When Californians went to the polls on Nov. 2, they did more than just select a slate of new Capitol denizens. With the eyes of the world upon them, voters emphatically rejected Proposition 23, the oil industry-backed initiative to block Assembly Bill 32, the state’s groundbreaking effort to reduce greenhouse gas emissions. They also soundly rejected GOP candidate Meg Whitman, who opposed Proposition 23 but favored delaying AB 32’s implementation. In doing so, the law’s supporters say voters sent a strong message around the globe that the Golden State is decidedly going green.
Exactly how that will happen is still a work in progress. While the California Air Resources Board now has the green light to implement AB 32 and other greenhouse gas-reduction plans, what it means to the economy and, most important, to job creation, is yet to be determined. With California’s unemployment rate still hovering around 12.5 percent, will this deliver the tens of thousands of high-paying jobs AB 32 supporters claim it will produce? And if so, will there be enough workers with the necessary skills to fill those positions?
AB 32 advocates say that with Proposition 23 soundly defeated, California’s conversion to a green economy can finally move to the fast track.
“The question of whether we are committed to AB 32 and lowering our greenhouse gas emissions has been answered. We are,” says Steven Currall, dean of the UC Davis Graduate School of Management, who leads the green and clean technology portion of Mayor Kevin Johnson’s Greenwise Sacramento Task Force.
The state air board has been moving ahead with that presumption all along. In October, the agency released its official proposal to implement the nation’s first economywide cap-and-trade program. A final vote on its approval is set for the middle of December. The cap-and-trade program, if adopted, would eventually link with similar programs in New Mexico and four Canadian provinces. The previous month, the board set regional targets called for by Senate Bill 375, which requires local municipalities to factor greenhouse gas-reduction into their long-term growth planning. The board also adopted a renewable portfolio standard, which requires public and private utilities to acquire 33 percent of their energy from renewable resources by 2020.
But the renewable energy standard is not set in stone. Lawmakers narrowly missed passing legislation last session that would have codified the standard into law, leaving it to the board to enact the 33 percent figure via its own regulation. That could easily change under a new Legislature and governor. Some observers say lawmakers missed an opportunity to establish a viable long-term marketplace for renewable energy, one that could encourage investors by reducing the ambiguity that has surrounded that marketplace for years.
Jon Costantino, a former air board official who is now a consultant with the Sacramento office of Manatt, Phelps and Phillips, says the failure to pass a bill means “California’s electricity industry is left with a bare-bones administrative regulation” that doesn’t answer even the most basic questions surrounding the renewable standard, particularly about the program’s costs and efforts to contain those costs.
Those answers are critical as California employers try to get a handle on their future work force needs. As with most aspects of the greenhouse gas-â?¨reduction effort, there isn’t a consensus on what those needs are or what they will look like in the future.
While growing, that need appears to be minimal. According to the California Employment Development Department, approximately 500,000 Californians currently work some kind of “green” job. Those jobs have risen steadily over the past decade, growing by more than 35 percent since 1995. Even so, data from the California Department of Labor shows that green jobs still comprise only about 4 percent of the state’s overall employment.
Paul Feist, undersecretary of the California Labor and Workforce Development Agency, which has implemented several programs to help businesses and workers prepare for a green economy transition, says that figure could rise dramatically in coming years. But, he says, it will also require an even greater commitment from investors to make it happen.
“In the short term, we need more demand,” he says. “We need to spur greater investment in clean tech, so we can create the kind of demand for workers that creates jobs.”
Part of the issue is defining what constitutes a green job. Typically, green jobs are associated with the renewable energy fields, such as solar or wind power, or in industries such as recycling. But these days the definition is much broader. While some debate will likely always exist, green jobs are now generally defined as those that directly or indirectly work to minimize negative environmental impact and which require some kind of specialized skill, experience or training. Much to the chagrin of some observers, that could mean anything from installing insulation to issuing environmental permits.
That issue aside, there are undoubtedly signs that jobs in the traditional green fields are on the rise. According to data from Next 10, a San Francisco economic research firm, employment in core green-economy manufacturing expanded by 19 percent between 2005 and 2008, compared to an overall manufacturing employment drop of 9 percent. The National Solar Jobs Census 2010 also notes that overall solar employment in the U.S. doubled from 2009 to 2010, with estimates that industry employment will grow another 26 percent in 2011. The Census says that over the next 12 months, more than half of all U.S. solar firms expect to add workers while only 2 percent anticipate layoffs.
A recent report by the Washington-based Biotechnology Industry Organization estimates that industry could create up to 800,000 new jobs by 2022. Other studies show similar gains in hydropower, though not as much for wind power.
How many of those jobs will end up in California? It is hard to tell, but Proposition 23’s defeat is certainly good news to the clean-tech investors who could ultimately determine how many jobs these and other industries produce. According to Next 10, California’s clean-tech sector has received more than $11 billion in cumulative venture capital investment since 2006, by far the most of any state. That includes $2.9 billion in 2009. More data collected by the Clean Tech Group, which monitors the industry, shows that Massachusetts was the next largest U.S. clean-tech investment destination in 2009 at $356 million. Texas followed at $170 million.
