From the Dispatch

Clean Energy Options: In the Wake of the Oil Spill, Energy Alternatives That Will Create Jobs

Fabiola Carrion — Mon, 19 Jul 2010 18:00:58 +0000

With less than 5 percent of the world’s population, the United States produces 25 percent of greenhouse gases, making it the second largest emitter in the world after China. The American public is well-aware of this issue; according to a Pew Research Center Poll, three-fourths of Americans described climate change as a serious problem. Since the oil spill in the Gulf of Mexico, support for off-shore drilling has waned substantially and more Americans want to look for clean energy policies that will avert more ecological disasters. Pew has also noted that the American public overwhelmingly supports (by 87 percent) renewable sources like wind and solar power.

Accompanying this environmental crisis is one of the worst economic periods in the nation's modern history. Overall unemployment rates are just below 10 percent and almost all states are dealing with budget shortfalls. Progressive state legislators, nevertheless, continue to take major steps to lessen our dependence on oil, create jobs that remain in this country, diversify our energy sources, and ensure that these sources are transmitted and distributed through a reliable electrical system.

States have taken an important – and often primary – role in setting the environmental and energy agenda in the United States. A review of state policies, federal policies based on state models, and federal policies where state leaders play a key role in implementation demonstrates that state actions will have reduced carbon dioxide emissions by approximately 536 million metric tons per year by 2020. As Progressive States Network has described in previous Stateside Dispatches, increasing the number of renewable energy systems reduces greenhouse gas emissions, relieves grid congestion, creates jobs, and provides their owners with surplus energy to sell back to the market.

In this Dispatch, PSN will examine clean energy options that contribute to a green economy, including evaluating the great strides that energy supply alternatives have created in the states that have enacted policies that promote them. We will explain how states have established Renewable Portfolio Standards and how these have created the demand for innovative investment, as well as how to promote new sources of renewable energy, including creative financial mechanisms, multi-state agreements, and the upgrade of an electrical grid that will better transmit energy from these intermittent sources. And for states looking for new job creation strategies, one key fact is that the production, installment and maintenance of renewable energy sources create sustainable jobs.

Federal Support for State Action: The 2009 American Recovery and Reinvestment Act (ARRA) assisted continued action by states with the inclusion of a wide array of provisions to spur clean energy generation and energy efficiency. A special package of $85 billion was allocated towards energy and transportation related spending, dedicating $21 billion toward incentives for wind, solar, and other renewable energy manufacturers. ARRA also provides more than $30 billion for direct spending on clean energy programs, including $11 billion to modernize the electricity grid, $2.5 billion for research into renewable energy, and $6 billion for state and local efforts to achieve energy efficiency. In addition to all of these national efforts, ARRA allocates $3.1 billion to the Department of Energy’s State Energy Program, which distributes funds to help state governments improve energy efficiency and expand the use of renewable energy in their states. According to Environment America, programs that have been funded by ARRA are expected to reduce emissions by approximately 10 million metric tons per year by 2020.

Resources
Environment America - America on the Move: State Leadership in the Fight Against Global Warming, and What it Means for the World
American Clean Energy and Security Act
Clean Energy Jobs and American Power Act

Table of Contents:

- Renewable Energy Sources in the States

- Renewable Portfolio Standards: One Key to Promoting Alternative Energy Production

- Putting a Price on Carbon: Regional Greenhouse Gas Emission Agreements

- Clean Energy Financing Options

- Networking the Green Economy: Creating Jobs and Improving the Transmission of Renewable Energy Sources

- Conclusion: A Greener Economy Drives Job Creation

Renewable Energy Sources in the States

Renewable energy sources (used interchangeably here as alternative energy sources) include solar, wind, geothermal, biofuels, geothermal, conventional hydroelectric, and biomass waste. The production of renewable energy largely depends on the geographic location of these resources, the availability and location of infrastructure, and demand for energy. As such, the two most common barriers for the development of alternative energy sources are (1) cost, and (2) lack of infrastructure.

Solar Energy: Pike Research forecasts that the United States will become the largest market for small solar installations by 2011, surpassing Germany, the best known solar energy producer in the world. Unlike fossil fuels, solar energy is clean, safe and everywhere. With higher demand, solar energy is costing less. Thanks to this rapid growth, it is believed that the US can reach the goal of obtaining 10 percent energy consumption from the sun by 2030. One of the drawbacks of solar energy, however, is that it is intermittent and consequently not always available to match demand. It is therefore imperative that we use technologies that can measure the various levels of power that solar energy can generate and transmit them according to on- and off-peak times.

Wind Energy: Wind energy has become the fastest growing source of electricity in the United States. In fact, in 2008, the United States surpassed Germany to reclaim the world’s leadership in installed wind power capacity. And in 2009, the wind industry increased by 39 percent. Now, almost two percent of our electricity is coming from wind turbines. Further, about half of components used in wind farms are now made in the US, compared with 25 percent in 2004, meaning that jobs in this sector have increased rapidly.

Thanks to our transition into wind generation, the US Department of Energy attributes approximately 17 million metric tons of the decline in carbon dioxide emissions during 2009 to expanded production of zero-emission electricity compared to 2008 levels. Environment America also concludes that the increase in renewable energy production since 2004 could be assumed to have reduced emissions in 2009 by roughly 44 million metric tons. Texas is currently the nation’s top wind producer, with a total of 9,410 megawatts, about three times more than the second-largest producer, Iowa. They are followed by California, Washington, and Minnesota.

On their own, solar and wind power can significantly reduce the amount of greenhouse gases we normally emit, and together, they can complement each other. Under the right conditions, solar generated energy is at its highest output during the hours when wind resources are least likely to be available.

Resources
Center for Social Inclusion - Solar Energy Generation at the Community Level: Briefing Paper Five of Black, Brown and Green
The New York Times - Wind Power Grows 39% for the Year
US Department of Energy - Short‐Term Energy Outlook Supplement: Understanding the Decline in Carbon Dioxide Emissions in 2009

Renewable Portfolio Standards: Key to Lessening our Dependence on Foreign Fossil Fuels

A renewable electricity standard (also known as renewable portfolio standard) requires utilities to develop renewable energy resources as part of their energy plan. In other words, an RES (or RPS) requires utilities to obtain a certain share of electricity they deliver to consumers from renewable resources. Twenty-nine states and the District of Columbia have adopted minimum standards requiring that a percentage of their electricity come from renewable energy. Five additional states (Florida, North Dakota, South Dakota, Utah, and Virginia) have set voluntary renewable portfolio standards.

Thanks to these standards, about three percent of power generated in the United States originates from renewable energy sources. The Department of Energy attributes state laws as the force behind this increase In concurrence, research by the North American Electricity Reliability Council shows that over 50 percent of the growth in renewable energy capacity occurred in states with mandatory Renewable Portfolio Standards.

These efforts will reduce global warming pollution by 79 million metric tons nationwide. Environment America calculates that 119 million metric tons will be reduced by 2020 thanks to RES policies and the reductions in electricity consumption that will result from other related policies.

Renewable Energy Standards Vary from State to State: The mix of resources eligible for credit varies greatly from one state to the next: some include “carve outs” for particular technologies (most often solar power), and some allow out-of-state resources to count on an equal basis with in-state resources through credit trading. Each state has designed its RES to account for a range of state-specific conditions and policy priorities. These include available wind, solar and other renewable energy potential in a state, reducing greenhouse gas emissions, mitigating other environmental externalities associated with fossil fuels, and lowering electricity costs to consumers. Other goals include diversifying the energy mix to protect against potential fuel interruptions and attracting wind and solar farms, product manufacturers, and research and development facilities to promote economic development and job creation.

The first renewable energy standard was adopted in Iowa in 1983. Massachusetts, Nevada, Connecticut, Maine, New Jersey and Wisconsin followed suit in the late 1990s, all enacting standards in the space of a few years. The number of RES increased even more in the 2000s, while many states that had been among the first to adopt the policy updated their legislation to enact more aggressive renewable energy goals and to ease implementation of the policy.

Even when states have already implemented renewable portfolio standards, they are still seeking to expand them. States have expanded compliance dates, raised compliance targets, or added carve-outs for specific technologies.

Oregon’s HB 3039, enacted into law in 2009 two years after the renewable portfolio standard was first signed, includes a solar photovoltaic standard within the state renewable portfolio standard. Oregon state legislators continue to seek to amend existing laws to increase RPS requirements over the years.
In 2002, Nevada enacted an aggressive renewable portfolio standard that required that 15 percent of all electricity generated be derived from renewable resources by 2013. In June 2005, Nevada raised the requirements of the RPS by 20 percent of sales by 2015.
Virginia also increased the state’s renewable portfolio standard to 15 percent during the 2009 legislative session.

We previously highlighted Colorado's leadership in clean energy legislation, including its recent law to expand its renewable energy standards. In one of the most far-reaching environmental initiatives in the country, HB 1001 requires 30 percent of large utilities' electricity to come from renewable energy sources by 2020. In detail, utilities must supply at least 12 percent of their retail electric sales from such sources from 2011 to 2014, 20 percent from 2015 to 2019, and 30 percent for 2020 and beyond. Three percent of this standard must be met by local solar power, leading to the construction and installation of 100,000 solar rooftops, panels, and turbines.

The Undeniable Success of a Renewable Energy Standard: Seventy percent of the fastest growing energy supply -- wind power -- was generated in the US thanks to a renewable energy standard. Between 2004 and 2009, state mandates for renewable energy have averted the release of approximately 44 million metric tons of carbon dioxide pollution in 2009. By requiring utilities to invest in renewable energy, states have established policies that have leveled the playing field for clean energy sources to compete with traditional fossil fuel.

Experts project that the manufacturing renewable sector has the potential to employ many more Americans in green jobs. Of the 18 states that have both renewable portfolio and energy efficiency standards in place, 11 states (61 percent) had more jobs in the clean energy economy than the national average. Similarly, in 12 of those 18 states, clean energy jobs made up a larger share of all jobs when compared to the US average.

Resources
Progressive States Network - Renewable Portfolio Standards (RPS) Advance in the States
Center on Wisconsin Strategy, the Workforce Alliance, the Apollo Alliance - Greener Pathways: Jobs and Workforce Development in the Clean Energy Economy
Stateline - The Rush to Renewables
Center for Social Inclusion - Solar Energy Generation at the Community Level: Briefing Paper Five of Black, Brown and Green
Environment America - America on the Move: State Leadership in the Fight Against Global Warming, and What it Means for the World
Progressive States Network - Colorado Leads Clean Energy Reform
Environment Maryland - Building a Solar Future: Repowering America's Homes, Businesses, and Industry with Solar Energy
Apollo Alliance - As Oil Spill Tragedy Continues, Clean Energy Progress in Missouri and Georgia Points to Hope for the Future
Renewable Energy World - Where the Wind Blows and Sun Shines: A comparative analysis of state renewable energy standards

Putting a Price on Carbon: Regional Greenhouse Gas Emission Agreements

In addition to complying with their own statewide portfolio, twenty-three states are participating in three major regional initiatives seeking to increase renewable energy generation and reduce carbon pollution from power plants that cause global warming. The most famous of these agreements is the Regional Greenhouse Gas Initiative or RGGI, composed of 10 Northeastern states: New York, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, and Rhode Island.

RGGI's 2002 Working Group proposed to keep emissions flat from 2009 to 2015, and then begin to cut the cap by 2.5 percent each following year. By 2018, emissions are expected to be reduced by 10 percent from the program's start date. RGGI holds an auction where the member states sell credits for carbon emissions. The buyers are electric utilities who purchase credits either to be able to emit carbon dioxide or to re-sell those credits to other utilities. Under this cap-and-trade regime, each auction raises on average $80.5 million and in total the auctions have raised $663 million. The money raised in these auctions is supposed to be directed towards projects that promote energy efficiency.

Although some states have used some of the RGGI funds to fill in the gaps of their state's budget, the RGGI still continues to create job opportunities for workers who conduct energy audits and install home weatherization measures. For example, the Center for Ecological Technology, a company that conducts RGGI-funded efficiency efficiency work on behalf of electric utilities has doubled its workforce - from 50 to 100 full-time employees. This increase has also spearheaded the creation of new positions in the IT and customer service departments. Furthermore, thanks to RGGI, carbon dioxide emissions from power plants are below the cap they set. Along with RGGI, the Western Climate Initiative (WCI) has been created to reduce emissions across the region by 15 percent below 2005 levels by 2020. Seven US states (Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington) and four Canadian provinces are part of WCI; the program, to be fully implemented by 2015, will cover close to 90 percent of emissions from the states' and provinces' territories. Also in the Midwest, six US states (Iowa, Illinois, Kansas, Michigan, Minnesota, and Wisconsin) and a Canadian province have joined to form the Midwest Greenhouse Gas Accord in order to reduce their emissions. MGGA's Advisory Group recently published its final recommendations, setting an emissions reduction target of 20 percent below 2005 levels by 2020.

Altogether, 23 states, accounting for half of the US population, are involved in greenhouse gas reduction accords.

Other Ways to Put a Price on Carbon: The most straightforward, and many would argue transparent, method to curtail carbon emissions might be to precisely pay for producing them. Instituting a tax provides the certainty of compliance, and has been successfully implemented in several countries, including Norway, Sweden and Germany. Carbon tax legislation has been introduced in US cities like Portland, Oregon and Boulder and Aspen in Colorado. According to the Oregon plan, builders that do not construct an energy efficient home must pay a fee. By the same token, the plan gives developers cash rewards if they save at least 45 percent more energy than the Oregon building code would require. The Boulder plan charges on the number of kilo-watt hours used, directing the profits to renewable energy and energy efficiency programs. The idea of taxing for carbon emissions has received a lot of support from environmental and labor activists, and even from Exxon CEO Rex Tillerson.

Please click image above to view a full chart of state Mandatory Renewable Energy Standards for 2010 from RenewableEnergyWorld.com.

Resources
Stateline - The RGGI raid: how cap-and-trade revenues went to fix state budgets
Progressive States Network - Bold Plan for Carbon Tax Introduced in Portland, OR
Environmental Protection - First RGGI 2010 Auction Yields $87.9 M for Member States
Regional Greenhouse Gas Initiative
Western Climate Initiative
Midwestern Greenhouse Gas Reduction Accord

Renewable Energy Financing Options

Through public bonds, pension funds, state-managed investment pools, and by leveraging federal dollars, states can direct investment dollars into alternative energy production. These financial incentives are being applied over a long period of time to establish consistent and efficient programs and create a stable market.

Federal and State Funding: Federal monies, principally through the ARRA, are being directed towards bonds that enable local and states to finance renewable energy projects. The US Department of Agriculture, for instance, operates a loan guarantee program for agricultural adoption of renewable energy. States are taking full advantage of the federal government's support. Thirty-two of them have combined federal and state funding to provide residential, commercial, and industrial loan financing for the purchase of renewable energy. The following examples paint a good picture on what states are doing with government funding:

In Colorado, SB 31 was enacted in 2009 to create the Clean Technology Discovery Evaluation grant program for the purpose of improving and expanding the development of new clean technology discoveries at higher education research institutions. The state will also allocate $2 million in grants towards renewable from 2009 ARRA funding through the Governor's Energy Office.
Montana also provides direct funding for renewable energy development through grant and loan programs that typically target generation at the scale of residential and commercial buildings. It offers a grant program to subsidize small-scale renewable installations via a state-mandated system benefits fund maintained by the state’s largest private utility. Montana’s revolving fund loans up to $40,000 per renewable project.

