Published on March 10th, 2018 | by Jake Richardson0
Renewable Energy Has More Economic Benefits Than You Know
March 10th, 2018 by Jake Richardson
This article is part of our “CleanTechnica Answer Box” collection. In this collection of articles, we respond to dozens of common anti-cleantech myths.
Renewable energy is already cheaper than other energy options in most of the world, but it comes with other economic and societal benefits as well. Because of the number of countries investing in renewable energy, the complexity of their national economies and their energy infrastructure details, it isn’t possible to cover everything in one online article. The subject would be better addressed in a book. So, this article is intended only to be a snapshot of some key high-level points.
Jobs, Jobs, Jobs
The first point is that there are a huge number of people employed in renewable energy jobs globally. There are almost 10 million of them around the world. Slightly over 3 million are employed in solar power. Large hydropower employs about 1.5 million people, and 1.2 million are in wind power employment. Advanced energy — which includes solar, wind, energy efficiency, energy storage and EVs — contributed $1.4 trillion to the global economy in 2016. (The US portion of this amount was $200 billion.)
In the US, President Trump has jabbered on about the importance of coal jobs, but they actually aren’t all that significant when put in context. According to a Washington Post article, the US coal industry employs about 76,000 workers, which is less than many industries. For example, used car dealerships have a total of about 138,000 workers, casinos employ about 99,000 people, as do travel agencies. Museums, radio stations, and breweries and wineries all have more workers than coal does.
Shockingly, the Washington Post article leaves out renewable energy jobs. In fact, over 260,000 Americans are employed by the solar power industry, and that total blows away the number of coal jobs — it’s well over three times more! Imagine if strong solar power industries were stimulated in West Virginia and Ohio.
Easily beating coal again is the wind power industry, with over 100,000 jobs. Also, NREL published an article in 2017 stating that wind power technician was the fastest growing job in the country. Funny how Trump doesn’t mention that, and actually has a history of complaining about wind power and suing to try to block wind farms.
Another high-demand cleantech job is solar PV installer. According to the Bureau of Labor Statistics, the median pay for PV installers is about $39,000/yr. For the wind power service tech job, it is $52,000. Would you rather work outdoors in unpolluted air or in a coal mine breathing coal dust which may cause you to die prematurely?
Maybe President Trump should try coal mining. Nah, he’s too busy bashing wind power.
He might have noticed how dismal coal’s future looks and how bright it is for wind power. “To achieve 20% wind power by 2030, the U.S. Department of Energy estimates that the United States will require more than 100,000 additional wind turbines, creating more than 500,000 new jobs.” What was that … potentially 500,000 new wind power jobs?
So, if that estimate is accurate, there would be over 600,000 jobs in wind power just in the US. That figure might sound kind of nuts, but it has been referenced here as well. “According to the Wind Vision Report, wind has the potential to support more than 600,000 jobs in manufacturing, installation, maintenance, and supporting services by 2050.”
At the state level, the numbers look promising too, Texas alone may have 31,500 wind power jobs by 2020, Colorado could have 22,000, and Iowa about 17,000.
Another benefit is that wind turbines can be installed in rural areas at existing farms to provide much-needed income to local people. Here’s another fascinating example: “The report looked at the 23 largest wind farms in Illinois, finding that they will add almost $6 billion to local economies over their lifetimes and have resulted in the creation of more than 19,000 jobs during the construction periods. The projects will also support 814 permanent jobs in the state.”
The Union of Concerned Scientists made a great point in one its recent articles on renewable energy: “Compared with fossil fuel technologies, which are typically mechanized and capital-intensive, the renewable energy industry is more labor intensive. Solar panels need humans to install them; wind farms need technicians for maintenance. This means that, on average, more jobs are created for each unit of electricity generated from renewable sources than from fossil fuels.” That is true even when wind and solar power are cheaper for the customer.
An NREL document backed up this insight as well. “There are two main reasons why renewable energy technologies offer an economic advantage: (1) they are labor intensive, so they generally create more jobs per dollar invested than conventional electricity generation technologies, and (2) they use primarily indigenous resources, so most of the energy dollars can be kept at home.”
