As our country is devastated by more and more severe droughts, floods, fires, and superstorms, the public is demanding regulation of the greenhouse gasses that cause climate change. The corporations that profit from coal, oil, and gas fear such regulation will reduce their profits and the value of their investments. They and their political mouthpieces have a solution, however: persuade the public that regulation of greenhouse gasses will destroy American jobs. The truth? Climate change is destroying American jobs right now — but climate protection will produce millions of new jobs. Here’s why.
Climate change is causing extreme weather. The giant reinsurance company Munich Re, which has gathered the world’s most comprehensive database of natural disasters, concludes that worldwide, “Floods have more than tripled since 1980, and windstorm natural catastrophes more than doubled, with particularly heavy losses from Atlantic hurricanes. This rise can only be explained by global warming.”
Floods, fires, droughts, and storms related to climate change are devastating not only health and the environment, but also the US economy. Superstorm Sandy alone caused an estimated $80 billion in damage. The drought that affected 80% of US farmland last summer destroyed a quarter of the US corn crop, stalled transportation on the Mississippi River, raised food and energy prices nationwide, and did at least $20 billion damage to the economy.
What does all this have to do with jobs?
Consider Sandy. According to Mark Zandi, the Chief Economist of Moody’s Analytics: “Superstorm Sandy wreaked havoc on the job market in November, slicing an estimated 86,000 jobs from payrolls.” What kind of jobs? “The manufacturing, retailing, leisure and hospitality, and temporary help industries were hit particularly hard by the storm.”
But isn’t that kind of job loss just temporary? Consider hurricane Katrina. In 2004 the New Orleans region had 671,000 jobs. Katrina wiped out 129,000 of them — about twenty percent. In 2011, the region had 90,000 fewer jobs than on the eve of Katrina.
The economic threat of climate change isn’t limited to hurricanes. Heat waves increase energy costs and cause droughts, which kill crops and increase food prices. Floods destroy houses, businesses, and infrastructure. Closed businesses and lost earnings represent an economic loss that can never be recovered. The devastating health effects of extreme weather like heat waves and floods not only harm individuals but represent a cost for the whole economy.
EPA regulation promotes jobs
Many studies have documented the beneficial effects of EPA regulations. Research by the EPA indicates that as of 2008, environmental protection created a net positive increase of 1.7 million jobs. A study by the Office of Management and Budget found that EPA air and water regulations from 1999 to 2009 cost $26-29 billion annually but produced benefits from $82-533 billion. EPA regulation has led to the development of the rapidly growing environmental control industry. It has encouraged technical innovation, such as the development of catalytic converters, which has made the US one of the world’s leading exporters of environmental control technologies.
When the EPA issued new fuel efficiency standards for vehicles and pollution standards for new power plants, they won wide support among unions that represent the workers affected by them. Ten major unions joined environmental groups to issue a statement supporting “the actions by the Environmental Protection Agency to regulate greenhouse gas emissions under the Clean Air Act” and urging Congress to “reject efforts to weaken this authority.” Their release on the statement was headed, “BlueGreen Alliance brings Together Unions and Environmentalists in Support of EPA Efforts to Protect Public Health and Safety.” It noted that, complemented by clean energy policies, regulations will create jobs and increase America’s economic competitiveness. Unions supporting the statement included the Steelworkers, Communications Workers, Service Workers, Laborers, Utility Workers, American Federation of Teachers, Transit Workers, Sheet Metal Workers, Auto Workers, and United Food and Commercial Workers.
The evidence supports the jobs benefits of EPA regulation of greenhouse gasses under the Clean Air Act. For example, a study by Ceres and the Political Economy Research Institute of the University of Massachusetts titled New Jobs — Cleaner Air: Employment Effects of Planned Changes in the EPA’s Air Pollution Rules, examines the jobs effects of some of the new regulations — ones that have been harshly attacked by EPA critics. This well-documented study finds that far from being “job killers,” the new regulations will create nearly 300,000 new jobs, especially skilled, high-pay jobs for engineers, project managers, electricians, boilermakers, pipefitters, millwrights, and iron workers. The regulations would lead to net job increases of more than 120,000 job years in Illinois, 123,000 in Virginia, 113,000 in Tennessee, 76,000 in North Carolina, and 76,000 in Ohio. The study points out that regulation will have many other benefits in addition to increased employment. It will ensure cleaner air, improve public health, promote more efficient, more competitive technologies, reduce greenhouse gasses, and increase state tax revenues. And it will stimulate “induced jobs” that result when workers have money in their pockets to buy things made or sold by other workers.
