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If we choose to run a business-as-usual investment and spending pattern over the next 30 years, yes, the U.S. economy may support 200 million jobs. . . but only for now! [1] And the reason only for now? The evidence suggests the growing burden of climate change, growing problems with water quality and availability, and a slow erosion of our economy-wide productivity may weaken the scale of current job availability. They may actually constrain the development of new job opportunities even in the near future.
Given these circumstances, it is decidedly time we took a fresh look at the economics of job creation. And if we do so? Then we will find that investments in energy efficiency, clean renewable energy, other energy productivity upgrades, as well as decarbonization improvements can all create a larger and more sustainable number of jobs. We highlighted these critical ideas in a number of previous postings. See, for example, in March of this year when we asked Can We Imagine 2.8 Million New Jobs? 8.7 or 20 Million New Jobs? And in April we posed the question, Are We Running to Fail? Or Building our Future?
Given that context, I contributed to a new assessment, spearheaded by my long-time colleague, best-selling author, Jeremy Rifkin, which confirms both the imperative and the opportunity to upgrade the nation’s infrastructure. Among the collaborators who agree are Black & Veatch, an employee-owned engineering, procurement, and construction company (as they note, with a 100-year legacy of innovations in sustainable infrastructure), and the Chicago-based, award-winning high-performance design firm Adrian Smith + Gordon Gill Architecture.
Other important contributors are the well-known global research organization, World Resources Institute, and The Hydrogen Council, a global CEO-led initiative of leading companies with a united vision and long-term ambition to promote hydrogen as among the clean energy solutions for a better, more resilient future. The report is appropriately called, America 3.0 The Resilient Society: A Smart Third Industrial Revolution Infrastructure and the Recovery of the American economy. It was prepared for Senator Charles Schumer and the United States Senate.
As reported by Bloomberg News journalist Marc Champion, “Energy guru, Jeremy Rifkin, is beyond disappointed with the dwindling U.S. infrastructure plan.” And yet? America 3.0 offers a 242-page proposal that can reboot the nation’s productivity growth while meeting its climate targets. In fact, Senator Schumer said in a written response to questions, the blueprint “underscores the need to pass big, bold solutions to address climate change through investments in our infrastructure.” In short, the team’s blueprint highlights the potential for a 20-year, $16 trillion investment strategy that would add 15 million to 22 million net jobs to the U.S. payroll, and 0.4 percentage points to annual economic growth [2].
If we retire old thinking, we can then reboot our economy to near zero greenhouse gas emissions even as we promote an average of 19 million new jobs within the United States.
In annual terms, over the period 2023 through 2042, the $16.4 trillion investment (expressed in 2020 dollars) is assumed to be spent evenly throughout each of the 20 years of the assessment. Although the main analysis reviews three different scenarios, the focus is on a mid-range scenario in which employment quickly increases by ~6 million jobs by 2023. By the year 2042 this grows to a total of 22.3 million new jobs. In effect, the resulting work that must be undertaken, together with other benefits which also boost employment, is estimated to drive an average net gain of 18.7 million new jobs over that 21-year period. Given the increased productivity of each job, total GDP in the year 2042 is projected to grow by $2.5 trillion (expressed here in constant 2012 dollars).
At the same time, both greenhouse gas emissions and the array of fossil fuel air pollutants are expected to approach near zero by 2042 under an America 3.0 strategy. That could result in a cumulative benefit of a further $3.2 trillion in avoided air pollution and health costs (expressed in 2020 dollars). Finally, the cumulative cost of avoided climate damages conservatively estimated might be on the order of $6.2 trillion, also through 2042 (with these last costs also reported in constant 2020 dollars). Indeed, these findings are consistent with many other assessments. Among the more recent studies, the House Select Committee on the Climate Crisis (2020), determined that by 2050, the cumulative estimated health and climate benefits might reach almost $8 trillion (in real 2018 dollars). In 2050 alone, the House Committee report noted, the estimated health and climate benefits would exceed $1 trillion.
