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Green jobs

August 17th, 2015

The question of “green jobs” has arisen in a lot of different contexts. At present, the most relevant is the problem of how to deal with the employment effects of the necessary and inevitable decline of industries based on fossil fuels. Part of this question is whether expanding sectors of the economy will create a number of new jobs comparable to those that disappear , and whether those jobs will be appropriate for the kinds of workers who worked, or would have, in the declining sector (that is, predominantly, male manual and trades workers). There are a lot of conceptual problems here, which I’m not going to address in detail. Rather, I’ll just look at some raw numbers and throw in some comments.

I was struck recently to read that, in the United States, the solar power industry now employs 174 000 people. That’s twice as many as coal mining. And, while these aren’t direct substitutes, they are, it would appear, broadly similar kinds of industries in the sense that the core workforce is dominated by male manual and trades workers.

Looking quickly at similar stats for Australia, I found that the numbers were reversed. According to the ABS, there were just under 40 000 Australians employed in the coal mining industry in May 2015, down from a peak of 60 000 in 2012, but well above the 20 000 or so employed in the early 2000s.

The Clean Energy Council estimates around 20 000 jobs in the renewables sector in 2014 – that’s up from virtually zero before 2010. So, broadly speaking growth in renewables has offset the decline in coal mining.

One specific issue in the US, that’s less of a problem here, at least in Queensland, is that of declining communities in places like Appalachia. Thanks to the practice of Fly-in Fly-Out, there are many fewer Australian communities focused on coal mining.

Finally, some related statistics I found in the process of researching this. The forestry and logging industries currently employ 3900 people (this number bounces about a lot, so I’m not sure how reliable it is). That’s about the same as the combined total for the NSW and Victorian National Parks systems. I expect if you added in various kinds of manual/trades jobs in adventure tourism and similar, you would find a net gain over the past 25 years or so.

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  1. Tom Davies
    August 17th, 2015 at 16:38 | #1

    If renewable energy can be supplied with fewer people than required for current energy sources all the better.

    How large is the number of employees who change industries every year anyway due to technological change, etc.? How many of the 20,000 coal miners who lost their jobs in the last three years are still unemployed? I bet the number of coal mining jobs lost because of increased renewable energy use in Australia would be dwarfed by job changes from other causes and coal mining job changes due to overseas demand and exchange rate movements.

  2. John Chapman
    August 17th, 2015 at 17:49 | #2

    Jeez, JQ – I thought you were going to say there, for a moment, we need a green army ….

  3. Geoff Edwards
    August 17th, 2015 at 18:37 | #3

    In principle, in the absence of exchanges across the external borders, then any decline in jobs in one industry will be offset by increases in others. Surely that’s what market economists teach us: that markets automatically adjust supply and demand, production and consumption, expenditure and investment. Transfers in a closed economy are surely a zero-some game. The complaints from business that any particular new tax will ruin the economy surely suggests that they don’t themselves even believe in the market mechanism. Any new tax may ruin some individual companies, but the investment potential will be taken up by others.

    The complication arises with trade across external borders, and in particular, the transfers of taxes and investment capital. These transfers can drain vitality from one sector or another or an entire economy.

  4. Ikonoclast
    August 17th, 2015 at 19:09 | #4

    @John Chapman

    Better a green army than a black army. Black army = coal and oil = ugliness and pollution = climate change = mass extinction event.

  5. August 18th, 2015 at 03:50 | #5

    The industries are not strictly comparable. Coal-miners dig fuel: as long as you have coal generators, you will need miners to supply them. Wind and solar plants (also geothermal, hydro and tidal) require many manufacturing and construction workers to build, but very few indeed to operate. Suppose we get to 100% renewable energy by 2050. Most of the green jobs will then fold, as the renewable industry shrinks to steady-state replacement on a cycle of 25-30 years.

    I’m not saying this to cast doubt on the absolute necessity of the transition. But it is important to level with the citizenry.

  6. Ikonoclast
    August 18th, 2015 at 07:24 | #6

    @James Wimberley

    A proportion of workers not needed for green energy jobs once green energy is mature, can be re-trained (or the next generation trained) for other needed tasks, especially for health, education, welfare and reafforestation. I would hope that by 2050 a forestry worker is someone who plants trees.

    It should even be possible to move to say a 35 hour week instead of a 40 hour week to expressly ensure full employment (less the frictional unemployment) at 35 hours a week.

  7. derrida derider
    August 18th, 2015 at 09:59 | #7

    I’ve always been very nervous of running lines about “green jobs”. The reason is simple – more jobs producing the same outputs (in, say, electricity) is the same as saying “lower productivity and hence living standards”. That’s giving ammunition to the fossil fuel industries.

    Of course said industries also talk about “creating jobs”, and it is just as fallacious This general point – that creating lots of new jobs is only a good thing for living standards if they increase production disproportionately- is of more general applicability.