Municipal Financing and Property Assessed Clean Energy (PACE): A model called Property-Assessed Clean Energy (PACE) enables municipalities to use their ability to obtain financing at low interest rates to pay for the upfront cost of installing renewable energy parts in businesses and homes. The financing is recouped through a special assessment on the property owner’s taxes, or in certain cases, their utility bill. In most programs, property owners pay back the costs over a period of 20 years. The tax remains with the property; if a property owner sells the property during the period of financing, the responsibility to pay back is transferred to the new owner. Hence, PACE absolves the homeowner of the risk that they will move out before they receive the full benefits of the system. Two barriers to making energy upgrades are therefore eliminated: (1) the up-front costs, and (2) the question of who pays for ongoing costs for upgrades when properties are sold.

The White House has estimated that if only 15 percent of residential property owners in the US took advantage of PACE related programs, the resulting emissions reductions would contribute to four percent of the savings needed for the US to reach 1990 emissions by 2020. In addition to reducing greenhouse gas emissions, PACE programs promise to lower energy bills for consumers and create jobs in home weatherization and renewable energy installation. So far, PACE programs have been authorized in 23 states.

Source: Pew Center on Global Climate Change

California enacted AB 811 in 2008 to allow cities and counties to offer PACE financing. Under the California program, property owners seeking funding for energy efficiency improvements must have a clear property title and be current on property taxes and mortgages. Financing may originate from bonds, local government funds, and third-party lenders. Under Minnesota law, loan amounts may not exceed 10 percent of the assessed value of the property and may include costs related to the required energy audit or feasibility study, equipment and labor costs, and performance verification. A recently enacted New York law (AB 40004A) allows counties, towns, cities and villages to offer sustainable energy loan programs that can pay for energy audits, cost-effective, permanent energy efficiency improvements, renewable energy feasibility studies, and the installation of renewable energy systems. The local program determines the sectors eligible for financing, and qualification for the loan is contingent on energy audits or renewable energy feasibility studies that meet New York State Energy Research and Development Authority (NYSERDA) or equally stringent standards. Energy efficiency improvements must meet cost-effectiveness criteria as established by NYSERDA. Land-secured financing districts for PACE programs have been created in Florida, Georgia (HB 1388-2010), Hawaii, Louisiana (SB 224-2009), Nevada, Vermont (HB 446-2009), and New Mexico (SB 647-2009).

Also last year, Oregon established the Energy Efficiency and Sustainable Technology loan program to provide state loans for residential and commercial energy efficiency and renewable energy projects. The 100 percent upfront long term, low-interest loans can be paid back on the utility bill. The program is financed through state bonding and private loans.

This year, Maine enacted LD 1717 to implement a loan program through a local ordinance that provides financing for property owners who want to put clean energy improvements in their homes. This legislation is unique in two ways: (1) municipalities will be able to use federal grants or any other funds available for the purpose of funding PACE programs; and (2) PACE assessments will be considered subordinate liens, secondary to mortgages. Further more, Efficiency Maine Trust was directed to promulgate rules for Maine's PACE program, including eligible efficiency improvements and renewable energy installations, standards for underwriting requirements, and truth in lending provisions which are to guide the consumer disclosure that must be included in PACE agreements.

Another eight states have introduced PACE bills in 2010 in their legislatures, including Hawaii (SB 2865 and HB 2643), Missouri (HB 2178, HB 2298 and SB 1037), Michigan (HB 5640), New Jersey (AB 2500), Illinois (SB 2505).

Georgia also approved legislation this year (HB 1388) to help residential and commercial property owners make energy efficiency and renewable energy improvements to their properties through voluntary property assessments.

PACE Programs Under Challenge: Recently, Fannie Mae and Freddie Mac asserted that because PACE programs' liens take priority over existing mortgages, this poses a risk to lenders and secondary market entities, as well as alter valuations for mortgage-backed securities. Consequently, the Federal Housing Finance Agency (FHFA) and the US Treasury Department have instructed banks to place additional restrictions on home loans to borrowers in jurisdictions that have PACE programs. In response, cities and states have taken action to save PACE.

For instance, the state of California has filed a complaint against Fannie Mae and Freddie Mack for blocking PACE programs; California Attorney General Jerry Brown argues that PACE funding is an assessment, not a loan, and that Fannie and Freddie have long accepted local governments' use of assessments in California to finance improvements that serve a public purpose. The city of Babylon in New York will likely follow California's action; its leaders joined more than 50 local workers at a rally last Tuesday to announce the town's plans to sue the FHFA. As these leaders note, PACE programs like California's actually work to reduce the risk of default by requiring a clean record on property taxes and mortgages. In New York, stringent standards have to be met in order to obtain financing under PACE. And in Maine, the Efficiency Maine Trust is creating standards for underwriting requirements and truth in lending provisions to guide consumer disclosure. Further, more federal money is being allocated to fund and guarantee the success of PACE programs. Last year, the US Department of Energy announced funding for PACE projects and is apportioning $80 million as upfront capital for PACE-type programs. PACE programs can also apply for competitive grants under the Energy Efficiency Conservation Block Grant Program.

Feed-In-Tariffs: One other funding source for renewable energy is where a company that installs and maintains a renewable source device receives a Power Purchase Agreement or Feed-In-Tariff with a customer. Here, the customer pays no upfront costs while the energy provider pays for the entire project including installation, maintenance, and trouble shooting. Also, this relationship guarantees that the installation can take place quickly, the service is predictable, and the rate is at parity with other retail electricity rates. Feed-in tariffs have played a role in the development of Germany’s world-leading solar power industry. In the United States, feed-in-tariffs have been adopted in Vermont and Washington.

The Vermont feed-in-tariff law was designed to ensure that homeowners or businesses receive the same return on equity for their investment. Vermont's legislation bases the tariffs on the cost of generation plus a reasonable profit. Vermont's feed-in tariff program contains the key elements of the successful policies found in Europe: tariffs are differentiated by technology and size; tariffs are set on the cost of generation plus profit; and profit is set by a reasonable rate of return, loan contracts terms, and a regular program review.

Rebate Programs: By providing cash incentives, more homeowners and businesses will install renewable devices and technologies in their buildings. States have taken note of this efficient strategy. Twenty-three of them and the District of Columbia offer rebate programs to promote the installation of renewable energy systems and energy efficiency measures such as solar water heating and photovoltaic systems. We highlight a few of them:

California's Million Solar Roofs Initiative provides grants to homeowners who install solar systems, with the amount of the rebate declining over time to reflect the anticipated declining cost of solar power.

Thanks to ARRA funding, Minnesota offers rebates of $100 to $250 on refrigerators, dishwashers, and clothes washers, and New Jersey residents will be able to receive rebates worth $25 to $ 100 on the purchase of those same items. Similar rebate programs for home appliances exist in Louisiana, North Carolina, and South Carolina.

Net Metering: Net metering allows customers who generate electricity through renewable sources to receive credit for electricity they put on the grid. In other words, net metering customers buy electricity when they need it, use the electricity they produce, and sell any excess to the utility. This provides an incentive for consumers to invest in small renewable generation systems. More than 40 states and the District of Columbia have adopted net metering laws.

Last year, Nebraska's LB 436 was enacted to provide net metering for electricity. It includes one to one credit for energy generated up to the amount used, protection against additional utility charges and fees, protection against unnecessary safety or performance standards, and prohibition of additional liability insurance.
Newly enacted AB 510 in California raises the cap set on the number of homes and businesses that can take advantage of net energy metering. Current law caps the amount of electricity that can be generated under the net metering program to 2.5 percent of a utility’s peak demand. AB 510 raises the net metering cap to 5 percent and will help meet projected demands received under the California Solar Initiative program. The law further allows the rate-making authority to compensate net energy producers for the value of the electricity itself, and the value of the renewable attributes of the electricity. Moreover, net energy producers will receive a bonus if the renewable attributes of the energy production add indefinite or unforeseen benefits. Environmental advocates claim that the law, which was introduced last year but died in committee, finally balances the interests of utilities, customer-generators, and non-participating customers. This is a great win for the more than 50,000 customers, including schools, community colleges, cities and counties and homeowners in California who participate in net metering.
New Jersey has one of the most comprehensive net metering and interconnection laws in the United States. It includes a wide array of renewable sources: solar technologies, wind, fuel cells, geothermal technologies, wave or tidal action, and methane gas from landfills or biomass facilities. This program has been praised for standardizing the interconnection procedures for residential and small-commercial customers, who pay at the end of the each year for every excess Kwh they produce.

Protecting the Ability to Install Renewable Energy Sources: States are also enacting rules to protect access to renewable energy. Last year, Virginia enacted SB 320, which voids covenants that restrict installation of use of any solar energy collection device on private property.

Resources
Progressive States Network - Colorado Leads Clean Energy Reform
The Pew Charitable Trusts - The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America
The Apollo Alliance - As Oil Spill Tragedy Continues, Clean Energy Progress in Missouri and Georgia Points to Hope for the Future
The White House - Policy Framework for PACE Financing Programs
Environment America – America on the Move
Center for Social Inclusion - Solar Energy Generation at the Community Level: Briefing Paper Five of Black, Brown and Green
Progressive States Network - Green Buildings: Multi-State Agenda Campaign Update
Apollo Alliance - Efforts Underway to Save Property Assessed Clean Energy (PACE) Programs
The White House - Policy Framework for PACE Financing Programs
Center on Wisconsin Strategy, the Workforce Alliance, the Apollo Alliance - Greener Pathways: Jobs and Workforce Development in the Clean Energy Economy
Environment Maryland - Building a Solar Future: Repowering America's Homes, Businesses, and Industry with Solar Energy

Networking the Green Economy: Creating Jobs and Improving the Transmission of Renewable Energy Sources

Renewable sources present unique and serious transmission challenges due to their intermittency and the remoteness of the site of generation. For renewable energy production to maintain its current rate of growth, it must overcome significant obstacles, including the lack of capacity and connectivity in the regional electrical infrastructure. The only way that we can fully maximize the use of renewable energy sources is by upgrading the current electrical system. With an upgraded, or smart, grid, renewable energy production overcomes significant obstacles including lack of capacity and connectivity. Improving the electric grid will expand the ability of renewable energy and energy conservation to meet the nation’s energy needs.

The smart grid is an aggregate term that refers to a distribution system that allows the flow of information to the consumer and to the utility company through thermostats, Web based programs, appliances, and other devices. Establishing smart grids at the transmission level will enable digital controls and high-voltage transmission lines to transport energy from renewable energy sources. A smart grid improves the management of the distribution and consumption of energy that results in the integration of various sources of renewable energy into our power system. In this manner, it facilitates more efficient energy use and reduces the amount of emissions from harmful greenhouse gases.

The American Recovery and Reinvestment Act apportioned $4.5 billion on smart grid demonstration projects. Beyond this, $11 billion will be invested in general improvements to the grid; another important step towards a grid that will allow for more flexible and efficient generation and use of power.

Last year, California enacted SB 17/AB 238 to declare that new and modified electric transmission facilities, including the employment of smart grid technologies, are necessary to facilitate the state's energy efficiency goals and renewable portfolio transmission facilities. This is the first smart grid state law in the country, as it promotes the installation of smart meters, data networks and other infrastructure for a cleaner, more efficient electrical grid by — by July 1, 2010. Under this law, the Public Utility Commission is required to report on a yearly basis, starting on Jan. 1, 2011, to the governor and legislature on the progress being made in improvements to the electrical grid.
Vermont and Maryland have each provided funding to study smart metering and/or smart grids, as a means of reducing energy use.
The Pacific Northwest National Laboratory (PNNL) has teamed with utilities in the states of Washington and Oregon to test new energy technologies designed to improve efficiency and reliability, while at the same time, increasing consumer choice and control.
In North Carolina, 100 Lafayetteville residents and businesses cut energy use an average of 20 percent during a six-month pilot last year. The customers were equipped with software that enabled them to check their energy use from the Internet.

By using applications and devices supported by digital infrastructure, such as broadband and information communication technology, we can build a green economy:continuing our economic growth and creating new jobs while decreasing our energy consumption and greenhouse gas emissions.

Resources
Progressive States Network - Networking the Green Economy: How Broadband and Related Technologies Can Build a Green Economic Future
Progressive States Network - Green Jobs Programs to Drive Economic Recovery
The Apollo Alliance - Make It in America: The Apollo Green Manufacturing Action Plan
Progressive States Network - Networking the Green Economy: How Broadband and Related Technologies Can Build a Green Economic Future

Conclusion: A Greener Economy Drives Job Creation

Nearly six out of ten jobs in the green economy fall specifically in the area of energy generation, which includes jobs responsible for producing clean forms of energy such as wind, solar and geothermal. Jobs responsible for solar power generation dominate this subgroup: 62.5 percent of all energy generation jobs in 2007 were in the solar industry. Jobs in wind power were second overall, making up 9.7 percent of energy generation jobs in 2007, but they grew more rapidly – by 23.5 percent between 1998 and 2007, compared to 19.1 percent growth for solar power jobs during the same period. Since the ARRA was enacted, an estimated 150,000 jobs were saved or created in the construction of solar panels and wind turbines.

Industry sector experts have cited state policies such as renewable portfolio standards as important factors in driving investments, attracting companies and growing new industries and jobs because they help create market demand for clean energy technologies, products, and services. However, without key policies such as renewable electricity standards, the market will be slow to grow. The Union of Concerned Scientists agree; they have estimated that a national RPS requiring 20% in renewable energy sources by 2020 could generate 355,000 jobs across the country. Also by this time, the domestic market for renewable energy supplies is likely to reach $226 billion annually.

Potential Federal Action: While states are still making progress on their own, a stronger federal partner is needed for national change. Last year, US Representatives introduced the American Clean Energy and Security Act, which requires that 20 percent of the country’s electricity be generated by renewable energy by 2020. This year, the Clean Energy Jobs and American Power Act (also known as the APA) was unveiled in the Senate. The APA includes: a cap and price on greenhouse gas emissions, similar to a cap-and-dividend already considered at the state-level, a target for reducing those emissions to 17 percent below 2005 levels by 2020 and 80 percent below 2005 levels by 2050, and a fee for “carbon leakage” of imports in order to level the playing field between American manufacturers and foreign competitors that emit carbon. Not included in the Senate bill is a national renewable portfolio standard. Although the APA offers support for renewable energy sources, a federal mandate is needed in order to push the remaining 20 states to seriously commit to the use of alternative sources of energy. In the absence of renewable energy standards in the American Power Act, states can and must continue to fill in gap by continuing to mandate the use of renewable energy.

State Policy Program: Whatever the feds ultimately do, states are taking action to ensure that the future is bright -- literally and metaphorically -- for alternative energy production in the United States. With more than half of states having enacted renewable portfolio standards we are well under way to achieving our environmental and economic goals, but much more needs to be done. States should continue to build on their track record of innovation in clean energy policy by continuing to enact and renew their renewable energy goals. Specifically, as this Dispatch has demonstrated, states should:

Enact RPS standards, and for those that have enacted them, to find ways to set higher goals that can be accomplished and are meaningful;
Provide financial support -- in the form of bonds, rebates, or other innovative financing mechanisms -- to accelerate the deployment of more renewable energy technologies;
Integrate renewable sources into an upgraded, “smart” grid, and;
Create good, sustainable green jobs that will enable those employees to develop, manufacture, deploy, and maintain the various elements of renewable sources and smart grid infrastructure.

