Climate 411

Growing Jobs, One Auto Supplier at a Time

Last week, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) jointly announced new clean car standards that will benefit America’s economy and our environment.

The standards mean that by 2025 new cars on U.S. roads will average an unprecedented 54.5 miles per gallon.

Those same clean cars will also reduce the levels of dangerous climate pollution from auto emissions.  

Businesses in the auto supply chain are applauding.  According to Fred Keller, Chairman and CEO of Cascade Engineering

The new fuel economy requirements are an example of good regulation developed in the right way. By working with both industry and environmental interests, regulators were able to come up with standards that provide the right incentives and get the right results without putting an undue burden on industry. What’s more, the resulting incentives are positive, as they will encourage manufacturers to develop lighter-weight vehicles and reduce demand for fossil fuels. I recognize it is not always easy to develop regulation in this way, but this should serve as a model for how to do it effectively in the future.

Cascade Engineering has a growing automotive solutions group that focuses on acoustic insulators, chassis & powertrain components, and interior/exterior trim.  

Other companies are praising the new standards as well.

Nam Thai-Tang, Co-Founder and Executive Vice President of ALTe, said this:

ALTe applauds any effort to drive towards greater fuel efficiency in the transportation industry. We are encouraged by the new standards and expect that they will help companies like ours that are developing advance hybrid powertrain technologies for America’s vehicles. 

ALTe manufactures electric vehicle powertrains which are used to increase fuel efficiency and lower emissions.

The new clean car standards follow closely after the first-ever national standards for passenger vehicles, which applied to vehicles in model years 2012 to 2016.

The Administration says that, in total, its national program to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

A joint ACEEE-BlueGreen Alliance report found the standards also would create more than a half million jobs by 2030, including 50,000 jobs in auto manufacturing. (These projections are not surprising. Since the restructuring, auto companies have added 250,000 jobs.)

Fuel economy standards benefit American auto companies and the myriad of suppliers because they create certainty, establish the U.S. as leader in fuel efficiency, and provide incentives for innovation.

Unlike many other industries, the auto sector and its many suppliers can plan for the future knowing the regulatory playing field until 2025.

The new clean car standards stand as among the most progressive in the world, driving the U.S. to a leadership position in fuel-efficient vehicles and technologies–  and toward the opportunity to export everything from parts to final assembled vehicles. 

These rules reward innovation in every facet of auto technologies — from changes to traditional combustion engines such as new materials, electronics, engine re-design, and recirculation of exhaust gas to development of a new generation of electric vehicles, hybrid and fuel cell vehicles. 

Seifi Ghasemi is chairman and chief executive of Rockwood Holdings, the world’s largest producer of lithium and lithium compounds.

He responded to the announcement by noting that:

Rockwood believes that the US can be the world leader in a game-changing technological leap forward by making electric vehicles the cars of the future. 

Mr. Ghasemi further described how Rockwood is already expanding and adding jobs:

For the auto industry and battery makers to adopt this technology, they must have a secure and reliable supply of lithium compounds for advanced electric vehicles. To meet the need for these compounds, Rockwood recently invested more than $75 million in two expansion projects that expands the output of our Silver Peak, Nevada, and Kings Mountain, North Carolina, production facilities.  We expanded our Silver Peak site, which is the only US source of lithium raw materials, and we built and recently opened a state of the art battery grade lithium hydroxide manufacturing plant in Kings Mountain.  In addition, we completed a new Global Technical Center at Kings Mountain that will bring together engineers and scientists to perfect and commercialize advanced battery materials.  These investments provide several economic benefits, including the addition of more than 100 new manufacturing and research and development jobs.  These expansions also reinforce our long-term competitiveness in a vital, growing technology.

As the auto sector continues to demonstrate, strong environmental standards can work in concert with a vision for growth in industries across America.

Posted in Cars and Pollution, Clean Air Act, Economics, Energy, Greenhouse Gas Emissions, Jobs, News, Policy, What Others are Saying / Read 1 Response

Let’s Clear the Air: EPA Pollution Standards Will Create New Jobs While Protecting Public Health

Opponents of the Clean Air Act have been yelling that this law’s life-saving health protections are “job killers.”