So, renewable energy can generate better jobs and more of them.
Another economic benefit — which doesn’t seem to get enough attention — is that renewable energy is scalable in areas where there is very little or no electricity. For example, there are over one billion people who don’t have access to electricity. Getting home solar power systems gives them access to something that can change their lives for the better. “Even in the poorest countries, solar’s flexibility is making it desirable. In Bangladesh, more than 3.5m solar home systems have been installed in rural villages.” (We covered that inspiring story in 2014: The Solar Energy Revolution Everyone’s Ignoring … Is In Bangladesh.)
How do you begin to quantify the value of giving electricity access to millions of people who did not have it? To put it simply, this benefit must be massive. Not having access to electricity puts many Africans in the position of having to buy kerosene, the economic effects of which can be far-reaching. “When added to cell phone charging, fuels for lighting and cooking, energy can consume up to 50% of household incomes in sub-Saharan Africa. As long as families are dependent on non-renewable energy sources, they cannot lift themselves out of poverty.” (Kerosene usage also results in a huge number of severe or even deadly burns every year in Africa.)
We who live in countries with stable and ubiquitous electricity may not think about it much because we probably have always had it, but solar power in very poor areas with no electricity can be transformative.
Similarly, reducing the use of coal and eventually eliminating it would save hundreds of billions of dollars of dollars a year in various societal costs. “The impacts found are damages due to climate change; public health damages from NOx, SO2, PM2.5, and mercury emissions; fatalities of members of the public due to rail accidents during coal transport; the public health burden in Appalachia associated with coal mining; government subsidies; and lost value of abandoned mine lands.”
Coal’s impact in China is even greater. In a single year, about 670,000 premature deaths have been linked to coal emissions, but the true number might have actually been even larger than that. “The health cost [of the study] is only based on the premature death figures due to the limitations of our research data. It could be way higher if we also include medical costs for other chronic illnesses.” According to the same Fortune article, 157 million people in China live in areas with harmful air pollution levels.
If coal impacts cost hundreds of billions each year in the US, how much are they in China, where the number of premature deaths and respiratory illnesses is much greater?
Of course, renewable energy contributes more economically than only jobs and pollution reduction. An IRENA report includes a reference to how stimulating renewable energy investment can be. “Doubling the share of renewables in the global energy mix by 2030 would increase global GDP by up to 1.1% or USD 1.3 trillion. The report shows that such a transition increases global GDP in 2030 between 0.6% and 1.1%, or between around USD 700 billion and USD 1.3 trillion compared to business as usual.”
Another key, and very striking, benefit is how renewable energy investment can impact trade. “For fossil fuel importers, the switch to a greater share of renewables has potentially favourable trade implications. Reducing fuel imports can improve trade balance and improve GDP. The EU33 improves its net exports by USD 15 billion when the renewables share is doubled and by USD 21 billion in the higher electrification case.”
According to an analysis conducted by the Union of Concerned Scientists, implementing a national 25% by 2025 renewable electric standard would result in the following benefits: “$263.4 billion in new capital investment for RE technologies, $13.5 billion in new landowner income from biomass production and/or wind land lease payments, and $11.5 billion in new property tax revenue for local communities .”
A single program created by the American Recovery and Reinvestment Act was very stimulating to the US national economy (at a critical time). “NREL’s analysis estimates that up to 75,000 direct and indirect jobs and up to $44 billion in total economic output were supported by the design, manufacturing, construction, and installation of solar photovoltaic (PV) and wind projects funded by the 1603 Treasury grant program. In addition, the study estimates that the operation and maintenance of these solar and wind facilities will continue to sustain up to $1.8 billion per year in economic output over the lifetime of the facilities (20–30 years).”
Wind power has contributed greatly to the US economy in just in the last dozen years or so. “Since 2005, American wind power has attracted more than $100 billion in new investment. At the current rate, the wind industry is investing between $10 billion and $20 billion per year in the U.S. economy.”