The key is not only promoting renewable energy supplies, but also of creating actual incentives that spur their use. These incentives come in the form of mandating goals for renewable use, as was the case in Colorado, and placing financial incentives for clean energy investment. As more and more renewables are manufactured, installed and used, it is imperative that our electrical grid also undergoes a drastic reformation.

Resources
Environment America - America on the Move
Headwaters Economics - Clean Energy Leadership in the Rockies: Competitive Positioning in the Emerging Green Economy
Pew Research Center Publications - An Increase in GOP Doubt About Global Warming Deepens Partisan Divide
The Pew Charitable Trusts - The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America
Center for Social Inclusion - Solar Energy Generation at the Community Level: Briefing Paper Five of Black, Brown and Green

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Saving Jobs: More Federal Action Needed on State Fiscal Relief

Altaf Rahamatulla — Thu, 01 Apr 2010 17:56:44 +0000

Last month, President Barack Obama signed the $17.5 billion Hiring Incentives to Restore Employment (HIRE) Act into law to assist small businesses and spur job creation. This was definitely a start, but the gravity of the current crisis demands much bolder and quicker action. Congress needs to enact further state fiscal relief to support jobs and avoid the massive layoffs that threaten social and economic vitality in the states.

Federal action is still needed to provide support for state Medicaid programs by extending the increased medical assistance percentages (FMAP), boost funding for educational programs, invest in infrastructure projects and public transportation, support the long-term unemployed to sustain them until they reenter the workforce, and provide direct and comprehensive financial assistance to state and local governments to perform the vital services needed to maintain growth in local communities.

In the past few months, Congress has started to take action:

Jobs for Main Street Act (H.R. 2847): On December 16, 2009, the House passed this bill, which would redirect money from the Wall Street bailout to fund environmental and infrastructure projects, extend FMAP, support education jobs, and provide small business loans. The bill would additionally provide funding to public safety and law enforcement jobs, address public housing needs, and invest in clean and safe water projects.
American Workers, State, and Business Relief Act of 2010 (H.R.4213): On March 10, the Senate passed this piece of legislation to provide state fiscal relief through FMAP increases, provide support for the long-term unemployed though Unemployment Insurance and COBRA extensions through the end of December 2010, reverse a scheduled 21 percent payment cut for doctors who provide services through Medicare, and extend several tax breaks, such as the research and development tax credit. The bill also raises almost $40 billion in new revenue by reducing a biofuel tax break utilized by the paper industry and strengthening tax shelter rules.
The Local Jobs for America Act (H.R. 4812): Rep. George Miller (D-CA) introduced this bill last month to provide $75 billion to local communities to hire needed staff over two years, funding for 50,000 private-sector training jobs, $23 billion to support education and teaching positions, and $1.18 billion for law enforcement. Overall, the legislation would appropriate $100 billion to job creation efforts. Within a month of its introduction, the bill already has 105 co-sponsors.

Individuals and advocacy organizations should press their Congressional leaders on the need for action. If you are a state or local lawmaker, please sign onto this letter calling on the President and Congress to enact a comprehensive jobs plan, including relief to states and local governments to foster economic growth and create and maintain jobs.

Resources:
Campaign for America's Future - Major New Jobs Bill Gains 105 Co-Sponsoring
Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery
Center on Budget and Policy Priorities - An Update on State Budget Cuts
Economic Policy Institute - Dire states--State and Local Budget Relief Needed
Economic Policy Institute - Jobs Crisis Fact Sheet
Progressive States Network - Take Action: Additional Federal Job Creation and State Fiscal Relief

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Job Creation and State Fiscal Relief Resolutions Moving in the States

Altaf Rahamatulla — Thu, 11 Feb 2010 17:12:03 +0000

In the State of the Union speech, President Barack Obama stated:

"The devastation remains. One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. And for those who'd already known poverty, life has become that much harder... That is why jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill."

With the fiscal crisis forcing states to layoff hundreds of thousands of teachers, nurses and police officers, the need for more federal job creation and state fiscal relief support is clear. And there is substantial momentum building around this issue in the states.

New Mexico Rep. Eleanor Chavez introduced HJM39, a joint memorial calling on the federal government to pass a jobs creation plan. The memorial passed the House of Representatives last Saturday and will now be considered by the state Senate.
Similar resolutions are likely to be introduced in Illinois, Nevada and Vermont. Members of the Tax Fairness Organizing Collaborative (TFOC), including New Yorkers for Fiscal Fairness (NYFF) and the Progressive Leadership Alliance of Nevada (PLAN), are working with lawmakers in their states to highlight the acute need for increased federal support.
Along with Maine Senate President Libby Mitchell, House Speaker Hannah Pingree held a press conference this past Tuesday to garner awareness of Maine's economic and fiscal situation and highlight the need for another round of federal aid.

If you are a lawmaker interested in introducing a resolution requesting the federal government to move a jobs bill, PSN can assist you in that effort. Please contact us at jobcreation@progressivestates.org for support. General resolution language can be found here.

Additionally, over one hundred legislators from thirty-one states have signed on to Progressive States Network's letter calling on the President and Congress to move swiftly on job creation and state fiscal relief. State lawmakers can sign onto the letter here, while citizens and advocates can use this online tool to contact their state legislators and ask them to add their signature.

The Need and Public Support for Action: As we discussed in January, the passage of the American Recovery and Reinvestment Act (ARRA) in early 2009 was critical in preventing a full collapse of the national economy and helping states address huge budget gaps. The Congressional Budget Office (CBO) estimates that the ARRA created or maintained 600,000 to 1.6 million jobs as of September 2009 and found it decreased the unemployment rate by almost one percentage point. Unfortunately, millions of Americans are still out of work and states are struggling to find ways to deal with enormous deficits and plummeting revenue. Projected governors' budgets could lead to layoffs amounting to an additional 900,000 jobs lost in the economy.

There is extensive bipartisan support for federal funding for job creation and aid to states. Winthrop University conducted a poll in late 2009 and found that 71.6 percent of respondents favor funding for jobs (94.5 percent identify as Democrats, 53.4 percent Republican, 68.9 percent Independent) and 62.7 percent support "giving aid to states in serious financial trouble" (80.6 percent Democrat, 50.9 percent Republican, 63.6 percent Independent).

As the U.S. Senate moves on a jobs package within the next few weeks, timing is crucial. State lawmakers must send a strong message to Washington that the country needs jobs and states need relief.

Resources:
Center on Budget and Policy Priorities - Additional Federal Fiscal Relief Needed to Help States Address Recession's Impact
Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery
Stateline.org - Economist Mark Zandi: On stimulus, jobs, state finances, inflation and the year ahead
Moody's Analytics - The Case for Another Round of Federal Aid to State & Local Govt
WhiteHouse.Gov - Remarks by the President of the United States in State of the Union Address
Winthrop University - Winthrop Poll Results - November 2009 Findings
Center on Budget and Policy Priorities - Governors’ New Budgets Indicate Loss of Many Jobs if Federal Aid Expires

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State Job Creation Strategies Part II: Supporting Innovation, Industrial Clusters and Green Job Creation

Nathan Newman — Mon, 25 Jan 2010 19:22:36 +0000

As we described last week in State Job Creation Strategies Part I: Finding the Money and Investing in Human Capital and Physical Infrastructure, competing globally for jobs starts with policy makers instituting fundamental investments in education, human capital and physical infrastructure that make their state a productive environment for economic innovation.

The next step, as this Dispatch will describe, is helping the private sector leverage opportunities for job creation and technological innovation. Too often, some state leaders treat economic development as merely a bidding war between states to give away the most tax breaks or economic subsidies to big corporate bidders. Not only do most studies show such tax-giveaway approaches to be ineffective -- fundamentals like labor productivity and physical infrastructure are more critical in site selection for most global businesses -- but they end up devoting most state resources to a few large businesses while ignoring investments in start-ups and smaller homegrown firms that are the heart of long-term local prosperity.

Instead, state policymakers should move away from a tax giveaway mentality towards an approach that step-by-step supports an ecology of local investment, technological innovation and mutually-interdependent industries that together encourage ongoing entrepreneurship and firm growth. Elements of such a strategy include:

State-backed venture capital institutions that can not only supply needed capital for start-up firms, but help leverage additional private investments to expand the capital available for innovative start-ups in a region.
Leverage technology transfer from universities and government labs to translate basic research into commercial products and the technical assistance that can launch firms builds on that innovation.
Nurture regional industry partnerships and industrial clusters where firms thrive together based on shared investments in the skills of the regional workforce and strategic support for specialized local firms.
Encourage green innovation that will yield a range of new jobs in the emerging green sector.

Each of these steps emphasizes building partnerships between government, business, community and labor institutions to make continual learning and innovation an integral part of regional economies.

Table of Contents:

- Job Creation Opportunities During a Recession

- State Venture Capital Funds

- Encourage Technology Transfer and Commercialization

- Strengthen Industry Partnerships & Clusters

- Clean Energy Industry Support

- Conclusion

Job Creation Opportunities During a Recession

While policymakers might despair of encouraging new job creation during a recession, the seeds of future innovation and growth are often sown during recessions, as entrepreneurs analyze the failures of the previous boom and launch new ventures.

In fact, well-over half of the Fortune 500 list of top companies and just under half of Inc. magazine's list of top small firms were founded during recessions or bear markets on the stock market, according to a 2009 Kauffman Foundation study. Unemployment often encourages people to found their own firms during recessions, so making sure they have the support to thrive is critical. New immigrants are an especially strong source of such job creation-- thirty-one percent of the engineering and technology companies founded from 1995 to 2005 had an immigrant as a key founder.

Innovation Economics versus Neoliberal Economics: Notably, innovation and entrepreneurship in states seems to have little to do with low taxes or weak regulatory protections for workers and consumers. While the same right-wing economic pundits who supported the bubble economy continue to promote the low tax, weak regulation line for state economic development, the reality is that innovation in states actually requires high state investments and engagement for success.

The Information Technology and Innovation Foundation compiles a State New Economy Index to measure how much states have moved towards generating high-value "knowledge jobs" likely to survive in global competition, built export-oriented manufacturing and services, sustained fast-growing "gazelle" firms and moved their people and firms into the digital economy with a high percentage of jobs in high-innovation technology sectors. States ranking high on the index included high revenue, high state-investment models such as Maryland, Washington, and Massachusetts, which generally had higher growth in state per-capita incomes between 2002 and 2006 than many supposed "low tax" states that often fail to create long-term high-value jobs.

Instead of chasing after "low road" employers looking for weak labor standards -- which such firms can find even more easily overseas -- long-term job creation in the United States is dependent on investing seriously in high-innovation environments.

Resources:
Kauffman Foundation - The Economic Future Just Happened
Information Technology and Innovation Foundation - 2008 State New Economy Index
Kauffman Foundation - Better, Faster, Cheaper: The New Bootstrap Job Creator"

State Venture Capital Funds

There is a critical role for states to take as funders of innovation, especially at the early stage of firm development when private sources of capital are especially reluctant to step up these days. The National Venture Capital Association reports that venture investing in early-stage businesses is down 71 percent over the last 12 months. This has created a funding “gap” that is preventing the growth of small businesses, and subsequently hurting job creation.

Fortuitously, states for the last decade or so have been creating a wide array of innovative state-backed venture capital funds and supporting early-stage "angel" investments to get firms off the ground, so states increasingly have the tools in place to promote investments in innovation from the earliest stages.

State Venture Funds: Instead of merely handing out tax credits or subsidies with no direct return to the taxpayers, states are increasingly making direct equity investments in local firms-- a tool that not only promises payback to taxpayers if firms become profitable, but also creates greater accountability for the public funds invested.

As of 2008, states had over $2.3 billion invested in state-supported venture capital funds -- see this state-by-state chart of various kinds of state funds, courtesy of the National Association of Seed and Venture Funds (NASVF) . A few examples:

Indiana Future Fund: The Indianapolis Star has described the Indiana Future Fund as "the life blood of 14 Indiana life sciences companies, and it continues to provide the foundation for Indiana's venture capital growth." The IFF helped bring in more than $160 million to Indiana start-ups from private venture capital firms across the country.
Start-Up Kentucky uses public funding to provide seed capital investments for high-tech start-ups in the state.

In Illinois, the Governor this year has proposed tools to help small businesses thrive, such as bolstering start-up and micro-businesses by creating Angel Investment Tax Credits and expanding venture capital funding for seed and early-stage firms.
Florida has set aside $250 million of its $110 billion pension fund for awards of between $5 million and $20 million to growing later-stage life-science and other tech companies. That money will come from the state-created Florida Growth Fund, a venture capital fund managed by Philadelphia private equity firm Hamilton Lane.

Supporting Angel Investments: Since many traditional venture capital firms now only invest in more established firms, start-up companies at the earliest steps of formation often have few options for finding capital. States increasingly are stepping up to support so-called "Angel capital" - the capital invested by (usually) wealthy individuals in a region’s businesses--as a key part of supporting entrepreneurship. States can help encourage networks for local investors to work together and jointly support start-ups in their states through "Angel Networks":

The Wisconsin Angel Network, part of the Wisconsin Technology Council, is funded for two years with $300,000 from the Wisconsin Departments of Commerce and Financial Institution and the Wisconsin Technology Council.
Washington: The WTC Angel Network was formed with a $250,000 grant from the United States Economic Development Administration that was matched by the Washington Technology Center (WTC).
Pennsylvania: The Pennsylvania Angel Network, a nonprofit organization, was begun with $350,000 from the Pennsylvania Department of Commerce and Economic Development to fund its first two years of operations.

Resources:
National Governors Association - State Strategies to Promote Angel Investment for Economic Growth
NASVF - U.S. State-Supported Venture Capital Funds

Encourage Technology Transfer and Commercialization

Government funding of basic research has been the wellspring for innovation for years, from the government's creation of the Internet, funding for life sciences at universities, to green technology in recent years.

Federal, state, university, and nonprofit investments in R&D play a crucial role in promoting innovation: for example, in 2006, 77 of the 88 U.S. companies that produced award-winning innovations were beneficiaries of federal funding.

While quite a bit of funding for innovation comes from the federal government, the Information Technology and Innovation Foundation report notes that "The challenge for...states is to continue to find ways to translate these inputs into commercial outputs in their states." They are making progress. Between 1991 and 2004, the number of patent applications filed by United States universities increased from 13.7 applications per institution to 57.8, licensing income increased from $1.96 million per university to $7.06 million, and new university-based start-ups increased from 212 in 1994 to 462 in 2004.

And state governments are increasingly seen as key partners for start-up firms looking to commercialize technology. With venture and angel investors becoming scarcer in the recession, Entrepreneur Magazine has spotlighted universities and government-backed business incubators as a key tool for start-up businesses to find help in getting investments.

Overcoming the "Valley of Death": In a recent report, Excell Partners, a seed-stage venture capital fund with ties to the University of Rochester, noted New York state fares well in attracting billions of federal research dollars for its universities. But the state can do more to capitalize on business opportunities that emerge from the research, by helping firms at the earliest level of development before they are generating revenue, filing patents and assembling management teams. States can help firms at this early development point, what analysts call the “Valley of Death,” as firms move from university spinoff to early-stage revenue-generating company, since venture capitalists only tend to take an interest once revenue starts to be generated.

Dedicated Technology Transfer Investments: By concentrating investment funding on commercialization of university and other basic research technology, states can help turn research into viable business models.