Just for a moment, let’s ignore the fact that these regulations improve public health and safety and save our lives. It is untrue that these regulations kill jobs.

In fact, just two small parts of the Clean Air Act — EPA’s Cross-state Air Pollution and Mercury and Air Toxics rules — would together create nearly 1.5 million jobs over the next five years driven by new investments.

EPA’s new air pollution standards would limit sulfur dioxide, nitrogen oxide, mercury and other unhealthy pollutants that are in the air we breathe. Meeting the new standards, and lowering our air pollution levels, will result in investments in new pollution control equipment and power plants. It will also result in jobs for skilled professionals to do the work of installing and operating that equipment. That means jobs for electricians, plumbers, pipefitters, boilermakers, millwrights, iron workers and engineers – among others.

Among the economic beneficiaries would be the American companies that make pollution control equipment like scrubbers, dry sorbent injectors, and selective catalytic reducers. Take a look at this map:

Pollution Abatement Materials Companies


Click to view full-size map

The map is  by no means comprehensive, but it shows some of the companies in the eastern half of the U.S. that are poised to benefit under EPA’s rules.

A Case Study in Job Creation from Installing Pollution Control Equipment

Alstom Power’s James Yann testified before the U.S. Senate’s Subcommittee on Clean Air and Jobs in March of this year.

He described some of the jobs created from just one example of a pollution control technology – a wet flue gas desulfurization “scrubber” that is commonly used to remove sulfur and other air pollutants.

Dependent on the number of scrubbers ultimately installed, Alstom estimates that these clean air regulations will create a total of more than 150,000 jobs over the next five to six years of compliance work. That’s just for direct jobs. In addition, tens of thousands of additional jobs would be created along the supply chain.

Here’s more details to show how it works: 

  • Scrubbers consist of a large number of components including pumps, electrical equipment and wiring, controls, and emission monitors (among many others). Almost all of this equipment can be procured from sources in the United States.
  • Erecting a typical scrubber requires more than 2,000 tons of fabricated steel delivered to the site. This steel represents more than 40,000 man-hours of production.
  • Assembly of the scrubber requires the most man power and a wide variety of trade crafts, typically lasting up to 30 months and employing an average of 700 craft people during that period.
  • In total, a typical wet flue gas desulfurization project will provide the equivalent of about 775 full time jobs over the life of the installation project, not including jobs provided for all the equipment suppliers and delivery services involved in delivering materials and equipment to the site.
  • Scrubber systems require ongoing supplies to operate including ammonia, lime, limestone and activated carbon. Companies making these supplies will need to create additional jobs to meet the increased demand as a result of EPA’s clean air rules.
Posted in Clean Air Act, Economics, Energy, Jobs / Comments are closed

For Business, It’s Not Necessary to Delay the Clean Air Act

The Environmental Protection Agency’s (EPA) efforts to enforce the Clean Air Act are vital for our health, our children’s health, and the avoidance of the most dangerous and expensive consequences of climate change.

In spite of that urgency, some businesses are arguing for delay. They claim that new regulations will hurt jobs and the economic recovery. Extensive data refutes these claims, but perhaps the most credible counter-arguments are those made by businesses that disagree.

In a March 1 article in Politico Pro, reporter Darren Samuelsohn interviewed business leaders who “didn’t sound so thrilled” about legislation to pre-empt EPA authority:

“The leaders — from American Electric Power, NextEra Energy, Southern Co. and Dominion Resources — said to varying degrees that they support allowing the EPA to proceed on a ‘reasonable’ time frame on greenhouse gas rules for power plants, petroleum refiners and other major stationary sources.” 

The business community is not monolithic, of course. And it’s no surprise that companies that are innovative are often rewarded with long-term growth.

