Thursday, October 4, 2012

A Time to Empower Our Communities

by Daniel M. Kammen

The Pacific Northwest and the San Francisco Bay Area, where I live, are both areas where people are proud of their innovative local communities, their universities and the exceptional local natural beauty.  We are fortunate enough to live in areas that have a real opportunity to do something about the both the persisting economic doldrums and the growing threats to our local and the global environment.

Everyday the headlines bring home economic challenges and conflicts due to energy resources.  Conflicted agendas in the Middle East, the power behind Hugo Chavez, the Keystone pipeline, the current China-Japan tension over the Senkaku/Diaoyu islands, and so forth.  The list changes week by week, but the story is the same.  

What is most amazing is that while energy demand is growing at record rates in developing nations, we are not acting on the clear advantage we have in providing that energy in ways that benefit us all. Nobel Prize winning work has shown that technological innovation is central to economic growth and job creation.

So what do we do?  My laboratory in Berkeley publishes a regular update[1] on the job creation record of fossil fuel and renewable energy and energy efficiency industries, and that track record is clear: per dollar invested renewables and efficiency generate significantly more jobs than the fossil fuel sector.  That is not to say we don’t, at least for now, need a portfolio of options, but if we want to meet a vast and growing global need, and do so rapidly and cleanly, it is clear which sector can deliver the goods: clean and efficient energy products.  

Take solar power as just one example where US universities and industrial laboratories have been leaders for decades.

The capacity of the solar industry to create jobs is similarly clear-cut. My laboratory regularly reviews the actual job return on energy investment, and solar installation creates five or more times the number of jobs than a comparable natural gas power plant.[i]  And these jobs span a range of sectors.  Not only has the US solar industry produced more than 100,000 jobs (a doubling since 2009) with another 25,000 expected in the next 12 months, the vast majority of these jobs are in finance, services, and installation—not manufacturing.  Solar simply doesn’t provide a lot of manufacturing jobs in any country, and the number is dwindling further with automation.  That’s why blocking imports is the wrong move. Tens of thousands of Americans are employed across the country in the solar value chain, and are relying on quality solar panels from many nations, including, China for their jobs.  Any effort to lock out the competition will drive up panel prices and reduce sales, stunting domestic job growth and stifling innovation in the field as a whole.

Even Sen. Jeff Merkley of Oregon, one of the supporters of a petition ironically filed by German-based SolarWorld against Chinese solar panel manufacturers, has acknowledged that punitive tariffs against Chinese solar panels would immediately result in job losses to American installers in what he described as “short-term shock.” This begs the question of why the U.S. government would attempt to effectively pick technology winners from Germany by applying punitive tariffs against Chinese companies when what is needed is to encourage competition among all promising companies.

As tragic as the loss of Solyndra may be, some perspective is needed.  The federal loan guarantee program that supported Solyndra, as imperfect as it is, has actually done a better job in the difficult area of ‘picking winners’ than has Wall Street.

The reason for the drop we have seen in solar panel prices, which in-turn led to the downfall of Solyndra and likely others is quite simply scale of manufacturing.  A number of the larger solar manufacturers are now manufacturing solar panels on such a scale that they have brought the cost of solar down dramatically.

What is needed?  Clearly leaders in the public and private sector with true global expertise and vision can help identify these ‘best bets’.  More broadly, however, we need community partnerships that value new jobs and lifelong learning, and targeting the fast-changing energy sector is a great place to start.

Daniel M. Kammen is the Distinguished Professor of energy at the University of California, Berkeley, and will be the Feagle Lecturer at the University of Washington on October 8, as well as lecturing at Orcas Crossroads. From 2010 to 2011, he was the first chief technical specialist for renewable energy and energy efficiency at the World Bank, and is a member of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.


[i] These results are available in regular publications and free online modeling tools produced in my research laboratory that are widely used in the energy sector (