But while California dwarfed the competition, that $2.9 billion also reflected a 38 percent decrease in clean-tech venture capital from 2008. Massachusetts’ total, on the other hand, reflected a 21 percent increase. Texas was up 93 percent.
Currall says California’s falloff was due to the uncertainty caused by the chance Proposition 23 or a new governor would derail AB 32. With that out of the way, he says, California should see a renewed boom in clean-tech investment.
“This is now a very unambiguous environment for clean-tech investors,” he says. “There is no uncertainty here anymore.”
Uncertainty has definitely not been an issue with the current gubernatorial administration, which has fostered several programs designed to train unemployed blue-collar workers for new green-collar jobs if and when they appear. In 2008, Gov. Arnold Schwarzenegger, one of AB 32’s backers, used $10 million in federal stimulus funds and another $10 million in public-private partnership money to create the California Green Corps, which trains at-risk young people for green jobs. He followed that up in 2009 with the creation of the California Clean Energy Workforce Training Program, another green job training program that uses a combination of federal American Recovery and Reinvestment Act and Workforce Investment Act funds and more partnership dollars.
Even with the availability of the federal funds, however, California Workforce Investment Board Executive Director Barbara Halsey says the state has taken a conservative approach to its efforts to help train workers for the new economy.
“We recognize that we need to be good stewards of the ARRA money,” she says. “These programs are expensive, so we want to be smart.”
Halsey says the state has focused on regional industry clusters, which entails working with business and education leaders around the state to identify what each of 10 regions will need for a green-collar work force. The goal, she says, is to understand how the state’s policies influence industries and their hiring practices and then develop regional training programs that are tailored to meet those areas’ specific needs. Much of that, she says, is “understanding what the incumbent work force is doing in traditional industries and understanding what that means for ‘upskilling’ those workers or providing them with new skills.”
That can be tricky, Halsey says, without a solid grasp of which industries will grow, at what speed and in what areas.
“The last thing we need in a recovering economy is for people who have been out of work or displaced to go through training in new occupations and then come out the other side and be unable to find a job,” she says.
Earlier this year, the Schwarzenegger administration awarded more than $2 million in grants designed to help each of the 10 regions identify their greatest needs and develop strategic plans for leveraging public and private funding to meet them. Locally, the Sacramento Employment Training Agency, which comprises El Dorado, Sacramento, Sutter, Yolo and Yuba countines, garnered $200,000 for its program.
The Schwarzenegger administration isn’t alone in pushing green work force training. California’s major education outlets — the community college system, the California State University system and the University of California system — all have green job training.
But many observers say these programs need to look beyond just training people in the basics of installing photovoltaic panels or enacting green building practices.
“You also need training in sales and marketing,” Feist says. “These are not the same old products and services, and people need to know how to sell them.”
He isn’t alone in that thinking. Hedge fund billionaire Tom Steyer, who co-chaired the anti-Proposition 23 campaign, announced in November that he is donating $250,000 to start a nonprofit that will, among other things, help train unemployed sales people to sell the merits of energy efficiency to commercial building owners. UC Davis’ Currall also notes the role business and law schools will play in turning out graduates for the green economy.
Still, to others this is all much ado about, if not nothing, then very little. Economist Robert Pollin, co-director of the Political Economy Research Institute at the University of Massachusetts, Amherst, says he isn’t buying all the talk of retraining and the need for acquiring broad new skills for workers of the future to fit in.
“Building a green economy will require the same type of skills as they have today,” he says. “We’re talking about some skill shifting, but not wholesale skill creation. That’s why I’m not comfortable with the term ‘green jobs’ in the first place. What you will have is a lot of people doing what they do already.”
For Pollin, the biggest building block in developing the green economy is mental.
“The most important thing for this to work is to get people to accept the notion that building a green economy is good, not bad,” he says.
That is exactly what Simeon Gant is trying to do. Gant is the director of Green Technical Education and Employment, a Sacramento nonprofit that offers high school students and young adults from economically challenged areas a chance to learn about employment opportunities in clean-tech industries. Gant’s two-year-old program is comprised of classroom training and workplace tours to see how these companies operate.
As with most young people, he says, some are more engaged from the beginning than others. Usually the most involved students have been in the program the longest and have learned the most about California’s efforts to lower its greenhouse gas emissions.
“With these kids, we really need to start with the reasons we as a society are making these changes,” he says. “When they understand what is going on with our environment, when they understand why this is something we need to do for our health and the health of the planet, then you have their attention. Then they’re more willing to do the work.”
If the election is any indication, the forces of a greener economy clearly have Californians’ attention.
If there is one thing a business owner hates, it is uncertainty. Planning for the future — or even managing the present — cannot effectively happen unless the person signing the checks knows the rules of the game. But when it comes to California’s efforts to reduce greenhouse gas emissions, uncertainty is about the only thing employers can count on right now.
For years, the debate over climate change centered almost exclusively on science: Is global warming occurring, and if so, are humans causing it? But with the economy still struggling, the argument has shifted to one of dollars and cents.