Recently, the ArcelorMittal steel mill in East Chicago, Indiana, built on-site energy plants to capture heat and gases. The mill reduced its carbon dioxide emissions by about 916,000 metric tons. That’s about the same amount as 166,000 cars and all of the grid-connected solar panels in the world. At the same time, the mill cut as much as $100 million a year in energy costs — and that allowed ArcelorMittal to allocate more money to jobs and investment. 

West Virginia Alloys, a silicon manufacturer, used a similar project to capture waste heat and generate enough electricity on-site to power one-third of its furnaces. The project reduced carbon dioxide emissions by almost 300,000 tons – and at the same time, enabled the plant to increase its workforce by 20 percent.

Companies that fear change typically spend their time and energy fighting change – not on finding the most strategic responses to changing business conditions.

McKinsey and Company and the Department of Energy (DOE) are among those who have collected data showing the plethora of untapped efficiency opportunities being ignored by American industry today. (See some of that data, and helpful case studies, at

Here are some highlights:

  • McKinsey found that the U.S. industrial sector can reduce annual energy consumption 18 percent by 2020 and save more than $442 billion in energy costs billion in major sectors such as refineries, chemicals, cement, iron and steel, pulp and paper, for an upfront investment of barely more than a quarter of that amount.
  • If the pulp and paper sector, alone, seized the economically attractive opportunities identified by McKinsey and Company, they could reduce energy use by 26 percent and save an estimated $2.6 billion per year.
  • Until recently, U.S. industrial plants didn’t know how energy efficient they were (or weren’t) compared to their competitors So the Energy Star for Industry program created a benchmarking tool to allow companies get that information. The results show that many plants have significant room for improvement. For example, the gap between the average plant’s performance and the best in class plant’s performance is 198 kilowatts per hour more electricity used per assembled vehicle. (That figure takes into account the differences in product, as well as plant capacity, utilization, and location). That’s about as much as what the average U.S. household  uses in electricity each week.
  • The University of Massachusetts’ Political Economy Research Institute looked at the impact on new EPA pollution control rules on the utility sector. They found that the new rules will drive an estimated 1.46 million jobs, or about 290,000 on average in each of the next five years. Other University of Massachusetts studies found that clean energy and energy efficiency are more labor intensive than spending on conventional fossil fuels.

Given over-capacity and capital on the sidelines, now is actually the perfect time to invest in making the current infrastructure cleaner, more efficient, more globally competitive, and ready for the recovery. Investing will be good for the workforce and for customers, and while shareholders may see a little less profit this year, they will see more in the long-run.

Businesses that insist they have to pollute do not represent all businesses. Lots of American businesses are already taking advantage of the opportunities in clean energy and energy efficiency.  If we support them, instead of the businesses that can only handle the status quo, we can create an economic recovery for the long-haul.

Posted in Clean Air Act, Economics / Comments are closed

Leadership, Innovation and Security: Benefits We Can’t Measure

The EPA analysis of the American Power Act released last week was reassuring in its conclusion that the economy can absorb a shift to low carbon energy, and that costs will be no more than a 40 cents a day for households. (The reason that costs phase in later is that allowances to utilities in the early years serve as rebates to consumers to allow for a transition period of no added costs.)

But, as the bill’s co-sponsor Senator John Kerry (D-Mass.) notes, while the costs are relatively easy to model, some of the benefits are not. Among those is the fact that APA is, in essence, a very cheap insurance policy against the real costs from droughts, floods, storms, oil spills and other consequences of unchecked climate change and continued reliance on foreign oil. By including a cap on carbon, APA offers a very cheap insurance policy.

And there are other significant benefits, too. A year ago today, President Obama’s Economic Recovery Advisory Board voted 15-1 in favor of submitting a memo to the president endorsing a cap on carbon, specifically:

“The single most important policy is to put a price on carbon. Businesses want the certainty that will unleash innovation and investment to create jobs now and ensure America is the worldwide leader of the next great global industry: sustainable energy. We are not on that path today.… “

The memo went on to note that we are ceding leadership in new energy technology to other nations.