Pennsylvania’s Ben Franklin Technology Partners, established by the Pennsylvania General Assembly 25 years ago, has served as a statewide resource for technology commercialization for entrepreneurs. Since its inception, it has invested in 3,000 companies in the state, often at their earliest stages of development, where state investments helped them secure additional private angel and venture capital investments. A recent report estimated the institution boosted the state economy by $9.3 billion between 2002 and 2006 and helped create 32,382 "job years" that would not have existed without it.
Since its creation by the state, the Maryland Technology Development Corporation (TEDCO) has provided direct capital funding of $7.9 million to 132 companies to assist tech transfer from state universities. That initial investment has helped leverage additional funding from angel and venture investors, federal awards and other resources exceeding $298 million for those Maryland companies. For five years, TEDCO was recognized by Entrepreneur magazine as the most active early-stage investor in the nation, beating out all private sector and other institutional funds as the most active early stage funder of entrepreneurs.
Similarly, by distributing $33 million in economic development funding over the last five years, the Kansas Bioscience Authority (KBA) has helped the state become a national leader in biosciences, creating 1,164 jobs, encouraging $110 million in capital improvements, supporting research worth $44 million and attracted an outside equity investment of $29 million. More than five years ago, the state Legislature enacted the Economic Growth Act, giving the KBA $580 million over 15 years which helped the state attract a $650 million federal lab and helped launch a massive campaign to garner the prestigious National Cancer Institute designation for the Kansas University Cancer Center.

Technical Support for Tech Transfer: Beyond direct financial investments, states can make a difference just by providing technical assistance to entrepreneurs looking for help in launching technology start-ups. For example, the University of Oklahoma Office of Technology Development is working with the private non-profit entrepreneurial consulting and services firm i2e to speed tech transfer and create start-up companies around OU technologies. Florida's Institute for the Commercialization of Public Research received $600,000 this fiscal year to link entrepreneurs with investors and companies to commercialize technologies based on publicly-funded research. However, Florida's refusal to raise new revenues means that lawmakers may fail to revive a $250 million economic development fund that helped the Sunshine State to attract six research institutes before it was eliminated last year through budget cuts.

Business Incubators and Science Parks: Other key support states offer are physical and institutional spaces for entrepreneurs to setup shop until they are ready to be independent. 300,000 workers in North America are employed at a university research park and generate an additional 2.57 jobs in the broader economy, according to a report by the Association of University Research Parks. These research parks encourage businesses to take advantage of university research assets and employ university graduates, thus helping to nurture start-up firms and ideally integrate them into the broader local economy.

A recent study for the U.S. Department of Commerce: Economic Development Administration found that business incubators create up to 20 times more jobs than traditional infrastructure projects, and they do so at a fraction of the cost: $144 to $216 for each incubator-related job, compared with $2,920 to $6,872 for construction-related jobs.

Resources:
Pennsylvania Economy League - A Continuing Record of Achievement: The Economic Impact of Ben Franklin Technology Partners 2002-2006
U.S. Department of Commerce, Economic Development Administration - Construction Grants Program Impact Assessment Report
Information Technology and Innovation Foundation - 2008 State New Economy Index
Batelle and the Association of University Research Parks - Characteristics and Trends in North American Research Parks

Strengthen Industry Partnerships & Clusters

Beyond supporting individual technology firm start-ups, states are increasingly looking to support interrelated "clusters" of firms that reinforce innovation in a region around specialized industries, much as the car industry grew up in Detroit, the film industry in Los Angeles, finance in New York City, and as a paradigm of the high-tech economy, Silicon Valley became a source of ongoing computer-related innovation.

States can play a critical role in promoting such clusters beyond supporting university research and funding new start-ups by identifying key local assets, facilitating relationships among firms, deepening the talent pool, and encouraging investments that reinforce those cluster needs—a point emphasized by the National Governors Association in their report, Cluster-Based Strategies for Growing State Economies. States need to avoid endorsing the latest technology fad and handing out tax credits without real returns or accountability provisions. Instead, they need to carefully assess their own local strengths and support the specialized industries that can give their regional businesses a unique advantage in the global economy.

Pennsylvania-- an Innovation of Industry Partnerships: As Good Jobs First notes in a recent report, “ Pennsylvania, by virtue of its longstanding programs to foster early-stage companies, its new efforts to integrate its workforce strategy... through training consortia—'Industry Partnerships'—linked with key regional clusters...and to broadly diffuse the adoption of process technologies in manufacturing production" appears to have one of the most balanced approaches in promoting its high-tech economy.

In Pennsylvania, the Strategic Early Warning Network (SEWN), created by the non-profit Steel Vally Authority under a mandate from the State of Pennsylvania back in 1993, created a system that saves firms through early intervention.

The key is not to wait for a mass layoff notice, but to establish programs that monitor key sources of business information for economic danger signs that can predict plant closures -- and proactively allow states to reach out to firms in trouble and implement response and prevention strategies.
SEWN works with firms on everything from financial restructuring to dealing with owner succession issues to cost management to promoting new labor-management cooperation to improve productivity.
Back in early 2008, SWEN targeted a large number of small auto suppliers in the state, employing 23,000 workers in Pennsylvania, who SEWN knew would be facing a crisis with the large scale cutbacks by the Big Three automakers.

Beyond short-term interventions, Pennsylvania has built 90 Industry Partnerships (IPs) to promote longer-term strategic cooperation among regional firms. The IP program has engaged more than 6000 businesses. Main goals have been to connect training and education to the needs of industry sectors, help companies adopt high-performance organizational approaches, and expand opportunities for workers in those industries. The industry partnership program has been supported by $5 million in state funds to identify industry clusters and build the IPs in the first place, plus an additional $15 million for training through the IPs.

Other Efforts in Building Industry Partnerships: The National Fund for Workforce Solutions is a a new collaboration to encourage more public support for industry partnerships across the nation.

SkillWorks in Boston is a collaborative of local philanthropies, the City of Boston and the Commonwealth of Massachusetts that is working with employers in the regional economy to upgrade the workforce in the region.
Baltimore Alliance for Careers in Healthcare is designed to map careers for seven area hospitals, provide career coaching to reduce employee turnover and provide entry-level and bridge programs to expand the pipeline of underrepresented populations into the industry.
Washington State Industry Skill Panels are public/private partnerships of business, labor and education, funded by the state Workforce Board and convened by regional Workforce Development Councils in order to provide workers with better skills, employers with more efficiency and less turnover, and address the educational needs of key industry clusters in the states. Washington has seven active ISPs, including Building Manufacturing and Regional Advanced Manufacturing.

Resources:
Keystone Research Center - Pennsylvania's Industry Partnership Strategy
Steel Valley Authority (SVA) - Early Warning and Layoff Aversio
Seattle Foundation and SkillUp Washington - Creating Stronger Workforce Partnerships In Manufacturing
National Fund for Workforce Solutions - The Principles of the National Fund for Workforce Solutions and Their Implications for Public Policy
National Governors Association - Cluster-Based Strategies for Growing State Economies

Clean Energy Industry Support

Building a green economy is one of the largest areas of entrepreneurial energy these days and states are designing a wide range of programs to encourage firms in their states to become leaders. Since energy savings are an inherent source of potential revenue, the opportunities are large, but the need for technical, regulatory and financial assistance are also clear. The following are a few of the programs states are promoting in this area, although the Apollo Alliance extensively tracks clean energy programs in the manufacturing sector:

New York: Green Jobs/Green Homes NY: The passage of Green Jobs/Green Homes NY produced a job creation program that will foster energy savings and revitalization of distressed areas. The program will create an estimated 14,000 jobs and reduce energy costs for about 1 million homes and businesses across the state. Using an innovative revolving loan fund, the program will “provide up to $13,000 for residential homes and $26,000 for businesses to retrofit for increased energy efficiency.”
Pennsylvania: Building on the state's industry partnerships discussed above, this program will concentrate on upgrading workforce skills by developing industry-recognized credentials, participating in curriculum development at all levels, and helping workers respond to changing industry needs. This will involve multiple partnerships, including a 3 Rivers Clean Energy Partnership, which helps train workers for jobs in the clean energy industry and the Electronics Manufacturing Partnership, which helps firms become more environmentally conscious.
Washington: Lean and Green Assistance Program: Last year, the Washington Department of Ecology proposed a Lean and Green Assistance Program aimed at improving the environmental performance and provide technical assistance to companies across the state. From 2007 to 2008, three Lean and Environmental pilot project were undertaken, effectively saving businesses over $1.5 million and reducing pollution by more than 800,000 pounds according to the EPA.
Kansas SB 108 provides for $150 million in bonds to be issued by the state’s development finance authority to fund manufacturing projects through long-term loans to eligible wind and solar energy businesses in amounts not exceeding $5 million per project. Companies’ tax withholdings will be placed in a specially-created state economic revitalization fund during the period of the loan to pay off the principal and interest of the loans.
Michigan Manufacturing Diversification Program is a loan program backed by the state to help parts of the auto supply chain retool to join the clean energy supply chain, from helping companies eliminate chemicals from processes that clean steel for manufacturing to funding re-purposed factory conveyor belts for solar panel manufacturers.
Wisconsin: The Clean Energy Business Loan Program uses $55 million in ARRA State Energy Program to fund low-interest loans to businesses that promote major renewable energy production projects, the manufacture of clean energy products, advanced manufacturing of clean energy components, retooled supply chains, and energy efficiency programs at firms.

Conclusion

Job creation is not a single program for state policymakers, but a nexus of commitments, from fundamental investments in education and infrastructure to creating an environment where innovation is supported every step of the way from university research funding to investing in first-stage commercialization to building industry partnerships that can sustain networks of interdependent firms in a sector. The good news is that recessions have often been the birth point for some of the most important current firms in our economy, so the right decisions today could mean decades of economic growth in the future.

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State Job Creation Strategies Part I: Finding the Money and Investing in Human Capital and Physical Infrastructure

Nathan Newman — Tue, 19 Jan 2010 17:59:28 +0000

The fundamental challenge in this recession is that the growth that preceded it was a mirage. Bubble era borrowing created a network of financial jobs, real estate jobs and construction jobs that collapsed with the end of the bubble. Many of those jobs will never return.

An extremely high proportion (75%) of job losses in this recession are permanent rather than temporary. States will need to nurture completely new industry sectors and the infrastructure to support those jobs, while the jobless will need retraining in new skills to participate in those sectors.

The Private Sector Can't Do it Alone: As the Economic Policy Institute wrote recently, "it is likely that unemployment will remain above 8% even two years from now in the absence of bold and decisive action to create jobs." With the credit crunch and the reduction in consumer demand, small businesses are experiencing tough times. In 2008, for example, 43,500 businesses filed for bankruptcy, up from 28,300 businesses in 2007 and more than double the 19,700 filings in 2006.

What's needed: As this Dispatch will highlight, the first step is to fund jobs that support long-term economic competitiveness, notably by investing in people and physical infrastructure. While the economic climate for profit-making business opportunities is more limited, investments in education, health care, transit and energy efficiency can create immediate jobs while strengthening building blocks for long-term growth.

Next week's Dispatch will be a second part of this series on how states can nurture startups, strengthen existing industry sectors, and promote green jobs in their states.

Mobilizing for a Federal Support for Jobs and State Fiscal Relief: As we highlighted two weeks ago, a critical part of job creation will be a new round of federal job creation and state fiscal relief. We are asking state legislators to sign onto a letter to promote this job creation plan at www.progressivestates.org/jobcreation or by emailing jobcreation@progressivestates.org. Advocates can sign onto a similar letter for organizations or use our handy online tool to contact their state legislators to let them know about the job creation letter and to encourage them to sign.

Resources:
Progressive States Network - Take Action: Additional Federal Job Creation and State Fiscal Relief Needed
Economic Policy Institute - American Jobs Plan: A Five Point Plan to Stem the U.S. Jobs Crisis
Center for Labor Market Studies (Northeastern Univ.) - The Great Recession of 2007-2009: Its Post-World War II Record Impacts on Rising Unemployment and Underutilization Problems Among U.S. Workers

Direct Public Money to Investments in Economic Growth

In the current economic and fiscal crisis, finding the funds for long-term investments is a challenge, but those investments will deliver both short-term jobs and long-term economic growth to turn state economies around. States need a balanced approach of revenue increases, bonds for long-term investments and tapping existing sources of state capital like state pension funds to marshal the capital needed for economic recovery.

Raise Revenues, Don't Cut Public Investments: The recession has made clear the hollowness of the bubble economy in many states, especially in some of the low-tax, low-investment Sunbelt states touted by anti-tax forces as exemplars of economic growth.

When measuring long-term economic competitiveness, states with some of the highest marginal tax rates on individuals -- from New York to Maryland -- were supporting some of the most innovative "new economy" industries in the country, according to a 2008 analysis by the Information Technology & Innovation Foundation. As we detailed last year, progressive tax increases to fund economic recovery are the better alternative to budget cuts. Many needed investments are in the fundamentals of education and infrastructure as well as in the nurturing of new sectors where private capital is unlikely to effectively step in. Increased tax revenue to fill in government and private sector gaps in investment is clearly needed.

Use State Bonding Authority: One obvious source for funding long-term growth projects are new bonds that can be paid back with the tax revenue yielded by greater economic growth. Especially where tolls or energy savings will directly return revenue to the state from bonded investments, legislative leaders are aggressively pursuing new bond investments.

The federal ARRA recovery plan provides a two-year 35% tax credit for state Build America Bonds, which is yielding record low interest rates for states that are issuing bonds. For example, Washington state received an interest rate equivalent to 3.52 percent on $500 million in bonds issued in October. To help municipal governments take advantage of lower interest rates and lower issuance costs, nearly a dozen states have created "state bond banks" to pool the loans of local governments.

A few examples of recent state bond discussions around the country include:

The Ohio House of Representatives has approved placing a $950 million bond issue on the May 4th ballot to renew for another five years the state’s largest economic development project, the Third Frontier, which invests in research and commercialization of technology in five industries sectors and created 41,300 jobs from 2003-2008.
Last week, the Washington State House Capital Budget Committee approved sending $861 million Jobs Act Bonds to voters in November to fund schools and colleges to fund energy upgrades. The sponsor, Rep. Hans Dunshee, estimates it would create 38,000 jobs and generate energy savings that will cover much of the interest costs.
Minnesota legislative leaders are proposing $1 billion in bonds to build and repair facilities around the state.

Use Pensions Funds for In-State Investments: Unwilling to rely on uncertain global investment markets to fuel economic growth, states are increasingly choosing to directly invest in local state businesses. Instead of giving away corporate welfare and subsidies, states can offer needed capital to create a financial stake in firms. If these businesses are successful, they return equity to taxpayers that can be reinvested in other projects.

One study found that the California Public Employees' Retirement System's in-state investments fed an estimated $15.1 billion into in-state economic activity in 2006 and created 124,000 jobs-- more jobs than the construction or motion picture industries. Other examples of in-state pension investments include:

Florida Governor Charlie Crist recently signed an economic stimulus plan for the state that redirects $1.95 billion of the state's pension fund into direct investments in Florida's economy.
Washington state held $1.4 billion in Washington-based investments at the end of 2008, using the money to leverage additional capital from other sources to invest in the state.
New York held $403.6 million as of March 2009 through its Common Retirement Fund with another $500 million available to invest in New York-based businesses.
The Invest Michigan! Fund features The Michigan Opportunities Fund and the Growth Capital Fund and is capitalized with $300 million from the state's pension fund.
In Indiana, the public pension funds collaborated with state universities and various health-based companies to launch the Indiana Future Fund, an investment fund designed to benefit Indiana companies, especially in the life sciences and high technology arena.