Another key point is the amount of manufacturing that takes place here in America. “Now, more than 50% of a U.S.-installed turbine’s value is produced in America, a twelve-fold increase from just a few years ago. Some turbine manufacturers plan to make 100% of their components in America, and the trend is expected to continue.”
Currently, wind power contributes about $20 billion a year in value to the US economy, and it has been projected that amount will rise to $24 billion by 2020.
Wind power is more stable than fossil fuels in this regard. “Because the electricity from wind farms is sold at a fixed price over a long period of time (e.g. 20+ years) and its fuel is free, wind energy mitigates the price uncertainty that fuel costs add to traditional sources of energy.” The Solar Foundation also released a report containing an astonishing figure — “the U.S. solar industry added $154 billion in economic output in 2016.”
Researchers at UC Berkeley studied the climate and health benefits of solar and wind power in the US and came up with equally huge benefits. “The climate benefit estimates ranged from $5 billion to $106 billion, with an additional $30 billion to $113 billion in air quality and public health benefits. And that’s just the estimated economic benefits of the averted 3,000 to 12,000 premature deaths—it doesn’t count things like sub-lethal medical issues and lost productivity, much less the personal benefits to individual lives.” On the low end, the combined values are $35 billion in benefits. At the top, it has the number at $219 billion.
Most of this information so far has been US-centric so let’s look at some other countries. China is a world leader in renewable energy in part due to it’s over-reliance upon coal and other fossil fuels. The result has been very harmful and even deadly air pollution problems. It has been reported that China will invest $361 billion by 2020 to combat this very serious problem.
“In the development scenario, the quantitative analysis implies that the added value brought about by wind and solar PV power industry, directly and directly, is about 5.0 times in 2030 more than that in 2015,” a study of renewable energy economic benefits in China estimated. “During 2016–2030, about 8674 billion RMB (1300 billion dollars) and 6949 billion RMB (1042 billion dollars) added value could be generated respectively by wind power industry and solar PV power industry, accounting for about 0.58% and 0.47% of GDP.”
China’s forward-looking investments in renewable energy have already paid off economically. “China is a case in point. Having pursued an aggressive industrial policy early on, it has emerged as a major exporter of renewable energy. It exported over USD 10 billion in solar panels and cells, almost 80 times the value it exported only ten years earlier (UNEP, 2013). As countries develop their individual renewable energy sectors, localising different activities in the value chain can redirect investments. These are channelled into the local economy and would otherwise have been spent on importing fossil fuels or renewable energy goods and services.”Germany is also a renewable energy world leader and its transition from fossil fuels to clean energy has had some clear economic benefits. “By 2020, they calculate, the renewable energy industry could contribute as much as 37 billion euros annually to GDP and the total number of jobs will be 120,000 higher than would be the case in the absence of the Energiewende.”
A PriceWaterhouseCoopers (PwC) study generated some key figures about such benefits as well. “The study finds that climate policy measures will create a total of 430,000 new jobs by 2020, mainly in the construction and metal production sectors, and increase GDP by 1 per cent in 2020. Due to increased energy efficiency and an overall decline in energy demand, Germany will also save €3,5 bn in fuel imports. The authors argue that, despite the high initial investments of €125 bn, long-term savings of €274 bn, e.g. through reduced energy consumption, will result in a net economic gain of €149 bn. Private households will save about €25 bn in energy bills. While the energy sector faces a net burden of €10 bn, industry, transport, agriculture, as well as the trade and services sectors can expect a total gain of €84 bn.”
By embracing renewable energy Germany has developed its technological capacity and increased its exports. “Germany has been one of the biggest exporters of technology and equipment for use in exploiting renewable energy sources. The value of exports just recently totalled around 10 billion euros.” 42 BMUB estimates that these exports will increase to €47–69 billion by 2030.”
Adding new, more efficient energy technology can reduce waste in current systems. “India has seen other benefits to renewable energy, too, Logan says. Right now, the country loses about 30 percent of the energy it generates, because of transmission line losses. By having decentralized solar power and wind, they’ve cut these losses and seen big savings in energy and money.”