“The U.S. is now home to only two of the ten largest solar photovoltaic producers in the world, two of the top ten wind turbine producers and one of the top ten advanced battery manufacturers. That is, only one-sixth of the world’s top renewable energy manufacturers are based in the United States. Last year, less than half the 8,500 gigawatts of wind turbines used in the U.S. were made in the U.S.”

A cap creates the customer demand that allows companies to build market share and move into export markets. The emerging clean energy market could be anywhere from $500 B globally by 2020 to a trillion.

Are we in? So far, not really. A home market attracts investment and helps build local manufacturing. For example, after FedEx pledged to buy low-pollution hybrid delivery trucks, vehicle manufacturers started producing them – and once cleaner trucks were on the market, other U.S. companies started buying them too. The U.S. now leads globally in manufacturing key components for hybrid trucks. In contrast, “after estimating that China would be producing two-thirds of the world’s solar panels by the end of this year,” the U.S. solar equipment supplier, Applied Materials, set up its latest solar research labs in China. Without a cap on carbon emissions, private capital sitting on the sidelines can easily go to other countries, creating jobs and export opportunities elsewhere.

America has demonstrated time and again that we are an innovative global leader when we put our minds to it. It’s time for us to commit ourselves, our minds as well as our dollars, to a clean energy future that will spur the new economy and encourage green job growth.

Posted in Climate Change Legislation, Jobs, Policy / Comments are closed

The Key to Creating Jobs: The Capital on the Sidelines

During President Obama’s speech this week at Carnegie Mellon University, he signaled emphatically that he would go after the votes to pass a clean energy bill this year, assuring that while “the votes may not be there right now… I intend to find them in the coming months… and we will get it done.”This is exactly the sort of presidential resolve that’s needed. The president went on to say,

[T]he only way the transition to clean energy will succeed is if the private sector is fully invested in this future – if capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed. And the only way to do that is by finally putting a price on carbon pollution.

He got it exactly right – investors are waiting to see what Congress decides. And once we do set a price for carbon pollution, a huge amount of money will be back in play to invest in clean energy.

This infusion of capital is critical to job creation. Every study that is done to assess job creation potential of the new energy economy builds off assumptions about how much capital will be devoted to energy efficiency, renewables, and the like. For example, the June 2009 University of Massachusetts report “The Economic Benefits of Investing in Clean Energy” assumed that the provisions of the House-passed American Clean Energy Leadership Act (ACELA), building on stimulus funds already committed, would bring $150 billion in new investment per year for the next decade – creating 2.5 million jobs. If that capital came 100% from the oil and gas sector, the net job creation (net of jobs lost in oil and gas) would be 1.7 million jobs.

While I believe some of that capital will come from diverting money from oil and gas, not all of it will. And, given unemployment numbers, there is quite a bit of capital sitting on the sidelines.

But don’t just take it from me, listen to a venture capitalist. In his testimony before the House Select Committee on Energy Independence and Global Warming, delivered April 2008, Mission Point venture capitalist Dan Abbasi noted:

We testified before Congress that we and other leading investment firms have mobilized billions of dollars from blue-chip investors with a mandate to invest in the decarbonization of our economy. And we stand ready to do much more if Congress passes a law to set some long overdue rules of the road.

A long-term stable price signal for carbon is imperative to encourage innovation and to promote investment. It needs to be long enough to reward investors for locking up their capital in asset-intensive, long lead-time energy projects and taking on the associated technical, construction and market risks. Moreover, only a long-term carbon price will motivate investment in the supply chain companies that must scale up and thrive if we’re to drive down the price of low-carbon energy.

While we’re finding some attractive investments today, candidly we are also holding back a lot of “dry powder” — or uninvested capital – and the economic downturn is only partly to blame. The biggest factor is continued uncertainty over whether Congress will pass a bill capping carbon. Renewable loan guarantees, grants and tax credits from the stimulus package are helping us to finance the supply of low-carbon solutions, but without a cap we won’t see the market demand needed to fully pull those solutions through.