Avoid Privatization as a Funding Source: Given budget deficits, some states are being lured by the supposed "free lunch" offered by selling or leasing public assets to private firms with the promise of upfront private investment. Unfortunately, as we have detailed repeatedly (see here and here and here), privatization of public assets are inherently likely to ripoff the public to the benefit of private interests.

As detailed in a U.S. PIRG report last year, since governments can issue tax-free bonds at lower rates than private investors, "deals based on private capital are inherently more expensive than public financing." In 2008, Missouri was planning to use some form of privatization with investors to fund an ambitious plan to repair or replace 802 bridges. Now, the Missouri DOT is funding the entire project through the sale of government bonds.

Don't Waste Money on Direct Subsidies to Businesses: One general caution for states is to limit grants, tax credits and other giveaways to business. Instead use either direct equity investments or loans that are repaid in order to replenish the supply of public capital over the long-term.

States waste money competing for firms to cross the border from another state, rather than on fostering entrepreneurship and new jobs. A recent Good Jobs First report on high-tech deals by states notes that many are extremely costly. The poster children for bad deals are North Carolina's large subsidies to Dell Corporation, who took the money, but then sent the 900 jobs off-shore four years later and New York giving microchip maker AMD (later Global Foundries) $1 million in taxpayer funds for each job being created by the firm upstate. As the report states:

Tax reductions, exemption or credits “exert a very small marginal influence on corporate investment decisions because other cost factors such as labor, occupancy and other key inputs are far larger than taxes (or tax breaks)”¦ For the vast majority of companies, tax breaks are windfalls, not determinants, and are therefore wasted.

Redeploy Wasted Corporate Giveaways to Real Public Investments: If states do a thorough review of ineffectual subsidies, costly contracting out, and tax credits, they can generate additional revenue that can be used for more effective job creation efforts. Progressive States Network has worked with allies to outline model Corporate Transparency in the State Budget legislation and set up a supporting campaign webpage to help achieve that goal.

As the rest of this Dispatch emphasizes, states can better invest scarce public dollars in upgrading the quality of the workforce and infrastructure, rather than engaging in costly bidding wars with other states for jobs.

Resources:
Information Technology & Innovation Foundation - The 2008 State New Economy Index: Benchmarking Economic Transformation in the States
U.S. PIRG - Private Roads, Public Costs: The Facts About Toll Road Privatization and How to Protect the Public
Council of Development Finance Agencies - State Bond Banks: Municipal Borrowing Made Easy
CALPERS - CalPERS - An Economic Engine
Good Jobs First - Growing Pennsylvania's High-Tech Economy: Choosing Effective Investments
Progressive States Network - Corporate Transparency in State Budgets

Invest in People- the Key Engine of Growth

In a global economy where the quality of the workforce increasingly determines the standard of living, investing in an educated and healthy population is key to promoting state economic growth.

Invest in Education: One of the largest successes of the recovery plan has been preventing massive teacher layoffs and creating or preserving 250,000 education positions. Additional federal help will be needed to stave off reductions in the coming years, but it is a marked success that despite the largest downturn in post-war history, the core educational infrastructure of our nation has been preserved.

Why this is so important is highlighted by a number of recent studies that emphasize that investments in education have clear dollar returns to state governments.

Each new high school graduate yields a net public benefit of $127,000 or 2.5 times the cost of needed public investments, according to a Columbia Teachers College report. In fact, cutting in half the number of high school dropouts would yield $45 billion in extra tax revenues. High school graduates themselves will earn $117,000-$322,000 more in their lifetimes than dropouts, with female college graduates, for example, earning $800,000 more than dropouts.
As we detailed last spring, early education investments in particular show long-term economic payoffs. A recent Cornell University study found that funds spent in the early education sector have more stimulative effect on the economy than most other spending. Early education programs help parents take advantage of opportunities in the workforce and child care improves parents' productivity at work. One study by the business-backed Committee for Economic Development, estimated that for every dollar invested in preschool, there was an expected return of $2 to $4 in future societal benefits.

Part of youth education is giving them entry-level job training. The federal recovery plan helped revive summer youth job programs across the country, offsetting massive youth unemployment in the private sector. The Idaho Labor Department sponsored its first youth employment program in over a decade.

Support Worker Retraining: While training can't create jobs, it can ensure that workers who are unlikely to be reemployed in their old industry sectors have a chance to be reemployed somewhere else -- and that vibrant industries have the skilled workforce needed to expand in a state.

A Michigan Council for Labor and Economic Growth study found that a five percent increase in college-educated adults would boost economic growth by 2.5% over ten years and real wages by 5.5%. Similarly, studies show that just helping workers get their GED significantly boosts their employment in the long-term. Notably, a study by the National Skills Coalition (formerly the Workforce Alliance) found that even as unemployment mounted in summer 2009, 60% of employers still had trouble finding qualified applicants for the vacancies they did have -- emphasizing the lack of fit in skills between those laid off and the sectors where growth is likely to occur.

In our Dispatch Averting Layoffs and Revitalizing the Manufacturing Economy, we highlighted a range of best practices through which states can both work to avert impending layoffs and use rapid-response to help employees get new jobs or enter retraining programs as quickly as possible. These include Rapid Response programs used by some states to on-site contact with employees before layoffs, accessing training programs like Trade Adjustment Aid, working with communities to tailor training and placement programs, as well as promoting Peer Networks to train groups of workers during layoffs to collect information from fellow workers, help connect them with community services, promote job referrals, and work with community leaders.

Fund Health Care and Support the Safety Net: Health care and other safety net spending is not just a public expense; it is also itself an investment in economic growth. A healthier workforce means greater economic productivity and more years of productive labor. And the health care industry is itself a source of good quality jobs.

A few years ago, a Commonwealth Fund study estimated that labor time lost due to health reasons totalled $260 billion per year. And unhealthy workers often have lower productivity at work. In fact, because people are living and working longer, long-term economic growth is likely to be far higher than many current government projections, according to a recent study by North Carolina State University. "Spending on health care productivity, biomedical research and universal health care should be considered an investment that will eventually lead to increased economic growth," argues co-author Dr. Al Headen. The payoffs are likely to be more taxes paid, more consumer spending and far lower public expenditures on programs like Medicare than currently assumed.

Another remarkable accomplishment of the federal-state partnership in the last year has been not only preservation of basic health care spending for low-income families, but the expansion of SCHIP programs for children and COBRA subsidies for the unemployed. This is in sharp contrast to the recession in the early part of this decade when literally millions of people lost publicly funded health coverage. Maintaining health programs will continue to be a challenge for states -- and new federal funds are a key part of that solution -- but it should be considered a key part of long-term investments in a healthy workforce.

Integrate New Immigrants into the Economy: As we emphasized last week, keeping an estimated 12 million people in the shadows of the economy is bad for them, bad for native workers and bad for the U.S. economy. A recent report estimated that immigration reform that integrates new immigrants into the U.S. economy would create $1.5 trillion in added GDP over ten years and newly legalized workers would increase tax revenues by up to $5.4 billion in the first three years. Another study by the CATO Institute found that legalization would boost the incomes of U.S. households by $180 billion annually by 2019.

Across the board, the goal should be to maximize the productivity of all workers in our economy and produce the most economically competitive workforce in the world.

Resources:
Progressive States Network - Early Education Investments: Economic Importance and Policy Implementation
Columbia Teachers College Center for Benefit-Cost Studies of Education - An Excellent Education for All of America's Children
Workforce Alliance - Job Training is Key to Success of Jobs Bill: Analysis and Recommendations
Progressive States Network - State Action for the Unemployed
National Employment Law Project - Rapid Response Training Overview
Michigan's Human Resource Development Institute - Peer Networks
Commonwealth Fund - Health and Productivity Among U.S. Workers
Council for Labor and Economic Growth - Transforming Michigan’s Adult Learning Infrastructure
Center for American Progress and the Immigration Policy Center - Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform
Cato Institute - Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform
North Carolina State University - Study shows health care spending spurs economic growth

Creating a 21st Century Infrastructure in the States

“As a country, we’re deluding ourselves if we think we have put enough into infrastructure," notes the Urban Land Institute. "We’ve been under-investing for 30 years.” As a percentage of gross domestic product, infrastructure spending actually has been declining since 1959. A 2009 American Society of Civil Engineers (ASCE) assessment calculates that $2.2 trillion is needed for infrastructure repairs and upgrades just in the next five years. In contrast, China has committed $259 billion to its plans for building the world's largest high-speed rail system -- with trains going up to 218mph -- and plans to add another half trillion dollars in the next few years for a total investment to $730 billion by 2012. That's more than the entire 2009 federal recovery plan.

The federal recovery plan had $132 billion for infrastructure of all kinds, from roads to transit to smart energy grids, but that's a tiny part of what is needed for the U.S. to retain global competitiveness.

More and Better State Transit: Focus on repairing existing infrastructure, strengthen gateway infrastructure in ports and cities which are the focus of global shipping and travel, and reconfigure suburbs to better integrate regional economies.

Public Transit Investments are a Key Job Creator: One clear lesson from the recovery plan, according to a recent report, is that money spent on public transit yields nearly twice the jobs compared to similar amounts spent on highway projects. This result is due to the fact that public transit spends less money on real land costs and supports vehicle manufacturing and maintenance jobs. It also especially helps low-income workers save money in getting access to jobs where transit integrates communities. One innovative, lower-cost transit approach is bus rapid transit (BRT), which builds separated lanes for larger buses that can move at speeds approaching subway lines. Pioneered in Ottawa, Canada and Adelaide, Australia, similar systems are spreading to Latin America, China, India and Mexico. In the U.S., Los Angeles and Boston have adopted BRT principles and Chicago will be inaugurating BRT service in 2010.
Integrate transit with land use planning: Building transit in the middle of sprawl does little to ease congestion; instead transit funding needs to be linked to development planning that integrates transit with access to jobs and retail. The Denver region is a notable success story in using transit and land use zoning to reclaim its urban downtown, adding a 122-mile light rail system, instituting a Bus Rapid Transit system to link to nearby Boulder, and linking the urban core to multiple town centers in the surrounding suburbs.
Strategically Apply User Fees to Fund Infrastructure: The Urban Land Institute emphasizes that more of the costs of transit infrastructure will inevitably need to be borne by consumers in the form of higher gas taxes, tolls and congestion pricing in urban areas. This needs to be combined with targeted tax relief to ease the burden on low-income families. The reality is that gas taxes in the U.S. are far smaller than European economic competitors, who use those revenues to fund far more robust transit upgrades across their continent.

Broadband and Smart Grid Investments: Despite the U.S. playing a key role in creation of the Internet, a study by the International Telecommunications Union found that the United States now ranks 17th in global broadband penetration. Lack of affordable broadband access undermines the international competitiveness of our communities and workforce. The $7.2 billion of direct broadband funding in the federal recovery plan and pockets of other funding for digital infrastructure throughout the ARRA also emphasized broadband as a catalyst for spurring job creation and economic growth.

A number of state legislators have created Broadband Strategy Councils to focus on using those and internal state funds to increase access to and adoption of affordable broadband. Beyond investing in physical infrastructure, increasing digital literacy is a key investment as well. During the 2008 legislative session Washington state passed SB 6438, which created a statewide high-speed Internet development process and established the Community Technology Opportunity Program (CTOP) that will provide resources for capacity-building and grant-giving to Community Technology programs that provide hands-on technology access and training to residents.

Water Systems: Many cities and regions are using old water systems desperately in need of repairs and upgrading. Nationwide, the U.S. Environmental Protection Agency (EPA) projects a $224 billion funding gap between 2000 and 2019 between what states are spending and federal requirements for water quality. Part of the solution are new policies to reduce wasteful water use, since per capita domestic water consumption in the U.S. is more than twice as much as most global competitors-- and more than four times the use by citizens of Great Britain and China.

In California, where some water bills can approach $500 a month, jurisdictions began to require retrofitting homes on resale. Development needs to be restricted in areas lacking water systems, since such growth just dumps costs on government and leads to underfunding water systems in established areas.

Infrastructure Projects already approved: Some notable examples of integrated infrastructure investment programs around the country include:

Illinois Department of Transportation has $3.1 billion in committed projects in 2009. In addition, Illinois is creating a major “inland port” with the development of Union Pacific's new intermodal facility in Joliet that will create an estimated 7,000 jobs.
Iowa's I-Jobs program approved last year has created a three-year, $830 million investment in Iowa’s infrastructure using existing gaming revenue including public improvements, community colleges, veterans homes ($285 million), disaster recovery and prevention ($165 million), improving transportation infrastructure ($115 million), rebuilding universities ($115 million), improving environment and water quality ($80 million), and enhancing telecommunications and renewable energy ($35 million).
Oregon's Job and Transportation Act invests more than $1 billion to address all sectors of Oregon's transportation system, including roads, bridges, bike and pedestrian facilities, mass transit, railroads, ports and airports. Green aspects of the bill included multi-modal transportation, increased transit funding, planning for greenhouse gas reduction scenarios, a congestion pricing pilot project, and an urban trail fund for non-motorized vehicles and pedestrians.

The key to long-term growth is moving infrastructure investments from one-off projects towards integrated investments that connect them into a holistic plan for growth. As Robert Puentes of the Brookings Institution said this past year at a Congressional hearing, "the problem is that there is too little integrated decision making that crosses disciplines and joins-up solutions in infrastructure investments." To achieve maximum effectiveness, transit and other infrastructure investments need to be coordinated not only with each other, but also with land use and housing decisions.

Next Week: State Job Creation Strategies Part II: Supporting Innovation, Industrial Clusters & Green Job Creation

Resources:
Urban Land Institute - Infrastructure 2009: Pivot Point
American Society of Civil Engineers - Report Card for America's Infrastructure with State and Local Report Cards
U.S. PIRG, Smart Growth America, CNT - What We Learned from the Stimulus: And how to use what we learned to speed job creation in the 2010 jobs bill
Progressive States Network - Making Broadband a Key Part of States' Economic Recovery

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Focus on Jobs: The Next Step in National Economic Recovery and State Fiscal Relief

Altaf Rahamatulla — Thu, 10 Dec 2009 18:01:45 +0000

On Tuesday, December 8th, President Barack Obama delivered an address to the Brookings Institution on the need for increased focus on the job crisis that is affecting so many working families across the country. His proposals included key programs administered by the states, such as investments in infrastructure, clean energy investments, the extension of unemployment insurance, and ensuring that states are not forced to lay off teachers, police, and other vital service providers. This would be complemented by direct federal help such as tax breaks for small businesses and extension of COBRA subsidies for the unemployed.

The President stated, "[f]or even though we've reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who've been swept up in the flood. There are more than 7 million fewer Americans with jobs today than when this recession began. That's a staggering figure, and one that reflects not only the depths of the hole from which we must ascend, but also a continuing human tragedy." The speech followed a job summit the President convened last week that featured CEOs, small business owners, labor leaders, and nonprofits sharing insights on methods to foster economic growth.

Reports Detail the Jobs Crisis and the Need for Expanded Recovery Programs: While a new Congressional Budget Office (CBO) study documents that the recovery plan has created or saved as many as 1.6 million jobs, millions of unemployed Americans are still in need of help.

This need for new jobs highlighted by the President is echoed by a recent analysis by the Economic Policy Institute (EPI), entitled Jobs Crisis Fact Sheet. Among their findings:

15.4 million Americans are unemployed;
38.3 percent of unemployed have not had a job in over six months;
8 million jobs were lost during the recession, which includes 1.6 million lost in construction and 2.1 million lost in manufacturing;
1 in 10 Americans are unemployed;
1 in 6 Americans are underemployed;
15 states are experiencing double-digit unemployment.

