Green-Collar Jobs Generated By The Senate Stimulus Plan

MEMORANDUM
To:  Jason Walsh, Green for All
From:  Elena Foshay
Date: January 30, 2009
RE: Renewable Energy and Energy Efficiency Jobs Created by the American Recovery and Reinvestment Act of 2009

According to a report by Jared Bernstein and Christina Romer, the American Recovery and Reinvestment Act has the potential to create almost 3.7 million jobs.  Of these, 541,000 will result from investments in energy and infrastructure.   By contrast, the Political Economy Research Institute estimates that, for every $1 million in new spending on building retrofits, public transit, smart grid projects, and renewable energy, 16.7 direct jobs are created.   With an estimated total investment of $130 billion in the proposed Senate plan, the result would be over 2 million jobs created.  

Based on our research, which breaks out by type each green investment included in the Senate version of the stimulus bill, we estimate that a total investment of $130 billion will create over 1.6 million direct jobs could be created from investments in energy efficiency, renewable energy, smart grid projects, public transit and transportation infrastructure, advanced battery manufacturing, and alternative-fuel vehicles.  

While the Senate version of the Act invests some $3.5 billion in job training, only a small portion of that ($250 million) is prioritized for training in these sectors.  If, say, half of that grant fund — $125 million –  were to be directed to training for energy efficiency and renewable energy industries, it would only allow approximately 30,000 workers to access green jobs training programs, essential for providing skills for participating in the rapidly changing and increasingly green economy.  This falls far short of the expected demand created by the American Recovery and Reinvestment Act investments.    

The Apollo Alliance recommends drastically increasing green jobs training funds made available through the Act.  The Apollo Alliance further recommends that priority be given to programs developed by multi-stakeholder training partnerships, with preference for those developed by labor-management partnerships.

The following analysis details our assumptions:

I.  Energy Efficiency

It is estimated that every $1 million spent on energy efficiency retrofits generates about 10 person years of employment in direct installation of efficiency measures and another 3-4 person years in the production of relevant materials.  In addition, every one direct construction job supports 1.9 indirect jobs in other sectors.  

The Senate version of the Recovery Act invests over $50 billion in improving energy efficiency in schools, subsidized housing, and public buildings, including:

• $19.5 billion for school construction, renovation and modernization
• $7.4 billion to the Department of Defense for facility construction, maintenance, and upgrades
• $2.25 Billion for the HOME Investment Partnerships Program block grant
• $357 million for renovation of National Institute of Standards and Technology facilities using green technologies
• $4.2 billion for Energy Efficiency and Conservation Block Grants
• $1.6 billion is provided to DOE for grants to make schools and hospitals, significant users of energy, more energy efficient
• $6 billion for repair of federal buildings to increase energy efficiency using green technology
• $200 million for energy efficiency upgrades at national parks and other public facilities
• $8.5 billion to HUD for construction and maintenance projects that will improve energy efficiency in public housing

This $50 billion investment in energy efficiency would create 500,000 jobs construction jobs, as well as an additional 200,000 jobs in materials manufacturing.

The Senate version of the Recovery Act also provides $2.9 billion to the Weatherization Assistance Program.  According to the Department of Energy, weatherization creates 52 direct jobs for every $1 million in WAP funding, as well as additional jobs for subcontractors and material suppliers.   A $2.9 billion investment would create 150,800 direct jobs in the construction sector, performing auditing and installation of efficiency improvements.

II.  Renewable Energy

The Senate version of the Recovery Act makes some important investments in expanding deployment of renewable energy technologies.  This includes:

• $2.648 billion to DOE for energy efficiency and renewable energy research, development, demonstration and deployment activities
• $10 billion is provided for new loan guarantees aimed at standard renewable projects such as wind or solar projects and for electricity transmission projects.
• $200 million to the Department of Defense for testing and deployment of renewable energy technologies

It is estimated that, for every $1 billion of federal investment in renewable energy, approximately 12,100 jobs are created.   Additionally, the Center for American Progress estimates that In general, approximately 5 full-time component manufacturing jobs are created for every $1 million of investment in renewable energy systems. A total federal investment of almost $13 billion in renewable energy would create 156,000 direct jobs in systems installation and component manufacturing.

III. Smart Grid

The Senate version of the Recovery Act invests $11 billion in smart-grid related activities, including work to modernize the electric grid.  For every $1 million invested in smart grid installation, 5.2 direct utility jobs are created. Therefore, an $11 billion investment in smart grid demonstration projects would create or retain a total of 57,200 direct jobs for utility workers.

