State

Gains in 'green' sector obscured

As the "oh" decade draws to an end, it is hard not to join those dubbing it the "uh-oh" years and say the best thing about them is that they are finally over. "Uh-oh" does make sense, as commentators opine, because it is the word one utters when the wheels come off your bike or things spin out of control.

There were certainly many events over the last 10 years when it felt like the world was falling apart — from Sept. 11 to Hurricane Katrina, from the Arctic ice melt to the global financial meltdown. Narrowly averting the second great depression, the U.S. economy is now growing in fits and starts, but unemployment remains at historic heights — especially here in California.

There are those who say "green" jobs will save the day, and those who say California's green policies have driven our state into the red. Having spent the last five years producing nonpartisan research about our economy and the impact of state policies, We are facing decisions that will affect us for decades to come.

The roots of the state's current economic woes are buried in a national housing and credit debacle that led to the stock market crash, but with a bigger housing bubble and more than your average number of housing- and finance-impacted jobs, our state has suffered more than most.

According to the most recent UCLA Anderson Forecast, the slow economic recovery path "reflects the lagged effects of the implosion of consumer balance sheets and is a result of the economy in transition from being an import- oriented/low-savings rate one to a more export and higher- savings oriented one." While our state green policies have not been the cause of the current economic crisis, they have much to do with our recovery.

Green jobs are not a panacea for our state's woes, but our research reveals that a structural transition is currently under way to a low-carbon, more efficient economy, with higher consumer savings, more manufacturing jobs and a potential for higher exports. For three decades, California has established first-in-the-nation energy efficiency and renewable energy standards and incentives that have created the market certainty needed to trigger capital investment, innovation and business generation.

Over the last decade, venture capital investment in clean technologies has poured into our state — California alone now captures more than half of the nation's total.

Moreover, California companies and universities are receiving a large share of new federal energy grants, which will continue to provide opportunities for the next 10 years and beyond. As a result, thousands of green companies have been launched in California, while existing businesses expanded to include new green services, with jobs across a range of industries. Today, California is a leader in total green technology patents including solar, wind and battery technologies. Patents are a precursor to the establishment of new start-up companies that will employ people.

New data published earlier this month by Next 10, a nonpartisan think-tank, show that the number of California green businesses has increased 45 percent and green jobs expanded by 36 percent from 1995 to 2008 while total jobs in California expanded only 13 percent. Ten of the 15 green industry segments grew at a rate three times the state as a whole. And from 2007 to 2008, when state employment fell 1 percent, green jobs continued to grow 5 percent. By 2008, there were more than 159,000 green jobs in California.

Now when contrasted with the total number of jobs, this number is certainly not large. However, it compares with some of the most powerful state economic drivers; biotechnology and software employ just 50,000 and 228,000 respectively. Most importantly, unlike information technology and biotechnology, green businesses are located in every region of the state. In fact, it was the Sacramento area that led the state in green job growth — 87 percent from 1995 to 2008. Even in rural areas with a smaller economic base, green jobs are growing faster than the overall economy. For example, the Sacramento Valley is a hot spot for biomass, with employment more than 50 times the state average.

Of particular interest is the trend in green manufacturing that bodes well for our export future. In 2008, manufacturing represented 21 percent of all green jobs — growing 19 percent since 1995 — while manufacturing employs only 11 percent of all jobs and has been declining steadily. If we are going to transition to a high-export economy, we need to give top priority to items we can manufacture and the world wants to buy.

China is spending $12 million every hour on clean technology investment. The Chinese recognize a multibillion- dollar global market opportunity when they see it. Energy is the largest industry, by revenue, in the world. It represents the next breakout technology sector. Clean energy technology will do for energy what IT has done for information and communications. Do we want to be dependent on China for this technology — or do we want to own and sell it?

Finally, one has to consider where we would be if we had not diverged from national energy consumption trends by instituting green standards more than three decades ago. California consumers and businesses have saved more than $56 billion as total energy consumption per capita has steadily declined — at the same time, the rest of the country's per capita energy consumption doubled. These standards protected consumers against volatile fossil fuel prices, and the money they saved helped to grow California's economy by 1.5 million new full-time jobs with $45 billion in payroll, according to a study by UC Berkeley.

California's ambitious green energy policies are the goose that continues to lay golden eggs. Now is the time for a renewed effort to secure California's place in the world's coming green technology revolution. The oh decade was a tough one, but we can recover. We just need to continue doing what we know works in order to ensure that the next decade does not become a much more dangerous "uh-oh" than the last.

Perry is founder of Next 10, a nonprofit think tank that focuses on environment and economic issues in California.

THE SACRAMENTO BEE

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