As mentioned before with the Bangladesh example, in rural India, renewable energy has the ability to bring electricity to remote places where people have not had access, or not enough of it. To reach such places, large power plants just can’t make financial sense unless heavily subsidized, whereas distributed, small-scale renewables can service people and save them money today. “Solar DC microgrids are also starting to have an impact in Indian villages that have never had grid-provided electricity. Our largest installation to date involves 71 villages in the western state of Rajasthan, where we have been working with the utility company Jodhpur Vidyut Vitran Nigam to electrify some 4,000 homes for the Ministry of Power.”
So renewable energy is not only about the environment, it has the ability to changes lives for the better and it contributes economic benefits.
It has been established that climate change can intensify weather, including causing severe events like hurricanes, cyclones, tornadoes, and wildfires. “Human-induced climate change has already increased the number and strength of some of these extreme events.”
Hurricane Harvey alone had estimated costs of $125 billion. Estimates for the costs of Hurricane Maria range from $95 billion to $102 billion. In fact, 2017 was a record-breaking year for the United States. Sixteen distinct severe weather events cost a total of $306 billion. The previous record of $214 billion was set in 2005.
California experienced the most costly wildfires in its history in 2017 — the total cost has been reported to be $9 billion dollars. One contributing factor to the fires was a particular type of wind which has been linked to climate change. “According to a 2015 study, thanks to warmer and drier summers driven by global climate change, the downslope winds that led to the current situation are going to become more frequent and are likely to cause fires across even bigger areas in California in the future.”
While these severe weather event costs are huge, they unsurprisingly are small compared with the collective ones. “The share of national GDP at risk from climate change exceeds $1.5 trillion in the 301 major cities around the world. Including the impact of human pandemics – which are likely to become more severe as the planet warms — the figure increases to nearly $2.2 trillion in economic output at risk through 2025.” These figures are from an article on the Harvard Business Review site, not from an environmental activist source. These people are about business — they aren’t environmentalists.
One billion people might be forced to leave their homes by the impacts of climate change. What will that cost? Do we know how to make such estimates?
Another way that climate change can impact human health is through the spread of infectious diseases. “Climate change destroys habitats and stresses animal populations such as the bats of West Africa, forcing them to hunt for food nearer to humans. Humans, likewise pressed by climate impacts, encroach more closely on animal habitats. While we cannot know that climate change was the cause of the specific interaction between bats and humans that is believed to have launched the Ebola outbreak in Guinea, we will see more of these interactions in the future, and more epidemics as a result.”
The Zika virus outbreak was also noted to possibly have had a connection. “The spread of Zika, just as with Ebola, has sent a strong signal to the international community that there is a need for increased attention to the linkages between environment and health,” said UNEP Executive Director Achim Steiner.
The costs of the 2014–2016 Ebola outbreak in Africa were huge. “Aside from the devastating health effects, the Ebola epidemic also had a pronounced socio-economic impact in Guinea, Liberia, and Sierra Leone. According to 2014 projections from the World Bank3, an estimated $2.2 billion was lost in 2015 in the gross domestic product (GDP)4 of the three countries. The disease resulted in lower investment and a substantial loss in private sector growth, declining agricultural production that led to concerns about food security, and a decrease in cross-border trade as restrictions on movement, goods, and services increased.” (Over 10,000 people also lost their lives.)
The costs of the Zika outbreak range from $7 billion to $18 billion.
Climate change was not the only factor in causing these outbreaks, so only a portion of these total costs would be attributable to it. However, these are chilling examples of climate change’s impact on human health and the burdensome costs that go with it. Renewable energy replaces fossil fuels, thereby reducing emissions that cause climate change. Increasing renewable energy allows to decrease the costs described, and that is obviously very economically beneficial.
In fact, continuing to use fossil fuels will only worsen climate change impacts and their costs. Renewable energy is clearly the solution to many global problems. How could anyone argue against potentially raising millions of people out of energy and/or financial poverty with a clean, inexhaustible form of electricity?
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