These bleak figures are exacerbated by state fiscal uncertainty that is forcing lawmakers to consider cuts to vital programs, such as education and health care. As the Center on Budget and Policy Priorities (CBPP) indicates in Additional Federal Fiscal Relief Needed to Help States Address Recession's Impact, total state deficits in FY2011 and 2012 will likely exceed what can be covered by ARRA funding by over $260 billion. Furthermore, "[p]resuming they will get no more fiscal relief, states will have to take steps to eliminate deficits for state fiscal year 2011that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year."

Mark Zandi, chief economist at Moody's Economy.com, expressed a similar sentiment in an interview with Stateline.org: "I think it’s vital states get additional stimulus. If no more aid is forthcoming, then (states will) be cutting jobs, programs and raising taxes”¦ because their fiscal situation continues to deteriorate more rapidly. Tax revenues are still falling at a very rapid clip. So states are going to have a huge hole beginning in 2011 when the current stimulus runs out. I suspect they’ll be cutting spending and raising taxes long before reaching that cliff."

For the unemployed specifically, the National Employment Law Project and the Center for American Progress highlighted in their report Keeping a First Line of Defense for the Jobless that benefits for the unemployed provided by the ARRA recovery plan, from extended unemployment benefits to COBRA health care premium subsidies, have been critical in providing help to jobless individuals and injecting cash into communities hardest hit by unemployment. The report outlines how these programs have helped the economy and why the programs should be renewed.

Renewed Support for States and the Unemployed Needed: Accordingly, any federal job creation and economic growth plan must be accompanied by further fiscal relief for states. Progressive States Network, along with a wide range of allies, have called for a second round of federal stimulus to assist burgeoning state budget gaps.

Resources:
Center on Budget and Policy Priorities - Additional Federal Fiscal Relief Needed to Help States Address Recession's Impact
Center on Budget and Policy Priorities - New CBO Report Finds Recovery Act has Preserved or Created up to 1.6 Million Jobs
The Economic Policy Institute - Jobs Crisis Fact Sheet
The Economic Policy Institute - Plenty of need for a second stimulus
NELP and Center for American Progress - Keeping a First Line of Defense for the Jobless
Progressive States Network - Job Losses and State Fiscal Crises: Time for More Federal Stimulus Spending
Stateline.org - Economist Mark Zandi: On stimulus, jobs, state finances, inflation, and the year ahead
The White House - The Big Picture and Some Next Steps on Jobs
The White House - President Obama Announces Proposals to Accelerate Job Growth and Lay the Foundation for Robust Economic Growth

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Eye on the Right: Businesses Split over Climate Change

Caroline Fan — Thu, 22 Oct 2009 17:04:44 +0000

The debate over clean energy is ripping open divisions in conservative business lobbies. Debate on federal climate change legislation has led an increasing number of businesses to leave the Chamber of Commerce, the National Association of Manufacturers, and other business associations because of those organizations' stances against recognizing the scientific validity of climate change. The revolt has been growing ever since a senior Chamber official called for a "Scopes monkey trial of the 21st century" to evaluate evidence of global warming.

Some of the nation's largest energy utilities — including Pacific Gas & Electric, PNM Resources and Exelon, the largest U.S. operator of nuclear plants — quit the Chamber altogether, and Nike stepped off of the Chamber's board, leading Business Week to question the Chamber's clout and credibility. A recent article cited the dysfunction of the Chamber and its outdated policies as a main reason why it is losing its status:

Climate legislation “is becoming more real,” said Brian Hertzog, director of strategic communications at PG&E, which resigned from the Chamber last month. “That dynamic has thrown things into a sharper relief.”

Other high profile businesses to leave recently include Apple, and the parent company of Revlon is debating whether or not to leave over differences on global warming. In addition, local Chambers of Commerce in New York and San Francisco are distancing themselves from the National's right-wing policy position. Due to increased scrutiny, the Chamber has actually started citing the actual number of businesses that they represent - 300,000 versus the 3 million that they had been claiming.

There are also splits occurring at other business associations - Duke Energy, a large utility company, announced in May that it would leave the National Association of Manufacturers over the issue. Duke and several other companies, including aluminum-maker Alcoa, dropped out of American Coalition for Clean Coal Electricity, which promotes building coal-fired power plants.

In addition, there are efforts by businesses in unlikely states to push for clean energy reforms. Entergy Arkansas and other members of the group Arkansas Business Leaders for a Clean Energy Economy joined representatives of 150 businesses from around the country to lobby for clean energy legislation that they say would create hundreds of new jobs in the state. These unlikely allies' voices have provided a counter to traditional business claims that a climate change bill would lose jobs, and they provide the statistics to prove that clean energy can mean job growth: a study from Pew Charitable Trusts showed that in 2007, 448 Arkansas businesses had generated more than 4,500 clean-energy jobs. The same study shows that in ten years, clean energy jobs in South Dakota will increase by over 93 percent compared to overall job growth of 5 percent.

The divisions reflect that many businesses see a clean energy economy and measures to address climate change not as a burden, but as a business necessity and even a chance to boost the economy -- and create new business opportunities. And they are questioning the conservative ideological allegiance of traditional business associations that are increasingly not meeting their needs.

For more resources, please visit:
San Francisco Chronicle: Changing alliances shape climate-change debate
Business Week: Does the U.S. Chamber Speak for Big Business?
Pew Charitable Trusts: The Clean Energy Economy

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Green Jobs Programs to Drive Economic Recovery

PSN — Mon, 15 Jun 2009 16:06:04 +0000

For awhile now the U.S. has inadequately invested in the development of urban and rural America, leaving many families and communities struggling to make ends meet. At the same time, we face an environmental crisis in the form of global climate change and the challenge of reducing our dependence on fossil fuel.

Our current economic crisis provides us an opportunity to reinvest in some of our countries most blighted areas. In the words of the organization Green for All, "new transit spending and energy audits in inner cities to windmills and biomass in our nation's heartland, green jobs mean a reinvestment in the communities hardest hit in recent decades." Correctly structured, a clean energy economy and green jobs can provide many low-income and currently unemployed individuals a bridge from poverty to economic independence.

For years, right wing activists propagated the myth that a strong environment and good jobs were incompatible. The result of this divisive strategy was the undermining of both wage standards and environmental planning. In recent years, however, environmentalist and labor advocates have formed new progressive alliances, working together to promote a clean energy economy with good green jobs that protect both our environment and our workers.

Now advocates for a clean energy economy and green jobs find themselves with a friend in the White House. Since elected, President Obama has repeatedly articulated a commitment to addressing climate change issues and developing renewable energy sources, both to improve the environment and also as tools to help rejuvenate the worst economy since the Great Depression. The $787 billion American Reinvestment and Recovery Act, passed to stimulate our economy, was mainly focused on putting people back to work. Approximately $70 billion of this money was directed towards the nation’s energy economy, most of it for “green” energy. Specifically, the stimulus plan will shift federal funds into several energy-related areas, including but not limited to: $16.8 billion for Energy Efficiency and Renewable Energy programs; $5 billion to install energy efficiency improvements in the homes of low-income families; $4.5 billion to develop a digital electric grid and $100 million for the training of electric grid workers; and $3.4 billion for fossil energy research and development. Even more recently, Vice President Biden announced plans to dedicate $500 million from the ARRA funds to train housing project residents to weatherize homes and perform other green jobs.

The economic recovery program could "create or save 2.5 million green jobs designing, building and maintaining renewable energy projects and increasing the energy efficiency of schools, homes and federal office buildings." According to a recently published report 100 Days 100 Projects, it appears that even in a relatively short period of time the stimulus money has had some positive impact on the green job market. President Obama recently said, “[i]n these last few months, the American Recovery and Reinvestment Act has saved or created nearly 150,000 jobs -- jobs building solar panels and wind turbines, making homes and buildings more energy efficient.”

This Dispatch will focus on the long-term investments and policies that will be central to the creation of good jobs in a 21st century green economy.

Resources:
Pew Charitable Trusts - The Clean Energy Economy
American Recovery and Reinvestment Act
Stimulus to Fund Thousands of New, Green Jobs
Recovery.org - 100 Days 100 Projects
Green For All - Green-Collar Jobs Overview

Table of Contents
- Building Strategic Clean Energy and Green Job Initiatives
- Fostering Good Green Jobs can Help Rebuild the Middle Class and Incorporate Job Creation into Community Development
- Energy Efficiency in Homes: Weatherization
- Ensuring Green Jobs are Good Jobs
- Model Green Jobs Legislation
- Conclusion

Building Strategic Clean Energy and Green Job Initiatives

The term "green jobs" is multi-faceted, used to describe the good-paying, career-track, sustainable jobs that are created through environmentally sensible projects. Such jobs include: working with renewable energy, new construction jobs for weatherization projects, rehabbing buildings for energy efficiency, the creation of better transit systems, and new jobs in manufacturing and service industries re-engineered for a clean energy economy. Since the term green jobs is so broad, states should focus on the clean energy sectors and green job opportunities that hold the most promise for their location and population. This Dispatch will specifically focus on the benefits of clean energy manufacturing jobs that will provide opportunities to rebuild the middle class, as well as weatherization programs that can incorporate job creation with community improvements.

Current Status of States Clean Energy Economy: There is tremendous growth potential in a clean energy economy. While in 2007, clean energy jobs represented a fraction of all jobs in the U.S., between 1998 and 2007, these jobs grew by 9.1% compared to a 3.7% growth rate for total jobs. According to recent study by Pew Center on the States, states with clean energy economies can be placed into six different categories based on job figures from 1998-2007.

Large and Fast Growing: 3 states - CO, OR and TN - have large clean energy economies that are growing fast. In 2007, these states exceeded the national average for both the number of clean energy jobs and the average annual growth rate for those jobs. It is worth noting that these states are geographically diverse, highlighting that location is not the only factor in the success of a state's clean energy economy.
Small and Fast Growing: 15 states - AZ, HI, IA, ID, KS, LA, ME, MS, NE, NV, NM, ND, SC, SD, WY and DC - have small but fast growing clean economies. These states had fewer clean energy jobs than the national average in 2007, but exceeded the national average annual growth rate.
Large and Growing: 12 states - CA, FL, GA, IN, MA, MI, MN, NC, OH, TX, VA, and WA - have large and growing clean energy economies. In 2007, these states exceeded the national averages for the number of clean energy jobs and their clean energy sectors are growing at a moderate yet steady rate.
Small and Growing: 12 other states - AL, AK, AR, CT, DE, KY, MO, MT, NH, OK, RI and VT - have small but growing clean economies. They had fewer clean energy jobs than the national average in 2007, but displayed some annual growth.
Large and Losing: 4 states - IL, NJ, NY, and PA - each have large clean energy economies, however they have experienced a net loss of clean energy jobs over the past ten years.
Small and Losing: 4 states - MD, UT, WV, and WI - have fewer than average jobs in the clean energy economy in 2007 and experienced net losses in these jobs over the past 10 years.

Aspects of Well Thought-Out Clean Energy and Green Job Initiatives: As states continue to grow the clean energy economy and green jobs, investments will need to be made in training and facilities with a strategic approach to the development of a clean energy economy and green jobs. Among other things, a strategic approach includes targeting specific sectors that have the most promise for an individual state using good data on labor market opportunities. In addition, states should build strategic partnerships, tie green jobs to overall community and workforce development, employ energy standards as a green job stimulus, and require that companies receiving clean energy tax subsidies and grants meet high labor and community benefits standards. As programs progress it will be important for states to continuously measure, evaluate, and improve green job programs.

Resources:
Good Jobs First - High Road or Low Road? Job Quality In the New Green Economy
Pew Charitable Trusts - The Clean Energy Economy
Green For All - Green Pathways Out of Poverty: Workforce Development Initiatives
Center on Wisconsin Strategy, Workforce Alliance, Apollo Alliance - Greener Pathways: Jobs and Workforce Development in a Clean Energy Economy

Fostering Good Green Jobs can Help Rebuild the Middle Class and Incorporate Job Creation into Community Development

Nationwide, wages are stagnant, manufacturing jobs are declining, and more than one in five working Americans hold poverty wage jobs. At the same time, the development of a clean energy economy presents us with an opportunity to create good-paying green jobs, such as machinists and technicians.

The Clean Energy Sector: States can help to rebuild the middle class by investing in the clean energy sector. As the clean energy sector expands, numerous jobs directly correlated with creating, storing, and distributing renewable power will be created. While currently this sector is less developed than more traditional green jobs, such as jobs in the pollution mitigation sector, it is growing rapidly. Predicted to be the backbone of the clean energy economy, if fostered and structured correctly, the clean energy sector can be one of the major pieces in the rebuilding of a stronger and more environmentally friendly economy.

Loss of Manufacturing Jobs Negatively Impacts the Middle Class: This year Michigan saw its unemployment rate climb to 12.6%, in part due to the closing of many Detroit-based auto manufacturers. In an attempt to rebuild its crumbling economy, Governor Granholm has created a "No Worker Left Behind" program, which in part, aims to create green jobs for Michigan residents. Michigan is not alone in its need to find replacement jobs for manufacturer workers. More than one million U.S. manufacturing jobs have been lost since December 2007, with a total of 4.6 million vanished since 1999. Many of these were the country's best middle class jobs. As these jobs disappear, with a substantial number of them going overseas, workers are often forced to take lower-paying jobs or even worse left jobless. The result is a shrinking middle class and a deepening of the gap between the wealthy and the poor in our country.

Investments in Clean Energy Can Help Rebuild the Middle Class: It is estimated that by 2016 the domestic market for clean energy products, such as solar panels and wind turbines, will reach $226 billion annually. Over the next 20 years, as demand for solar and wind power rises, approximately 70%-80% of new jobs created in these industries will be in the manufacturing sector. Like traditional blue-collar jobs that have been disappearing from our economy over the past decades, these green-collar jobs, if structured correctly, will pay family wages, provide benefits, and offer opportunities for career advancement. According to an Apollo Alliance report, for every $1 million invested in "renewable energy systems, approximately five full time component manufacturing jobs are created." Further, the report found that for every "$1 million invested in energy efficiency programs, three to four building-material manufacturing and five energy efficient appliance manufacturing jobs are created." Even more "indirect" jobs, in areas such as finance, transportation, and installation, will be created as result of the sector's overall growth.

However, in order to benefit from the growing demand for renewable energy products in our country, the U.S. needs to invest in the necessary generation and production facilities, as well as worker training programs. For example, currently, about half of America's existing wind turbines were built overseas and the U.S. ranks 5th among countries producing solar energy components, despite the fact that the solar cell was created here. The U.S. must be proactive and focus our economic strategies on a green economy to fully capitalize on the opportunities at our fingertips and to ensure that we do not lose out to other countries who are prepared to deliver these products.

Resources:
The Clean Energy Economy
Apollo Alliance - Make it in America
Green For All - Green-Collar Jobs Overview

Energy Efficiency in Homes: Weatherization

Buildings account for 40% of U.S energy consumption. Often living in the least efficient housing in the country, the typical poor household spends 14% of its gross income on energy bills. In fact, among low income households, unanticipated utility bills are the second leading cause of foreclosures. However, as energy prices rise, the economy continues to struggle and people cannot find work, meeting household energy bills is becoming an increasing burden not just for families with incomes at or near the poverty level, but also for individuals above the poverty line. Weatherization of buildings can help reduce energy bills, while also creating jobs.