    The anecdote about the American economist visiting a construction site in India comes to mind:
    Economist: “But you are building this dam with shovels and wheelbarrows!”
    Host: “Yes, it creates jobs for the people”
    Economist: Oh, I thought you wanted a dam built. If its about jobs give them teaspoons and buckets.”

    The aim surely should be to produce the same outputs with as FEW jobs as possible.

  8. Ikonoclast
    August 18th, 2015 at 10:44 | #8

    @derrida derider

    Nobody sensible is saying “more jobs” for the long run. However, there might well be equal or even more jobs during the transition and build-out or roll-out phase.

    If we produce the “same outputs with as FEW jobs as possible” this is indeed efficient in one sense. However, it raises the issue of how to deal with the allocation of wealth following such efficient production of the real goods and services which constitute wealth. To put it simply, capitalism is not well adapted to this task (allocating to avoid rampant and increasing inequality).

    High production with few jobs means capital intensive production. While capital ownership is concentrated then the rewards of capital intensive production will be concentrated leading to ever higher inequality. At the same time, few jobs means few people with wages to spend on said production. This leads to a capital accumulation crisis or overaccumulation.

    I ask, how is capitalism going to deal with this (and other) capital accumulation crises without recessions, depressions and wars? These are the usual events which destroy or idle capital in standard capitalism. Calling all orthodox economists. What is your answer to this dilemma?

  9. ZM
    August 18th, 2015 at 12:07 | #9

    I have heard there is a current world wide shortage of electrical engineers which needs to be addressed if we are to implement 100% renewable energy on time.

    Tim Flannery’s upcoming book release will cover what he calls “third way” means to address climate change like farming sea weed and reforestation.

    Farming lots of sea weed would create quite a lot of jobs on the coast, which I am sure people would enjoy. I am not sure how the sea weed is to be used, maybe it’s the edible kind or else sea weed is good for gardening so could replace artificial fertilisers that release greenhouse gasses.

    Reforestation to draw down emissions would also create a number of jobs. I guess you would have to finance these jobs by taxes as I can’t see how a business could profit from it, until maybe you get to the point where the trees and plants are ready to convert to biochar which could be sold to farmers etc to improve soils.

    One problem with this is that current prices for trees undervalue the cost of trees because nature provides most of the work growing the trees. So it would be better to phase out forestry practices that undervalue the cost of trees do as to be able to charge higher prices for trees to make the reforestation industry more financially sustainable and less reliant on taxes.

  10. Donald Oats
    August 18th, 2015 at 18:42 | #10

    @James Wimberley
    While what you say is true enough, a similar effect happens when an industry develops better automation (eg the car manufacturing process) which then displaces skilled and semi-skilled workers. Some of the Asian factories are like something out of science fiction, hardly a person in sight. The economic ramifications of this are one thing, but the social ramifications are still to unfold.

    Taking a different angle, what can we do about a government that are crusaders—by their own words—for the coal industry? Should such a government be entitled to make laws, or to repeal existing laws, just because the laws sometimes upset the coal industry? Where does it end? Hopefully with them getting thrown out of office.

  11. Stockingrate
    August 18th, 2015 at 19:01 | #11

    @Donald Oats
    Are you so sure the alternative to the present Labor government in Qld is any better?

  12. Stockingrate
    August 18th, 2015 at 20:33 | #12

    My 2c.
    The global transition will be (is) very damaging for Australian labour income. AUD has fallen reducing the value of nominal AUD wages, mining jobs were very well paid (both longer hours and higher wages per hour than most), there were also lots of well paid jobs in support industries such as rail, engineering, engineering consulting, construction, legal, and not so well paid such as hospitality. Profits, royalties and taxes won’t be flowing in the same volumes domestically and so there won’t be as large a source for employing government contractors or nurses etc.

    Many, perhaps most, of the the renewable jobs would probably have been reported under ABS as Construction whereas many coal construction jobs would not be captured by the comparison above, being reported as ABS construction not mining.

    OTOH a large portion of our coal is coking.

    Population growth in one year, 2014, was 330,000, making 20,000 solar jobs over 4 years seem small. We are in trouble.

  13. August 18th, 2015 at 21:30 | #13

    “I have heard there is a current world wide shortage of electrical engineers..”

    Do you need an electrical engineer, as opposed to a more easily trained electrician, to instal a solar roof? Even utility farms are modular: the biggest ones are assembled out of 1 or 2MW blocks. A 500 MW wind farm is assembled out of identical turbines of 2 MW or so. The amount of highly skilled engineering design and review needed for such Lego operations is reduced by replication. This must be one of the advantages of large-scale installers like SolarCity, and developers like SunEdison. Compare the engineering workload of a dam, geothermal well, or (off the charts) a nuclear reactor.

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