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By Racquel Palmese

In its recent publication, Many Shades of Green, based on research done by the non-partisan educational organization Collaborative Economics, Next 10, set out to give Californians a sense of the number and types of green jobs and green businesses there are around the state. According to Next 10 Founder F. Noel Perry, “green businesses” were defined as those providing products and services that offer alternatives to carbon-based energy solutions, conserve the use of energy and all natural resources and reduce pollution (including greenhouse gas emissions) and repurpose waste. Perry says the report “provides the most comprehensive analysis of businesses and jobs in the emerging green economy.”

Next 10 works at the intersection of the economy and the environment. According to Perry, “The immediacy of issues like climate change and the fact that California has been a leader for decades on environmental issues has spurred innovation in technologies that have in part led to the growth we are seeing in the number of green businesses and jobs here in California.”

The report documents that between 1995 and 2008 (the most recent statistics available), green businesses increased 45 percent in California. Employment in this sector grew 36 percent – at a time when the overall number of jobs in the state only expanded 13 percent. Between 2007 and 2008, total jobs dropped one percent, while green jobs grew five percent. “It will be interesting to see,” he says, “how these jobs figures play out as we update these statistics in the years to come.”

A Surprising Detail

Perry was surprised, he said, at some of the details arising from the research – in particular, the fact that green job growth is not restricted to just a few areas of the state. “While we were pretty sure we would find green jobs in the clean tech business corridors around Silicon Valley, in actuality, we found a proliferation of green jobs in just about every region. It was a pleasant surprise that spoke to the widespread potential in every corner of California for green jobs and businesses.”

The study shows Sacramento as statewide the leader in green job growth, expanding 87 percent between 1995 and 2008. But other regions also had very impressive gains. San Diego came in second at 57 percent, Orange County and the Inland Empire grew green jobs at 50 percent.

The diversity of green jobs by region was also noteworthy. In the Inland Empire, energy generation jobs grew by 85 percent, as this region has the highest concentration of solar and wind energy companies. Los Angeles is the state leader in energy storage and recycling, and energy efficiency jobs in L.A. grew by 77 percent. In the Silicon Valley, technology investment and alternative fuel vehicles dominate the green scene. “I think it’s apparent that there is a foundation for expanding green jobs across all regions of California,” says Perry.  That includes Sacramento, the San Joaquin Valley, the Bay Area, Los Angeles area and the Inland Empire.

Keeping the Green Jobs Market in Perspective

“I don’t want to oversell green jobs in California as being the cure-all for our beleaguered economy,” cautions Perry, whose experience as a venture capitalist disposes him to a pragmatic view of Next 10 research.  “As a percent of total number of jobs in the state, about 18 million, green jobs don’t represent a large number. However, if you compare green jobs with biotech and software jobs, green jobs come out right in the middle. Biotech represents around 50,000 jobs in the state; software around 225,000 jobs. We located approximately 159,000 green jobs existing right now.” 

“There are a lot of numbers flying around about green jobs and the desire to see a bright light at the end of this recessionary tunnel,” Perry adds.  “Collaborative Economics does a very thorough job of analyzing the data, and I feel we came out with a conservative but accurate number.”

As demand for natural resources and fuel grows, and resources are diminishing due to population expansion, climate change and other factors, there is a tremendous impetus to transform the economy to one based on renewable resources and efficient use of those resources. “From a business point of view,” he says,  “it’s a simple equation. As people conserve energy, their electric bills are reduced. This leaves them with surplus funds they can use to buy products and services, thus spurring the economy.  And while the equation is simple, for the kind of growth we all hope to achieve, we need the kind of political commitment to supporting growth in clean tech through incentives and mandates that has been exemplified by California.”

The third edition of another Next 10 study, the California Green Innovation Index, will be released in a few months. The Index looks at carbon emissions in California, comparing them with economic and job growth. Specifically, it looks at the ramifications of the energy policies in California, historically up to the present. In 1959 California was already breaking new ground by testing automobile emissions and setting emissions standards. In 1963 the Clean Air Act was signed into law, and by 1967 the state had established the California Air Resources Board. After the OPEC oil embargo of 1973, the California Energy Commission was created, and a few years later came the Clean Water Act, Title 20 – setting energy efficiency standards for appliances - and Title 24, setting efficiency standards for buildings.

“All the while, the world was watching,” says Perry, “and often following our lead.” Never has this been the case more than in 2006, when California enacted AB 32, the Global Warming Solutions Act, the first law to limit greenhouse gas emissions at the state level. Several states have since followed.

The High Cost of Doing Nothing

With California experiencing some of the worst effects in the US of the global financial crisis – double-digit unemployment and the highest state budget deficit in the nation’s history for two years in a row - there is pressure to delay California’s landmark climate policies. But in its latest study, Energy Prices & California’s Economic Security, authored by Professor David Roland-Holst, Next 10 found that California is actually more at risk if it delays diversifying its energy portfolio towards more renewables. “If energy prices go up a lot, we’re vulnerable as a state,” said Perry. “Energy efficiency and renewables offer a valuable hedge against the risks of higher fossil fuel prices.”  

According to the report, California risks a loss of over $80 billion in Gross State Product (GSP) and 500,000 jobs by 2020 if we do not diversify California’s energy portfolio toward more renewable fuels and energy efficiency. If, on the other hand, we implement 33 percent renewable energy and a 1 percent annual energy efficiency improvement, we will hold down energy prices, yielding a growth dividend, potentially increasing GSP by $20 billion and generate 112,000 jobs.

The Next 10 studies show that delaying California’s energy policies could significantly slow down a potentially very powerful engine of our economy. Energy by revenue is one of the top five industries in the world, and many people believe, Perry included, that clean energy technology has the potential to revolutionize the energy sector, just as information technology has revolutionized communication.

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