According to David Goldstein, of the National Resource Defense Council, "energy efficiency is the biggest, cheapest and fastest, new energy resource available to the U.S." It has been estimated that families whose homes are weatherized can expect to save $350 per year on their energy bills. Some ways to make homes and buildings more energy efficient are to insulate walls, caulk air infiltration locations and replace old energy inefficient appliances.

Stimulus Provides Funds To Create Weatherization Jobs: The federal stimulus package provides $5 billion to help fund the Weatherization Assistance Program. Congress estimates that this new level of funding will help weatherize approximately one million more homes. According to the New York Times, the federal Energy Department's Weatherization Project Director, Gil Sperlin, predicts that weatherizing a million homes annually would directly create about 78,000 jobs for a year. While these jobs will only make up a very small portion of the millions of green-collar jobs that have been promised by President Obama, “it’s a decent number of jobs per dollar spent,” said Harry J. Holzer, an economist at Georgetown University and at the Urban Institute, a nonprofit group in Washington. “The work is productive and the jobs are at a mix of skill levels.”

Two positive aspects of the green weatherization jobs created under the ARRA are the existence of a prevailing wage requirement and the fact that weatherization jobs cannot be shipped overseas. First, the ARRA specifically states that "all laborers and mechanics employed by contractors or subcontractors on projects funded directly by or assisted in whole or in part by or through the Federal government pursuant to the Recovery Act shall be paid" a prevailing wage. This requirement will help ensure that workers are being fairly compensated. Second, weatherization jobs are perfectly designed to use local labor to improve local houses. However, state and municipal weatherization and retrofitting projects will need to be tied to training programs, since there is a shortage of qualified workers.

Newark Uses Weatherization Projects to Create Good Union Jobs: When policy leaders are implementing weatherization programs funded under the ARRA, it is important that programs are evaluated not only with a strict cost-benefit analysis, but also in terms of community development. "Small-scale, locally-run programs can help largely low-income communities begin to control their own energy destinies while creating jobs and teaching weatherization skills." A recent weatherization program undertaken in Newark provides a model program on how weatherization projects can be used to spur community development. Mayor Cory Booker, the Laborer's International Union of North America (LIUNA), and the Garden State Alliance for a New Economy (GANE) initiated a partnership to offer residents union-trained green construction jobs. The first training class were taught green construction skills while weatherizing the homes of seniors and low-income families. Trainees earned both accreditation and union wages, while also receiving health benefits.

Resources:
Good Jobs First - High Road or Low Road? Job Quality In the New Green Economy
Stimulus for Homes: Obama's $5 Billion Weatherization Plan
Focus on Weatherization Is Shift on Energy Costs
Government stimulus projects include wage requirements
Energy Costs, Conservation, and the Poor
Laborers Join Newark to Train Residents in Weatherization

Ensuring Green Jobs are Good Jobs

Green jobs are not simply band-aids to be used during difficult economic times, but are integral to our long-term economic growth. Therefore, while most of the conversations to date regarding green jobs have focused on the quantity of jobs, it is just as important to ensure that these new green jobs are quality jobs. Quality green jobs should be well paid, have benefits and be career track jobs. According to Good Jobs First, by creating good green jobs, we can address not only plummeting unemployment rates and climate change issues, but also combat deeply rooted social problems, such as poverty and inequality.

Strategies for Creating Quality Jobs: The fact that many of the companies that will be pivotal in building our clean energy economy receive taxpayer support, either directly or indirectly, can be used to encourage more employers to embrace strong labor protections. Good Jobs First has outlined numerous actions state and federal leaders should consider to ensure that green jobs are good jobs, including:

Attach self-sufficiency wage requirements to subsidies;
Apply wage standards to government contractors;
Strengthen prevailing wage requirements;
Adopt best value contracting;
Expand the use of project labor agreements;
Add labor standards to LEED standards;
Use claw backs to ensure job quality standards;
Use web-based disclosure.

Providing Training So Residents Can Participate in a Clean Energy Economy: The speed in which the U.S. can transition to a clean energy economy will be impacted by the skill-level of the country's available workforce. Although many green jobs will require workers either to transform their job skills so that they can be utilized by new industries or to obtain new skills, with well-structured training programs green jobs are accessible to individuals with less developed skills. Therefore, in order to ensure that residents have the skills necessary to obtain good paying green jobs, states need to invest in workforce development and worker training programs. The first step to crafting green job training programs is for states to identify the actual skills that their clean energy economy demands. Once a state identifies the skills that will be needed for their green economy, they need to develop or revamp training programs so that they prepare a qualified workforce.

State green job training programs should aim to, among other things:

Create region and sector specific economic development that is locally sustainable. In determining high-demand industries to invest in, it is imperative to use good labor and industry data.
Measure and evaluate performance to determine the success of programs and identify areas where improvements could be made.
Build partnerships between industry, labor groups, government and communities that can help guide workforce development and tie training to practical experience.
Tie economic development to community development. Develop career pathways that provide workers with accessible training in manageable increments that will help them acquire better jobs with higher wages and better benefits. Training programs should be created in a manner that accommodates family obligations and other challenges.

Some states and cities have already developed coordinated workforce development and training programs for green jobs.

In 2008, the Governor of Washington submitted legislation that in part created a green jobs initiative. Three components of the legislation included a detailed analysis of the labor market to determine the kind and quality of green jobs in demand, partnerships of key stakeholders to develop strategic plans for closing skills gaps for green jobs in specific industries, and the establishment of a fund to pay for training and other worker support. The Legislature approved the bill and while changes were made to the original legislation, the link it establishes between climate protection and green jobs provides a good model.
Oregon provides a good model for how states can implement within institutions and workplaces, education and training programs aimed at developing a skilled green workforce. Click here to read Opportunity Maine's Case Study of the Oregon program.
The Los Angeles Infrastructure and Sustainable Jobs Collaborative has created a Green Careers Initiative. The Collaborative brings together community partners, such as industry, unions, and education institutions, to create education, training, and workforce infrastructure that connects disadvantaged populations to good jobs.

Resources:
Opportunity Maine - Green Jobs Green Savings
Good Jobs First - High Road or Low Road? Job Quality In the New Green Economy
Center on Wisconsin Strategy, Workforce Alliance, Apollo Alliance - Greener Pathways: Jobs and Workforce Development in a Clean Energy Economy
Green For All - Washington State Climate Action and Green Jobs Bill
The LA Infrastructure and Sustainable Jobs Collaborative

Model Green Jobs Legislation

With increased focus on the environment, and in the aftermath of the ARRA, hundreds of green jobs bills were introduced in the states this legislative session. Below is a sampling of some model bills introduced in 2008 and 2009.

Washington has been a leader in the green jobs arena for the past couple of years. During the 2009 session, Senate Bill 5649 was signed into law. This law aggregates all federal Recovery Act dollars directed towards energy efficiency, and attaches labor standards. Community leaders, including those from faith-based organizations, non-profits, and unions, worked tirelessly on developing and passing this legislation alongside their state legislators. Among other things, the legislation puts Washington on the path to weatherize and otherwise make more energy efficient, 100,000 homes and buildings over the next five years. In addition, the law creates an Energy Efficiency Improvement Program, which will provide grants and technical assistance to neighborhood energy-efficiency projects throughout the state. The law also includes requirements that contractors employ workers from training and apprentice programs, pay prevailing wages, hire locally, and provide opportunities to veterans and low-income individuals. For low-income weatherization programs, the law prioritizes programs which provide career pathways out of poverty and into construction trades.

A 8377, introduced in New York, creates a Green Jobs Task Force, which will conduct a study of the state's green economy labor market needs, inventory training programs to identify gaps in existing programs, expand existing green jobs training programs, and target training towards disadvantaged populations through a variety of measures including ensuring access and establishing coordinated green career pathways.

In California, the California Energy Commission adopted the state’s first transportation Investment Plan. The Alternative and Renewable Fuels and Vehicle Technology Program's Investment Plan allocates $176 million over the next two years to stimulate green transportation projects and encourage innovation to help meet the state's aggressive climate change policies. The Alternative and Renewable Fuels Vehicle Technology Program was established by AB 118, which authorizes the Energy Commission to provide approximately $120 million annually over seven years to develop these new fuels and technologies and ensure that they are accessible to the public, and encourage motorists and fleet operators to purchase new advanced vehicles. According to a release by the California Energy Commission, in its newly adopted Investment Plan, the Commission proposes to increase the use of low carbon fuels and cleaner vehicles as well as develop a market for more exotic technologies that will be used in the future. Further, the Commissions plans to invest "$46 million for electric vehicles, public charging stations, and manufacturing plants; $40 million for hydrogen fueling stations; $12 million for advanced ethanol fuel production facilities and E-85 fueling stations; $43 million for natural gas vehicles, fueling stations and biomethane production facilities; $6 million for advanced renewable diesel and bio diesel facilities; and $2 million for propane vehicles," over the next two years. The Investment Plan also "directs $27 million go to fund workforce training programs, research, public education and technical assistance programs."

In 2008, Governor Deval Patrick of Massachusetts signed HB 5018. The Green Jobs Act created the Massachusetts Clean Energy Technology Center to serve as the state’s lead agency on the green economy. The Center will focus on stimulating clean energy sector jobs, promoting job training, and conducting research to identify clean energy industry barriers and job training needs. The Act also established the Alternative and Clean Energy Investment Trust Fund to stimulate green economy growth in the state. According to Green for All, under the Act the Secretary of Energy and Environmental Affairs is authorized to use $1,000,000 from the Fund in fiscal year 2009 for:

A seed grant program for clean energy companies, institutions or nonprofit organizations;
A workforce development grant program to award grants to universities and colleges, vocational technical schools or community-based organizations with existing or potential workforce development programs in clean energy;
A pathways out of poverty initiative to award five competitive grants to clean energy companies, community-based nonprofit organizations, educational institutions or labor organizations for training programs that lead to economic self-sufficiency.

Resources:
Washington Senate Bill 5649 New York AB8377
California Energy Commission Adopts Far-Reaching Green Transportation Plan
California Energy Commission Adopts $176M Green Transportation Plan
Green For All - Massachusetts Green Jobs Act of 2008

Conclusion

Building a clean energy economy and investing in green jobs will improve our economy and environment as well as provide unemployed and low-income workers an opportunity to obtain good jobs. By structuring green jobs correctly, we can rebuild our middle class and incorporate economic development with community development.

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Washington State Legislature Passes Legislation Aimed at Increasing both Access and Adoption of Broadband

PSN — Thu, 30 Apr 2009 17:10:00 +0000

With the passage of HB 1701 the Washington State legislature once again demonstrated its understanding that when combating the digital divide states must not just address access issues, but must also focus on dealing with the barriers to broadband adoption by individuals. In addition to hoping to increase high-speed Internet access for residents, businesses, educational institutions, public health and safety services, local governments and community organizations, HB 1701 also lists a menu of the types of digital inclusion programs that should be implemented in Washington State. By addressing both access and adoption barriers directly Washington State hopes to ensure that all residents can be active participants in our 21st century digital society. According to Jonathan Lawson, Executive Director of Reclaim the Media, "connecting all our communities with fast broadband is a compelling public need -- to allow everyone to take part in our digital democracy, culture and economy. This new legislation clears a path for us to follow towards that goal."

Broad Coalition in Support: The bill originally sponsored by Representatives Hudgins, Hasegawa and McCoy and incorporating amendments championed by Senators Kohl-Welles and Kastama was supported by a broad coalition of advocates, such as the Communication Workers of America (CWA), the Communities Connect Network and carriers and includes investments in digital training and inclusion programs. According to CWA's Washington State Council Political Director, Gail Love, "the broad coalition of organizations that lobbied on behalf of HB1701 has not always viewed issues from the same perspective. However, on HB1701, we found common ground. Bringing high-speed broadband accessibility to the residents of Washington will enhance their lives socially and economically and will bring jobs and new business to our region."

Capitalizing on Recovery Funds: The legislation was drafted, in part, so that the state could capitalize on the approximately $7.2 billion in the ARRA earmarked for broadband initiatives. Aside from authorizing the Governor to take steps to carry out the purposes of the broadband provisions in the ARRA, HB 1701 has three major provisions: a data collection and mapping initiative, the establishment of the Community Technology Opportunity Program, and the reconstituting of the state's high-speed Internet working group.

Collection and Mapping of Access and Adoption Data: HB 1701 designates the Department of Information Services (DIS) as the eligible entity in the state to apply for funds under the federal Broadband Data Improvement Act. In addition, the bill directs DIS to develop a map of where broadband services are and are not currently available in Washington State and "to work with other agencies to identify the communities most in need of new or additional broadband Internet services." Specifically, the legislation states that depending on the availability of federal or state funding, the department may develop an interactive web site to allow residents to self-report whether high-speed Internet is available at their residence and at what speed; may conduct a detailed survey of all high-speed Internet infrastructure owned or leased by state agencies; and is authorized, through a competitive bidding process, to procure a geographic information system map detailing high-speed Internet infrastructure, service availability, and adoption. The department may either contract for and purchase a completed map from a third party or work directly with the federal communications commission. In addition, the department may prepare regular reports that identify the geographic areas of greatest priority for the deployment of advanced telecommunications infrastructure and a detailed explanation of how federal funding for broadband mapping, deployment, or adoption will be or has been used.

One concern advocates voiced regarding the bill is that data collected from private providers will be considered 'proprietary' information and therefore not accessible to the public. Advocates in the state and nationally argue that such an approach lacks transparency, leaves the public unable to verify the collected information, and public policy researchers unable to access the date necessary to study which broadband policies are most effective. On a positive note, however, the legislation does establish an important accountability and oversight structure to ensure that there is transparency in the bidding and contracting process and full financial and technical accountability for any information or actions taken by a third-party contractor creating the map.

Digital Inclusion: The legislation recommits Washington State to addressing broadband utilization barriers by moving the Community Technology Opportunity Program (CTOP) under the Department of Information Services. The CTOP uses a competitive grant program to encourage broadband adoption in low-income and underserved areas of the state. Initiatives facilitated by the program include Internet adoption, training, and skill-building opportunities; access to hardware and software; digital inclusion and digital media literacy; development of locally relevant content; and delivery of vital services through technology. The CTOP will also provide organizational and capacity building support to community technology programs throughout the state. According to Betty Buckley, executive director of Communities Connect Network, a national leader in promoting digital inclusion programs and creating state demand-side policy, "HB 1701 takes another significant step forward in building the policy framework for how our state will ensure digital inclusion for all. Passing this bill in the current economic climate speaks volumes about the strength of the multi-faceted broadband coalition we’ve build here in Washington State."

Reconstituting the State's High-Speed Internet Working Group: The law allows for the continuation of the high-speed Internet working group, under the new title, the Council on Digital Inclusion. As the council's new name denotes, the group will now focus on broadband adoption, not just deployment issues. The Council on Digital Inclusion will have representatives from government, educational, public health and industry sectors, and will advise DIS and further strategize about expanding broadband deployment and adoption across the state.

Resources:

House Bill 1701
Increase Technology Literacy and Inclusion
Reclaim the Media
Community Connect Network

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Averting Layoffs and Revitalizing the Manufacturing Economy: Lessons from the Great Lakes States

Nathan Newman — Mon, 05 May 2008 15:00:17 +0000

As the country enters into a recession and suffers increasing job losses, the Great Lakes Region is facing a particularly acute crisis. Literally millions of decent-paying manufacturing jobs have disappeared from the region in recent years. How regional political leaders are responding to that crisis provides lessons for state policymakers across the country.

On April 17th, government officials, labor leaders, and policy organization staff came together in Cleveland for the Great Lakes Regional Economic Revitalization Summit to share insights on what their states are doing to avert layoffs and revitalize their economies.