A Just Transition
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All industrial modernization — whether for protecting the environment, increasing productivity, improving the product or any other reason — threatens to eliminate some jobs in obsolete and less efficient facilities. So while the transition to a new energy economy will create hundreds of thousands of new jobs, it will also eliminate some existing jobs. The fact that many states and many workers will get new green jobs provides little solace for the people and communities who have lost theirs through no fault of their own.
It is a basic principle of fairness that the burden of policies that are necessary for society — like protecting the environment — shouldn’t be borne by a small minority who happen to be victimized by their side effects. Unless workers and communities are protected against the unintended effects of the transition to a new energy economy, there is likely to be a backlash that threatens the whole effort to protect the environment — and to save the planet. Not only that, the beneficial job creation that comes from appropriate environmental regulation will be lost. How can public policy forestall such undesirable side effects?
A good model here could be the highly successful process that helped local communities adjust to the disruption and job shifting that resulted from the closing of military bases under the Base Realignment and Closing Commission (BRAC). Those communities were provided a wide range of federal assistance, including, planning and economic adjustment assistance, environmental cleanup, Community Development Block Grants and Community Service Grants.
Workers dislocated by base closings also received extensive support. The Department of Defense itself provided advance notification of a reduction in force; pre-separation counseling; a hiring preference system with federal agencies to re-employ qualified displaced DOD employees; financial incentives to encourage early retirement of those eligible. Workers affected by base closings were also eligible for help under National Emergency Grants, “Rapid Response” programs, comprehensive assessments and development of individual employment plans and job training.
Communities and individuals affected by energy transition in general and EPA regulations in particular could be similarly targeted for assistance from such existing programs as the Department of Labor’s Rapid Response Services and the National Emergency Grants of the DOL’s Employment and Training Administration, as well as funding for economic development and industrial efficiency and modernization from the Departments of Energy and Commerce.
Because the needed resources are scattered among many different government agencies, the first step might well be for President Barack Obama to establish an interagency task force composed of U.S. agency officials overseeing issues of employment, energy and the environment. Their first task could be to create a transition package for coal miners, utility workers and other affected workers that would provide robust financial and training support and preferential access to the new jobs created by environmental policies. That could be combined with vigorous support for economic planning and investment in the affected communities, focusing on the development of new clean energy industries. Think of it as a GI Bill for displaced workers and their communities.
Climate protection: A new jobs program?
The next item on the EPA climate-protection agenda is regulation of emissions from existing power plants. Predictably, opponents are claiming that such regulation will be “bad for jobs.” The opposite is the case: EPA regulation of greenhouse gas emissions will be positive both for jobs and for the broader economy.
How many and what kind of jobs EPA regulation will create of course depends on the specific rules it establishes. Let’s consider one example. A study by Synapse Energy Economics developed a Transition Scenario for the electric power industry based on reducing energy consumption, phasing out high-emission power plants, and building new, lower-emission energy facilities. The study estimated the number of “job years” — one new worker employed for one year — that would be created by the Transition Scenario over a decade.
- 444,000 job-years for construction workers, equivalent to 44,400 construction workers working full time for the entire decade.
- 90,000 job-years for operations and maintenance workers, equivalent to about 9,000 full time workers employed over the decade.
- 3.1 million indirect jobs for people designing, manufacturing, and delivering materials and jobs in local economies around the country induced by spending by workers hired in the Transition Scenario.
Of course, this is only one piece of the climate-protection puzzle. A comprehensive program to convert to a climate safe economy will produce tens of millions of jobs.
When the US went from the Great Depression to World War II, it created millions of new jobs making the products needed for the war. Faced with the devastating threat of global warming, the best protection for the future of our jobs and our communities is to create millions of jobs making what we need to protect us against climate change.
This piece is drawn from a longer, footnoted discussion paper available here.