How Will A Slow Reopening Of Business Affect Cleantech?

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Offices and factories have shut down. Millions of people have lost their jobs. Daily life for everyone has been altered in ways that our imaginations never could have embraced. And, while the skies are clearer in many places than they’ve been for years, it is uncertain as to whether even a slow reopening of business post-COVID-19 will have any significant effect on the long-term carbon emissions. Cleantech is the necessary next step to mitigate the climate crisis, and it’s imperative to get cleantech companies back up and running quickly.

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Governors around the US have been making their cases to reopen or not to reopen; that has been the question. Their efforts express the frustration and uncertainty of moving past severe restrictions in the face of the coronavirus.

In every economic sector, hesitancy and concern exists. Cleantech, with its employment of nearly 3.4 million in the US in 2019, reveals the depth of the economic crisis.

According to E2, a clean energy advocacy group, 2019 cleantech included:

  • more than 2 million jobs in energy efficiency, weatherizing houses, and manufacturing Energy Star appliances
  • half a million jobs in renewable energy, including solar, wind, hydropower, and geothermal
  • more than 250,000 jobs building hybrid and electric vehicles
  • about 150,000 jobs in power grid modernization and installing energy storage for the grid
  • another 40,000 jobs in biofuels like ethanol and biomass

In total, clean energy workers outnumbered fossil fuel workers 3 to 1 last year.

The news for 2020 post-COVID-19 may not be so optimistic. “If the lesson learned is, let’s get back to the status quo ante, then [the virus] probably will slow down the energy transition,” author and climate activist Bill McKibben told CNBC.

slow reopening of business
Photo by Carolyn Fortuna

March, 2020 unemployment data shows every clean energy sector is being impacted by the economic crisis.

  • Energy efficiency, the largest clean energy sector, had the most job losses in March, shedding about 69,800 jobs or almost 3%. This represents 2/3 of all clean energy job losses over the past month.
  • Renewable electric power generation and alternative transportation were also hard hit, losing more than 16,500 and 12,300 jobs respectively. Alternative transportation had the highest
    percent job loss of each of the five sectors, at more than 4.5%.
  • Clean fuels and clean transmission, distribution, and storage dropped about 3% of their workforce, representing 3,400 and 4,300 jobs, respectively.

Accelerating cleantech reentry will take lots of targeted strategic planning after the worst of the COVID-19 crisis has been overcome. A deliberate slow walk back to a no-longer-relevant norm isn’t going to do it.

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A Slow Reopening of Business in 2020 is Very Different than the 2008 Economic Recession

Peter S. Goodman, an economics correspondent for The New York Times, says there’s a key difference between the 2008 economic turmoil and today’s, which he describes as the utter unpredictability of the novel coronavirus’ spread. “The disaster feels eerily familiar, with trillions of dollars in wealth annihilated near-daily and deepening fears that businesses will fail,” he writes. “Yet the traditional policy prescriptions seem no match for the affliction at hand.”

In 2020, the method to control the health crisis is to restrict most work from home and to limit travel. Both of those are enormously disruptive to commerce, including cleantech.

As we turn to a post-COVID-19 marketplace, the demand for interdisciplinary and more intense research and development (R&D) cooperation on sustainable energy technologies needs to increase. That’s according to Peter Schniering of Future Cleantech Architects.

Schneiring  describes the next phases of cleantech as needing “complex technological systems which must be transformed substantially if we are to fundamentally decarbonize human activity in line with the targets of the Paris Agreement.” Those systems would involve “the right kind of” people who are brought together before the innovation stages. It is contingent upon marketing/communications and scaling strategies that are initiated early enough to secure access to corporate partners, appropriate funding, and legal and business advice. Ultimately, both interdisciplinary and intense R&D can lead to breakthrough ideas, Schneiring says, though that will take focused efforts.

Assuaging the Burden on Small Cleantech Businesses

E2: Clean Jobs America” shows why it’s imperative for lawmakers to focus on clean energy in economic stimulus packages and other policies aimed at restarting the US economy. Lawmakers need to step up to create a stronger, cleaner economy in the future. The same is true of cleantech around the world. It will require bold ideas, big initiatives, and commonsense policies at both the state and federal levels and must be consistent with any slow reopening of the economy plans.

The International Energy Agency, or IEA, has warned the virus outbreak will likely undermine clean energy investment and is urging governments to offer economic stimulus packages that invest in clean energy technologies. COVID-19 self-quarantine strategies have slowed transport, trade, and economic activity across the globe. The implications of the pandemic for energy systems and clean energy transitions are still evolving, but the IEA points to 3 areas in particular that demonstrate the importance of clean energy systems:

  • Energy security remains a cornerstone of our economies, especially during turbulent times.
  • Electricity security and resilient energy systems are more indispensable than ever for modern societies.
  • Clean energy transitions must be at the center of economic recovery and stimulus plans.

Dan Jørgensen, Danish minister for climate, energy, and utilities, and Fatih Birol, executive director of the IEA, argue that by making clean energy an integral part of their plans, governments can deliver jobs and economic growth while also ensuring that their energy systems are “modernized, more resilient, and less polluting.” To make meaningful progress on clean energy transitions, they have identified 3 important recovery actions:

  • Ambitious agenda setting for job creation and climate change goals. Policy makers should pursue synergies between job creation and climate action to drive economic recovery. Modernizing energy systems can make a concrete contribution to job creation and economic growth while also protecting the climate.
  • Public sector leadership on investing in clean energy. IEA analysis shows that governments directly or indirectly drive more than 70% of global energy investments. At this time of crisis, their actions matter more than ever. Policy settings can actively steer energy-related investments onto a more sustainable path.
  • Making energy efficiency, renewables and battery storage central to economic recovery. Stimulus programs in these dynamic energy industries should be prioritized to support existing work forces, create new jobs and drive reductions in emissions.

When designing stimulus packages, governments should bear in mind the structural benefits that renewables can bring in terms of economic development and job creation while also reducing emissions and fostering technology innovation, Jørgensen and Birol conclude.

Final Thoughts on a Slow Reopening of the Economy & Its Effect on Cleantech

Energy efficiency efforts such as retrofitting buildings and technology upgrades are a good match for stimulus programs. With enhanced competition, lessened energy bills, and quick job creation, energy efficiency measures support key sectors such as construction and manufacturing and underpin productivity gains through innovation and infrastructure. So, too, should renewables like wind power and solar PV become essential ingredients of stimulus packages, as they emphasize how low-carbon technologies can grow rapidly to become a dynamic and innovative part of forward-looking economies.

The US stimulus bills enacted in March offer help for the millions of small businesses. Those eligible for aid are businesses and nonprofit organizations with fewer than 500 workers, including sole proprietorships, independent contractors, and freelancers. The Small Business Administration (SBA) is administering the aid, which includes a Paycheck Protection Program and an Economic Injury Disaster Loan Program.

On the first day of the reopened Paycheck Protection Program, a key lifeline from Congress, banks reported that the SBA’s portal was not working. Bankers told NPR on Monday that the system, known as E-Tran, would not allow them to enter loan application information that is needed for small businesses to access the program. Such a debacle makes a slow reopening of the economy a fool’s errand.

When will the US and other governments fulfill their pledges to protect their citizens, including cleantech workers and entrepreneurs? The planet can’t wait.

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Carolyn Fortuna

Carolyn Fortuna, PhD, is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavey Foundation. Carolyn is a small-time investor in Tesla and an owner of a 2022 Tesla Model Y as well as a 2017 Chevy Bolt. Please follow Carolyn on Substack:

Carolyn Fortuna has 1316 posts and counting. See all posts by Carolyn Fortuna