U.S. Jobs and A Low-Carbon Supply Chain

Manufacturing Climate Solutions was commissioned by five sponsors: Environmental Defense Fund, the Building and Construction Trades Department (AFL-CIO), Industrial Union Council (AFL-CIO), International Brotherhood of Boilermakers, and United Association of Plumbers and Pipefitters. The research focused on LED lighting, high-performance windows, auxiliary power units for trucks, concentrating solar power plants, and super soil systems (which treat hog wastes).

On March 2, the Environmental and Energy Study Institute (EESI) and the Business Council for Sustainable Energy (BCSE) held a briefing on the significant potential for US job creation presented by low-carbon technology supply chains. Technologies that reduce carbon emissions represent a potential win-win solution to the urgent challenges posed by the financial crisis and by climate change. Numerous studies are suggesting that with policies that support the burgeoning energy efficiency and renewable energy industries, the United States can take a leadership role in the global economy and create millions of “green jobs,” especially in the manufacturing and construction sectors.

This briefing focused on a new report – Manufacturing Climate Solutions – prepared by the Center on Globalization, Governance & Competitiveness at Duke University. The report analyzed five carbon-reducing technologies, broke them down into materials and components, mapped out the locations of companies in the supply chain, and identified their impact on US job opportunities. Representatives from four companies working in the fields of renewable energy and/or energy efficiency discussed job growth potential from their business perspectives.

• Rep. Van Hollen opened the briefing by calling for US leadership in clean energy. “We have been behind the curve for too long. Instead of being the caboose [on energy innovation], let’s once again be the locomotive.”
• 50-70 percent of the economic value in carbon-cutting industries is in the supply chain. For example, more than 8,000 parts go into a wind turbine, by conservative estimates, including lots of steel fasteners. Cardinal Fasteners, a company that specializes in large, precision bolts—just bolts, they don’t even make the nuts for their bolts—received an order to help fill 29 wind towers, and they are now rapidly expanding staff.
• Auto manufacturing equipment and workers are well-suited to making large, precision parts. For example, Dowding Industries in Michigan is shifting attention to wind manufacturing.
• Chinese Olympic organizers had to come to the United States to find the right LED company to create the spectacular effects at the 2008 Olympics. Cree (the company chosen for the 2008 Olympics) grew from 1000 to 3000 employees between 2002 and 2008. There are more than 300 LED suppliers across the country.
• Companies like Wal-Mart represent the important “demand” side of the equation through their sourcing and procurement. Wal-Mart has set ambitious sustainability goals but cannot achieve them without adequate number of suppliers.
• Three units of energy are used to generate one unit of power, meaning only 33 percent efficiency. Dick Munson said, “Waste is a business opportunity,” and his company helps manufacturers turn waste heat into electricity. As an example, a steel smelter in Indiana now generates 220 MW of new energy with no new fuel or new pollution and saves $100 million annually.
• Energy from moving water involves highly-trained workers such as experts in computational fluid dynamics. Currently, a majority of applicants for these jobs are from outside the United States.
• United Solar Ovonic’s thin-film solar technology business has grown 400 percent since 2006. Thin-film solar requires no land and no transmission lines.
• Photovoltaic technology was invented in the United States, but 90 percent of manufacturing for the industry and 80 percent of the sales market is currently outside the United States.
• The greenhouse gas reducing industries analyzed in Manufacturing Climate Solutions are cost-positive on their own, but a price on carbon will allow companies to capture value for services they provide but do not generate revenue.