The green jobs myth

Gary Kawano installs a new smart meter outside a home in Boulder, Colo.
Gary Kawano installs a new smart meter outside a home in Boulder, Colo. (David Zalubowski/associated Press)
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By Sunil Sharan
Friday, February 26, 2010

"Green jobs" have become a central underpinning of the Obama administration's rationale to promote clean energy. But how valid is the assumption that a "clean-energy" economy will generate enough jobs to mitigate today's high level of unemployment -- new jobless claims were up 22,000 this week -- and to meet the needs of future generations? A green economy would have to spout jobs in the millions to do both. The facts challenge the prevailing thinking among some policymakers and officials that green jobs are a principal reason for transforming the economy.

Let's consider just one clean-energy sector, the smart grid, for its job-creation potential. The Obama administration allocated a little more than $4 billion in funding from the American Recovery and Reinvestment Act to the smart grid, an unprecedented amount for a hitherto-neglected but critical piece of our national infrastructure. Much of this is to be spent installing close to 20 million "smart meters" over the next five years. Smart meters are digital versions of the spinning electric meters that are omnipresent nationwide. Whereas spinning meters have changed little in more than a century and must be read by workers, smart meters automatically transmit electricity consumption data to a utility. Virtually eliminating human intervention, smart meters promise more accurate measurement of electricity usage as well as increasingly efficient management of energy production resources.

Nearly 40 million smart meters have been deployed worldwide, mostly in Europe. Jobs created in this industry can be broadly classified into four categories: installation, manufacturing, research and development, and IT services.

First, installation: It typically takes a team of two certified electricians half an hour to replace the old, spinning meter. In one day, two people can install about 15 new meters, or about 5,000 in a year. Were a million smart meters to be installed in a year, 400 installation jobs would be created. It follows that the planned U.S. deployment of 20 million smart meters over five years, or 4 million per year, should create 1,600 installation jobs. Unless more meters are added to the annual deployment schedule, this workforce of 1,600 should cover installation needs for the next five years.

Although a surge of new digital meters will be produced, the manufacturing process is highly automated. And with much of it accomplished overseas, net creation in domestic manufacturing jobs is expected to be only in the hundreds. In R&D and IT services, high-paying white-collar jobs are on the horizon, but as with manufacturing, the number of jobs created is forecast to be in the hundreds or low thousands.

Now let's consider job losses. It takes one worker today roughly 15 minutes to read a single meter. So in a day, a meter reader can scan about 30 meters, or about 700 meters a month. Meters are typically read once a month, making it the base period to calculate meter-reading jobs. Reading a million meters every month engages about 1,400 personnel. In five years, 20 million manually read meters are expected to disappear, taking with them some 28,000 meter-reading jobs.

In other words, instead of creating jobs, smart metering will probably result in net job destruction. This should not be surprising because the main method of making the electrical grid "smart" is by automating its functions. Automation by definition obviates the need for people.

In other "clean-energy" sectors such as solar and wind energy, jobs are predicted to emerge in the same broad categories of installation, manufacturing, R&D and IT services, but the near-term expected levels of investment in and adoption of these renewable sources of energy mean that net job creation should top out in the tens of thousands, as opposed to the desired hundreds of thousands or more. Electric vehicles represent another promising green sector, but even if the vehicles were rolled out in substantive quantities, jobs would be created mainly in research and development and infrastructure support, and there, too, only in the hundreds or maybe even thousands. Manufacturing jobs would grow only incrementally since electric vehicle production will for the most part cannibalize that of gasoline-powered cars.

For the purpose of creating jobs, then, a "clean-energy economy" will not offer a panacea. This does not necessarily mean that America should not become green to alleviate climate change, to kick its addiction to foreign oil or to use energy sources more efficiently. But those who take great pains to tout the "job-creation potential" of the green space might just end up inducing labor pains all around.

The writer, a director of the Smart Grid Initiative at GE from 2008 to 2009, has worked in the clean-energy industry for a decade. The views expressed are his own. He can be reached at sunil_sharan@yahoo.com.


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