The evidence is compelling. The US economy needs a reboot for the 21st century—one that simultaneously addresses its social, economic, and environmental health, as well as its long-term resilience. Depending on how quickly we act, the scale of private investment to drive the result, and the cost-effectiveness of the investment stimulus, the net job creation potential might grow from perhaps 100,000 net new jobs next year, rapidly accelerating to 6 million in two years, to as many as 20 million more jobs over the next 20 years or so.
How we understand and view the underlying economics of generating a more energy and resource productive economy that is robust, resilient, and sustainable is key to driving this change. In short, as business leaders and policymakers shift their focus away from a cost or spending problem, and if they begin to think instead of the reboot as an investment with very big and very important returns, there is a possibility of actually making this happen. There is neither a law of physics nor a purely economic constraint, which limits any possible outcome. Rather, there is an economic imperative and very real opportunity to do so, if we choose to make it happen.
References
[1] Bureau of Economic Analysis. 2021. SAINC4 Table of Personal Income and Employment by Major Component. See https://apps.bea.gov/iTable/iTable.cfm?reqid=70&step=1&acrdn=4. Accessed July 31, 2021. Note that unlike data from the Bureau of Labor Statistics which covers only paid employees, the BEA data reflects both full and part-time employees, the self-employed and proprietors.
[2] For a separate look at the economic assessment of the America 3.0 strategy, see Laitner, John A. “Skip.” 2021. “New Economic Opportunities and Millions of New Jobs.” A contribution to the report, America 3.0 The Resilient Society. Tucson, AZ: Economic and Human Dimensions Research Associates. https://theresourceimperative.com/wp-content/uploads/2021/08/America-3.0-Economic-Opportunities-and-Millions-of-Jobs-July-2021.pdf
[3] Most of the analytics of America 3.0 were completed in 2020, but numerous other studies since that time confirm our original assessment. The National Renewable Energy Laboratory, for example (see NREL 2021 below), suggests wind and solar electricity generation technologies might average $40 to $50 per megawatt-hour (MWh) while conventional coal, natural gas, and nuclear generation technologies might run $55 to $90/MWh. A representative set of studies that parallel our latest findings here include:
Goldman School. 2020. The 2035 Report: Plummeting Solar, Wind, and Battery Costs Can Accelerate our Clean Electricity Future. Berkeley, CA: University of California. https://www.2035report.com/electricity/
Griffith, Saul and Sam Calisch. 2020. “Mobilizing for a zero-carbon America: Jobs, jobs, jobs, and more jobs.” Rewiring America. https://www.rewiringamerica.org/jobs-report.
Jacobson, Mark Z. 2021. Zero Air Pollution and Zero Carbon from All Energy Without Blackouts at Low Cost in Utah. Palo Alto, CA: Stanford University. http://web.stanford.edu/group/efmh/jacobson/Articles/I/21-USStates-PDFs/21-WWS-Utah.pdf
Laitner, John A. “Skip”, Stephen O. Andersen, Gabrielle B. Dreyfus, and Kristen N. Taddonio. 2021. Investing in US Energy Efficiency and Infrastructure Creates More Nationally-Distributed Jobs while Saving Money and Protecting the Climate. Washington DC and Paris, France: The Institute for Governance & Sustainable Development (IGSD); and Tucson, AZ: Economic and Human Dimensions Research Associates. https://theresourceimperative.com/wp-content/uploads/2021/03/Energy-Efficiency-Upgrades-Protecting-the-Climate-Creating-Jobs.pdf
NREL 2021. Electricity Annual Technology Baseline. Golden, CO: National Renewable Energy Laboratory. https://atb.nrel.gov/electricity/2020/data.php
Weissman, Gideon and Emma Searson. 2021. We Have the Power Realizing clean, renewable energy’s potential to power America. Denver, CO: Environment America and Frontier Group. https://environmentamerica.org/sites/environment/files/We_Have_The_Power_2021-Environment_America_Frontier_Group.pdf
There is neither a law of physics nor economics that prevents us from quadrupling the productive use of energy and other resources. Rather, it is much more an issue of imagination and our political will to get it done.
– John A. “Skip” Laitner