The Great Lakes Manufacturing Crisis: Since 1998, the Great Lakes states have lost 1.5 million manufacturing jobs, due both to recession and chronic trade imbalances. Just since 2005, the Big Three automakers have announced another 1/2 million new layoffs, mostly in the region.

Add in the subprime mortgage and foreclosure crisis that has devastated communities and a private equity market that has "stripped and flipped" many industrial firms of key assets and abandoned their local employees, and you end up with a hollowing out of the economic vitality of communities across the region.

The loss of manufacturing jobs is critical, since it is often the heart driving other service jobs in the United States. Manufacturing is often the lead purchaser of new technology, financial and technical services, and, for workers, has most often been the key economic ladder for young people and people of color.

The flip side is that as job opportunities recede, communities suffer. For every 1% rise in unemployment, the nation sees an additional 36,887 deaths, 648 additional homicides, 4,227 admissions to mental hospitals, and 3,340 additional state prison admissions. Mass job losses create stress on both families and communities.

Policy Innovation in the Region: But that's only one side of the story in the Great Lakes region. The other is the incredible policy innovation rippling through states across the region, as government, labor, business and community leaders have developed new programs to revitalize their economies. Many are in their early stages, but there are important lessons for all states struggling with how to deal with job losses and, more importantly, think about how to avert them in the first place.

Policy leaders coming together at the Cleveland Summit outlined programs throughout the Great Lakes regions that are giving hope to workers and communities, from rapid response networks to help workers during layoffs, early warning programs to avert layoffs in the first place, new industry partnerships to help whole sectors revitalize themselves in the face of global competition, and policy programs to promote high road manufacturing and a greening of the regional economy.

Progressive State Network joined participating staff from other policy organizations including the National Employment Law Project, Policy Matters Ohio, Keystone Research Center, Fiscal Policy Institute, Steel Valley Authority, Center for Economic and Policy Research, Economic Policy Institute, Brookings Institution , Apollo Alliance, and Center on Wisconsin Strategies. Labor representatives from Illinois, Michigan, and Ohio attended, as did workforce and economic development public officials from Ohio, Michigan, Pennsylvania, and New York.

This Stateside Dispatch is designed to share some of the insights and resources developed out of that Summit for state leaders across the country looking to avert layoffs and more broadly revitalize their economies. The National Employment Law Project (NELP) is hosting a detailed list of resources from the summit.

More Resources

Developing a Rapid Response Program for Layoffs

As Lynn Minick of the National Employment Law Project outlined in his Rapid Response Training Overview, the most basic program states need in place is a rapid response policy to identify the causes of job losses, rapidly intervene to help laid off employees with services, and explore ways to preserve the jobs threatened.

The key to helping workers facing layoffs is to get help to them as early as possible and help them regain employment as quickly as possible. Most rapid response programs are established under the umbrella of the federal Workforce Investment Act (under under section 134(a)(1)(A)) and Minick outlined key rapid response steps:

Make the earliest intervention possible, including layoff aversion where possible (see next section).
Establish on-site contact with employees and their representatives.
Provide information and access to employment and training activities, including assistance with Trade Adjustment Aid and other income sources.
Create labor-management committees to implement a strategy for helping dislocated workers.
Provide emergency assistance tailored to a particular closure or mass layoff.
Help communities develop a coordinated response, including Community Adjustment Committees.

Minick cited the example of Ohio's Rapid Response System which, along with coordinating services for laid off employees, engages in layoff aversion strategies such as exploring options of employee buy-outs and sale to other parties, assisting with new business financing, and restructuring the business. The program uses "pre-feasibillity studies" to bring in consultants to explore whether alternatives to layoffs are viable or whether efforts should focus on rapidly helping employees find new employment.

Creating a PEERS Program: A particularly effective approach to helping laid off employees are Peer Networks, where employees are trained to help fellow employees during these transition crises. John Kreucher from Michigan's Human Resource Development Institute outlined the success of that program, established by the Michigan AFL-CIO in 1982, as it has become the largest independent provider of dislocation services in the state.

The PEERS program is designed to train a group of workers in any workplace facing layoffs to:

collect information on employee needs,
work with their peers in the workplace to help them connect with community services,
find job referrals and prepare resumes, and
work with community leaders to plan cooperative responses.

Employers help the Peer to Peer systems operate by providing release time to workers trained in the program to use part of their final weeks at a company working with fellow employees, while the program itself keeps them on payroll after the layoffs are fully implemented.

Reforming the Unemployment Insurance System: To make these programs most effective, states in many cases need to upgrade their unemployment insurance policies to address challenges in the new economy. Helpful policies range from streamlining application procedures to expanding coverage for many part-time and contract workers currently excluded from those programs. The National Employment Law Project has extensive resources supporting such efforts at their Unemployment Insurance Safety Net Project.

More Resources

Layoff Aversion: Early Warning and Industry Partnerships to Avert Plant Shutdowns

As Tom Croft of the Steel Valley Authority (SVA) argued in his talk, Early Warning and Layoff Aversion, it is "easier and less costly to save an existing local firm than to create a new business or attract one from outside." The trick is to identify firms needing help before they reach a final crisis and give them the support needed.

Croft and his colleague Scott Smith described one model, the Strategic Early Warning Network (SEWN), created by SVA under a mandate from the State of Pennsylvania back in 1993 -- an approach that has helped save 600-700 firms and created over 14,000 jobs.

Early Warning Monitoring: The key is not to wait for a mass layoff notice, but to establish programs that monitor key sources of business information for economic danger signs that can predict plant closures -- and proactively allow states to reach out to firms in trouble and implement response and prevention strategies.

Sources of information officials should tap include loan deliquencies, bankruptcy filings, business tracking by firms like Dun & Bradstreet, company annual reports, utility company reports detailing drops in power usage, and referrals by individuals, including union officials, company vendors, managers, and local elected officials.

Core Retention Steps: SEWN works with firms on everything from financial restructuring to dealing with owner succession issues to cost management to promoting new labor-management cooperation to improve productivity.

An example cited was a recent effort to target a large number of small auto suppliers in the state, employing 23,000 workers in Pennsylvania, who SEWN knew would be facing a crisis with the large scale cutbacks by the Big Three automakers.

To encourage firms to participate Governor Rendell signed a personal letter to 510 firms, which was followed by 385 calls by SEWN, aimed at firms impacted by the auto downturn.
Firms were offered marketing and product development help, turnaround assistance, incumbent worker training, participation in an industry partnership.
SEWN worked with 38 auto-related companies and an additional 25 non-auto firms referred to the state through the process.
Firms needed help on improving productivity, new product development, joint marketing, and energy conservation.
SEWN also worked on the sale and buyouts of the firms, succession and leadership planning, and improvements in productivity.

Using Worker Capital to Assist in Layoff Aversion: Croft highlighted the fact that employee pension funds represent $10 trillion of capital in the U.S. States can promote "economically-targeted investments" (ETIs), that coordinate with pension funds to fill capital gaps, build a stakeholder voice in companies, rebuild infrastructure, and reposition a region for new industries and growth. In 1995 SVA and Steelworkers launched the Heartland Working Group to find ways to use labor union pension plans to retain and create good jobs, including publishing Working Capital: The Power of Labor's Pensions. SVA will soon be publishing an update about responsible investment funds across the region that are helping to build affordable housing, promote green buildings, promote advanced manufacturing industries, build clean-tech industries, and support urban revitalization. Public policy can help by supporting the building of pools of capital investment across regions and linking building projects to supply chains to support regional industries.

Industry Partnerships: Stephen Herzenberg at Keystone Research Center laid out an additional component of the model in his talk, Pennsylvania's Industry Partnership Strategy. Beyond short-term interventions, Pennsylvania has built 90 Industry Partnerships (IPs) to promote longer-term strategic cooperation among regional firms:

About a third of the Industry Partnerships (IPs) are in advanced manufacturing and other manufacturing sectors.
The IPs are coordinated by Workforce Investment Board staff, non-profits, industry associations and labor organizations.
The IP program has engaged more than 6000 businesses.
About 18 of the IPs include labor unions as equal partners in their operations.
Main goals have been to connect training and education to the needs of industry sectors, help companies adopt high-performance organizational approaches, and expand opportunities for workers in those industries.

The industry partnership program has been supported by $5 million in state funds to identify industry clusters and build the IPs in the first place, plus an additional $15 million for training through the IPs.

More Resources

Revitalizing Manufacturing in the United States

Although conventional wisdom says that manufacturing is doomed in the United States, such thinking ignores both the continuing core dependence of the economy on manufacturing as an engine for service and financial jobs, along with the vitality of manufacturing in many sectors.

The Continued Vitality of Manufacturing: Susan Helper from Case Western Reserve University laid out these principles in her talk, Helping manufacturing can help the rest of the economy. (See also her paper at the Agenda for Shared Prosperity page, Renewing U.S. manufacturing).

The reality is that a large percentage of U.S. manufacturing plants are cost-competitive or within 10% of the costs of low-wage countries. How do they compete?

First, direct labor costs are usually only 5-15% of overall costs.

High skill labor and collaborative supply chains and regional clusters of firms can increase competitiveness.

Local manufacturing can avoid the costs of long supply trains and communication difficulties of far-flung subcontracting.

The counter-intuitive lesson is that to be competitive, U.S. firms won't win by lowering wage costs but only by creating long-term investments in a high-skilled and dedicated workforce.

Policy to Promote High Road Production: Because high road production is based on a shared pool of skilled labor and a set of collaborative institutions to support high-performance industry clusters, public policy is needed to address chronic market failures where firms lack the individual incentive to invest in those shared public goods.

One key problem is that 90% of manufacturers report a moderate-to-severe shortage of skilled production employees, while 65% report moderate-to-severe shortages of scientists and engineers. That highlights the need for more public focus on policies that teach workers and manufacturing leaders key skills, promote research and development, and support collaboration where skills can be shared. One example is Wisconsin, which has brought together agricultural and garden equipment manufacturers to organize classes, focus on lead time reduction, and highlight top-performing suppliers.

The flip side of promoting high road production is "cutting off the low road", i.e. preventing low-wage firms from benefiting from public investments and workforce trainings, while not paying their fair share of taxes or reinvesting themselves in decent wages.

The Chicago Manufacturing Renaissance Council Model: Dan Swinney, executive director of the Chicago Manufacturing Renaissance Council, highlighted in Building Chicago as a High Performance Manufacturing Region how this collaboration of regional industry, labor and community leaders are aiming to make the Chicago Metro region a global leader in high productivity, high wage jobs.

12,000 manufacturing companies are in the Chicago Metro area, employing 484,000 people and a total of nearly 1.8 million jobs associated with manufacturing -- good jobs paying an average wage of $64,000.

One key focus of the Council is upgrading the production skills of the next generation of manufacturing leaders, symbolized by the establishment of the Austin Polytechical Academy for high school students in Chicago. This is NOT a trade school but a school designed to lead to skilled production positions, management and ownership positions for its graduates. It has 37 company partners, mostly small private manufacturing companies who provide internships and summer jobs for all students.

The Council is also working with the City Colleges of Chicago to match manufacturing programs with industry needs and integrate education curricula with industry-recognized credentials.

Building the High Road in New York: Bruce Herman from New York's Department of Labor highlighted new efforts in that state to remake its disjointed set of job subsidy, employee training, and wage enforcement programs into a more coherent policy to promote high road job growth. Those efforts include:

Reforming tax subsidy programs to create more accountability and transparency in requring the creating of high-wage jobs.
Using wage enforcement crackdown against low road employers, including a multi-agency taskforce to crack down on misclassification of employees as independent contractors.
Expanding apprenticeships, including pre-apprenticeships for youth in low-income and communities of color.
Promoting multi-firm partnerships to revitalize industry sectors.

More Resources

Greening the Economy to Revitalize Manufacturing

One theme that was a thread throughout talks at the Cleveland Summit was the opportunity to use the challenge of addressing climate change and fuel costs to revitalize manufacturing in our country. Susan Helper noted that a focus on energy sustainability, such as a goal of renewable capacity to meet 25% of U.S. electricity, would create new manufacturing demand that could employ 925,000.

Labor's Role in the Green Economy: Bob Baugh of the AFL-CIO's Industrial Union Council outlined the labor movement's commitment to that goal in his talk, Greening the Economy, which outlined a few key principles:

A Green Economy should be tied to the goal of improving workers' rights, fair trade rules, and rebuilding manufacturing with full employment goals.
There needs to be strong domestic investment to capture new green technologies for export.
We need to cut green house emissions from existing coal and other fossil fuels, while ramping up renewable energy, energy efficiency, advanced auto and other green technology.
Public policy should concentrate on building the full domestic supply chain in green technology, including upgrading training to create a supply of trained employees for new green industries.

Green Public Policy: Kate Gordon from the Apollo Alliance highlighted that green tech is a growth industry, one of the few in 2007, which can be supported by a range of policies outlined in the new Greener Pathways: Jobs and Workforce Development in the Clean Energy Economy report, produced by Apollo in association with the Center on Wisconsin Strategy and the Workforce Alliance.

Public policy can leverage the large amounts of private money coming into green industries, but Gordon cautioned that failure to take advantage of this opening could lead to that capital flowing overseas. States have a number of tools at their disposal, including:

Regulating carbon markets,
Using green procurement rules to spark new investments in green jobs,
Assuring that the power grid and transit systems efficiently connect people and firms within regions, and
Promoting green workforce development, the recent Washington State green jobs bill being a good model.

A Regional Strategy for Sustainable Growth: Regions need to assess how to collaborate to create a green jobs strategy. Both Joel Rogers from the Center on Wisconsin Strategy and John Austin from the Brookings Institution emphasized that the Great Lakes region has the natural assets to thrive in the new green economy, with its combination of natural resources, existing manufacturing capacity, research and development capacity, and good rail and water transit systems.

John Austin noted that many analysts forget that early research on the Internet and the World Wide Web was done at Great Lakes Region universities like University of Illinois and that the region still is an innovator in technology and manufacturing. The Great Lakes region was also the birthplace of public investments in land grant colleges and great public institutions that fueled economic development over centuries.

Joel Rogers highlighted the challenge of coordinating economic development and assuring that the physical infrastructure is organized to take advantage of the assets in a region. Promoting smart growth is therefore a key economic imperative, along with other public investments in regions, from health care to high-speed broadband to renewable energy.

More Resources

Conclusion: Lessons from the Cleveland Summit

If there was a common theme by participants at the Summit, it is that too many programs -- from unemployment insurance to workforce development to tax subsidies to transit investments -- are pursued in too disjointed a way. States need to bring together government officials, industry leaders, education officials, and labor leaders to bridge gaps in these policies and create a more integrated approach.

Pierrette Talley of the Ohio AFL-CIO had opened the Cleveland Summit pointing to the need for Ohio to preserve its strength in manufacturing. Recognizing that problem, Governor Ted Strickland this February proposed a new program, Building Ohio's Jobs, a $1.7 billion jobs stimulus plan that would bring together workforce development, green energy job creation, infrastructure investments, and revitalization of urban areas -- an example of the integrated approach badly needed by more states.

A key challenge for state governments is not only to integrate those policies within their states but to work collaboratively with other states in their regions and with the federal government to strengthen regional industry supply chains and targeted financial investments.

Despite the often grim economic news in many states, the incredible policy innovation flowering in those same states gave participants at the Summit strong optimism that manufacturing would remain a vital economic engine and that communities are taking action to seize the new opportunities in the greening of the economy.

More Resources

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