In Europe, after the passage of their Emissions Trading System, the ETS, James Graham, Director of the Commercial Division for Camco International, noted that “If you look at the pricing for credits from renewable energy projects before and after the creation of the EU ETS, the pricing was much higher afterwards. Higher prices means more projects are happening. More capital is being allocated to investing in renewables because of enhanced returns from the addition of a carbon revenue stream to such projects.”

According to Clean Tech Venture Network, California saw a 20% compound annual growth rate in clean technology investments in 2002 after passage of a Renewable Portfolio Standard, but that jumped to 98% compound annual growth rate when AB 32 (putting a price on carbon) was introduced and passed 18 months later. (Clean Tech Venture Network data)

Last month, columnist David Brooks discovered capital sitting on the sidelines as well. If the American Power Act (the Senate version of comprehensive energy and climate legislation passes with a price on carbon) passed, utility executives noted just 4 weeks ago that they would move capital off the sidelines:

“Regarding wind energy investment at our NextEra Energy Resources subsidiary, we think we might invest about $1.5 billion to $2 billion more per year. Regarding solar, we think NextEra Energy Resources might invest $500 million or more per year outside of Florida and that our Florida Power & Light subsidiary might invest about $1 billion a year inside Florida.” — Lew Hay, chief executive of the power provider FPL Group.

“[NRG] could double the number of clean energy projects, from 17 to 36; it could triple the megawatts of clean generating capacity it is planning to add; it could produce three times as much nuclear power and 40 times as much coal with carbon capture and sequestration. — David Crane, the CEO of NRG Energy.

“The Renewable Portfolio Standard should be considered a short-term technique to “jump-start” a new industry but seen as a temporary incentive.  In contrast, monetizing carbon and placing a cap on carbon signals a major shift in the industry framework and provides a long-term market signal that is very different than the RPS approach,” according to BJ Stanbery, founder, Chairman and Chief Strategy Officer of HelioVolt, a Texas-based manufacturer of thin film solar.

Getting this capital off the sidelines and into clean energy projects is a clear path to job creation. But it’s not just about getting capital off the sidelines, it’s about keeping capital here in the U.S. Who can forget Jeff Immelt saying at a Wall Street Journal event in 2008 that “If the U.S. doesn’t buy my wind turbines, I’ll go to Turkey.” In this economy, we can hardly afford to have the next generation of energy projects shipped overseas. The U.S. can and should be a leader in clean energy, and with the right investment, we can make it happen.

Posted in Economics, Jobs / Comments are closed

Less Carbon, More Jobs

Jackie Roberts This was originally posted on Huffington Post

America is finally on the cusp of enacting a federal law to cap global warming pollution and the focus on how it will affect our economy has never been greater. When President Obama last week called on Congress to send him such a bill, he underscored the economic necessity of creating new jobs by reinventing our energy supply. Not surprisingly, longtime opponents of taking action argued that a cap will hurt business and consumers.

But the most important piece of this debate has largely been overlooked. Right now, tens of thousands of workers in hundreds of communities are poised to benefit from a nationwide cap on carbon emissions — and they’re right in our backyards.

When America caps its carbon emissions, manufacturing companies from coal country to the rust belt and beyond will see a surge of customers looking to cut pollution, reduce energy use and expand their use of renewables like wind and solar.

These are real companies with real employees in real American communities. And it’s time for their stories to be heard.

Take Dwayne Esterline of Eaton Rapids, Michigan. Dwayne spent 15 years manufacturing auto parts for everyone from General Motors to Daimler Chrysler. In June 2008, with the auto industry struggling, he took a chance and joined Dowding Industries. Dowding has been in Michigan for over 40 years, and they’d recently begun manufacturing large-scale machine parts for wind turbines.

Dwayne’s manufacturing background was a perfect fit, and he sees his story as a model for workers across the country.

“I look at the future of the wind industry, and this is a positive place to be,” he says. “It’s nice to be a part of something that’s growing and creating jobs. I think people in communities like mine need to reinvent themselves and apply their skills to the green energy revolution.”

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