation of World Trade Organization (WTO) laws and how it serves as a barrier to United States’ clean energy trade: “We’ve proven 9 times in the past 2 years that China cheats.” Rare earth resources, for example, are used in the production of clean energy products all across the world, and the high costs incurred on the United States by export restrictions are resulting in U.S. companies shifting production activities to China. Gerard argued that the United States must take action against illegal trade procedures in order to compete in the global market.

But it isn’t just about enforcing the rules. China is also investing far more than the U.S. is right now. While our House Republican caucus proposes reductions in clean tech and energy investments for the Fiscal Year 2011, China is investing $12 billion monthly into renewable energy technology and development — $12 billion monthly.

Gordon also urged America to “get off the bench and join the green jobs race,” and she proposed multiple ways this could be achieved. One area where America is particularly failing is the manufacturing sector. In 1953, manufacturing made up 28.3 percent of U.S. GDP; today that number has fallen to a mere 12 percent. The manufacturing sector has beendeclining, and it is the reason why so many of our ideas and innovations are being shipped overseas. Revitalizing the manufacturing sector by investing in clean energy development would create domestic jobs for middle-class Americans, a group that makes up two thirds of the United States workforce.

Gordon classified our current economic situation as a transformational period. Throughout the history of energy, the world has experienced massive switches from wood to coal, from coal to oil, and we have undergone serious transitions including the global migration of jobs from agriculture to industry.

Our green economy transformation can parallel that of the Industrial Revolution; back then, Gordon argued:

We did not sit around counting exactly how many jobs might be lost in agriculture if people moved to the cities to work in factories.

As the rest of the world moves forward in this global transition from traditional fuels to clean energy, the United States falls farther and farther behind. Other countries are not going to wait for us to catch up.

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At Northern Power Systems, Danner made it clear that his company knows this — and takes every effort to ensure that their wind turbine materials come from domestic providers. They accomplished this by opening their own production facility in Michigan for the wind turbines they produce. Northern Power Systems continues to grow, as it is able to provide more and more jobs to Americans. We need to develop the means through which manufacturing can prosper in this country, or we are going to see a serious downturn in the job market.

During the hearing Gordon also stressed the need for the passing of a national Clean Energy Standard (CES) in the United States. Danner echoed this idea, explainin

Renewable energy standards will provide much-needed certainty to private capital markets and will greatly assist in investment capital formation for domestic manufacturing.

Germany and China set a precedent for a national CES, as implementation of such a standard aids the development of their green economies.

In contrast, Cicio, representing the Industrial Energy Consumers of America (IECA), argued that placing a standard on renewable energy could be detrimental to the economy. But even while opposing a national CES, he did promote energy efficiency as an option for job creation and reducing greenhouse gas emissions:

Energy efficiency should always come before renewable energy; otherwise, we are just needlessly increasing the amount of energy we are wasting.

He cited IECA’s “Sustainable Manufacturing & Growth Initiative” (SMGI) as a supportive example for energy efficiency. SMGI is a set of ten policy recommendations that help boost the short-term U.S. economy and support long-term environmental and economic benefits. Models performed by the University of Maryland yield the following results from implementation of SMGI policies: 3.2 million job years created in 10 years, 10 percent reduction of U.S. greenhouse gases, and a $389 billion increase in U.S. GDP. The fact that an anti-mandate, anti-regulation group is making a claim for energy efficiency represents a step forward for America’s emergence into the global clean energy market.

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As the hearing reinforced, the phrase ‘green jobs’ stands for much more than just the jobs themselves. To ensure that the U.S. captures a leading role in this current global clean energy transformation, we need to boost investment and clean energy policies at home to stay competitive.

— Lee Hamill, CAP energy intern