IV.  Carbon Capture and Sequestration

The Senate version of the Recovery Act provides a total of $4.6 billion for fossil energy research and development, including $2 billion to construct a power plant using Carbon Capture and Sequestration, $1 billion for DOE Clean Coal Power Initiative and $1.6 billion for a competitive solicitation for projects that demonstrate carbon capture from industrial sources.

As an example, we can look at the FutureGen Carbon Capture and Sequestration demonstration project.  It is estimated that the FutureGen project will cost approximately $1.5 billion and create a total of more than 3,000 jobs, including 1,300 immediate direct jobs in construction, 510 jobs in operations, and 1,225 indirect jobs in manufacturing, transportation, and other sectors.   Once the technology is commercialized it will provide thousands more workers with construction and manufacturing jobs as they retrofit power plants across America.

A $4.6 billion investment in Carbon Capture and Sequestration, therefore, would create approximately 9,200 direct jobs, including 4000 construction jobs, 1,500 jobs in operations, and 3,800 jobs in manufacturing.

V.  Public Transit

The Senate version of the Recovery Act provides a total of over $11 million for ready-to-go public transit investments.  These investments include:

• $8.2 billion in grants to states for investments in public transportation
• $2 billion for grants for investments in high speed rail corridors.
• $250 million for grants to states for investments in intercity passenger rail.
• $850 million for capital grants to Amtrak
• $60 million for grants to states for the construction of ferry transportation systems

The Surface Transportation Policy Project estimates that, for every $1 billion in federal dollars spent on new public transportation projects, nearly 51,300 jobs are created, around 24 percent of which are direct jobs. An $11 billion investment in ready-to-go transit projects would create or retain more than 135,000 direct jobs.

VI.  Transportation Infrastructure

It is essential that stimulus infrastructure funds be used to support maintenance and repair of existing highways, bridges, and tunnels rather than being used for new construction. The Senate version of the Recovery Act makes number of significant investments in transportation infrastructure:

• $240 million to the Coast Guard for repair of bridges deemed hazardous.
• $500 million to secure high risk critical infrastructure such as dams, tunnels, and bridges.
• $27 billion is included for highway investments, particularly repair and maintenance projects. The vast majority of this funding will be distributed as grants using a formula set in current highway authorization law.
• $5.5 billion for competitive grants to state and local governments for transportation infrastructure investments.
• $800 million for repair and restoration of roads on park, forest, tribal and other public lands ($160 million to BLM, $60 million to US Fish and Wildlife Service, $180 million to the National Park Service, $280 million to NFS, $120 million to BIA)

The Federal Highway Administration estimates that every $1 billion in federal dollars spent on maintaining and repairing existing bridges and roads supports a total of 34,779 jobs, including 11,921 direct construction jobs and 22,858 indirect jobs. Additionally, the Surface Transportation Policy Project estimates that, for every $1 billion spent on federally-aided highway resurfacing projects, some 10,421 person-years of construction jobs are generated. With a total of $34 billion in fix-it-first transportation infrastructure investments, the Recovery Act will create over 405,000 direct jobs for highway construction workers and laborers.

VII. Advanced Battery Manufacturing

Both the Senate and House versions of the Recovery Act invest $2 billion in grant funding for the manufacturing of advanced batteries systems and components. A $2 billion investment in advanced battery manufacturing will create or retain an estimated 8,470 direct manufacturing jobs, as well as an additional 24,560 indirect jobs among suppliers and associated industries .

VII.  Alternative-fuel Vehicles

Finally, the Senate version of the Recovery Act provides over $1.6 billion to federal agencies, cities, and public transit authorities to purchase fuel-efficienct and alternative-fuel vehicles.

• $350 million for grants administered through the Clean Cities program of the Department for acquisition and alternative fuel or fuel-cell vehicles
• $200 million for grants to states to plan and deploy electrical infrastructure projects that encourage the use of plug-in electric drive vehicles and for near term large-scale electrification projects aimed at the transportation sector, including seaports.
• $600 million to replace older motor fleet vehicles owned by the Federal Government with alternative fuel automobiles that will save on fuel costs and reduce carbon emissions.
• $300 million to the Department of Defense to lease alternative-fuel vehicles and purchase batteries and fuel cells for vehicles
• $200 million for grants to public transit agencies for capital investments that will reduce the energy consumption or greenhouse gas emissions of their public transportation systems

A study by Cambridge Systematics estimates that a $10 billion transit capital investment results in approximately 47,000 direct jobs in durables manufacturing, as well as over 208,000 indirect jobs. A $1.6 billion investment in new clean-energy automobiles and transit vehicles, therefore, could create or retain up to 7,500 direct jobs in vehicle manufacturing.