Whither the Green Economy?

By Edward B. Barbier, the John S Bugas Professor of Economics, Department of Economics and Finance, University of Wyoming. Originally published at .

Over a year ago, in March 2013, the U.S. Bureau of Labor Statistics (BLS) released its 2011 . Its purpose was to describe employment and development trends in five key categories of the burgeoning U.S. green economy: energy from renewable sources (aka “clean energy”), energy efficiency, pollution abatement and materials recycling, natural resources conservation and environmental compliance, education, training and public awareness.

Some good news emerged from the GGS Survey: In 2011, there were 3.4 million green goods and services jobs, accounting for 2.6 percent of U.S. employment.

However, there was also bad news to report. In March 2013, the BLS announced that, as part of the cross-the-board spending cuts authorized through the federal budget “sequestration,” it would no longer be producing any more GGS Surveys after the 2011 report.

In short, the U.S. green economy and employment may or may not be growing, but since 2011 we have had no national survey reporting on these trends.

The fate of the Green Goods and Services Survey seems symbolic of the entire green economy in North America. There is signs of considerable progress, but mostly we seem to have little idea whether we are on an upward trend or whether “green growth” has actually stalled.

The main dilemma to “growing” the green economy in North America has been apparent for some time: Is it just one small niche sector within an overall “brown” economy, or is the green economy really the force for a new wave of industrial innovation, R&D and employment that ultimately replace the brown economy with a more sustainable and greener version?

I alluded to this fundamental problem in 2010, when . Although a striking feature of the 2008-9 Great Recession was that the major world economies devoted nearly 16% of their total fiscal stimulus to “green investments,” I noted that such “green stimulus” was in danger of being short-lived and less than “global.” This was due to three principal reasons: over 60% of the global green stimulus was devoted to energy efficiency, which has short-term employment and industrial impacts; Asian economies accounted for much of the global green stimulus, whereas North America and Europe were less committed to such investments; and, finally, major market disincentives to long-term development of the green economy—in the form of environmentally harmful subsidies, the absence of pollution taxes and other market-based incentives, and the lack of public investments to support private green R&D—remain fundamental obstacles to long-run development of the green economy.

The last obstacle—the void of complementary pricing policies and market-based incentives—still remains a fundamental hindrance to the emergence of a green economy in North America. This problem is identified specifically as a major hurdle in a .

A predicts that “while the overall outlook is good, there is a mixed bag of trends, predictions and problems that will directly impact sustainability, renewable energy, green building and clean tech in 2014.” Key difficulties include outdated utility business models, inadequate transmission infrastructure for renewables, and complications caused by increased energy and resource prices. On the positive side, state Renewable Portfolio Standards (RPS), production tax credits for wind power, economies of scale driving down the price of solar energy, and environmental and efficiency-related technology innovation are likely to boost key green sectors in 2014. As for the long term beyond 2014, it is anyone’s guess as to how these various “mixed bag of trends” and ad hoc policies will influence the overall growth of the U.S. green economy.

What is clear, however, is that not much has changed fundamentally in the last few years. Unless a greater effort is made to remove the major market disincentives to long-term development of the green economy, such as harmful subsidies, the absence of pollution taxes, and inadequate public support for private green R&D, the green economy “boom” in North America may just wither in coming decades.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

12 comments

  1. participant-observer-observed

    It’s worse than we imagined:

    “While the fight over the Keystone XL pipeline and the Alberta tar sands has galvanized the environmental movement, far less attention has been paid to a related story here in the West. The state of Utah has begun making preparations for its own major tar sands and oil shale extraction projects.”

  2. Nathanael

    They’ve stopped reporting on it because they don’t want people to realize how well it’s doing. The oil companies need to sell people on the idea that oil is “inevitable”. Proof that the “Green economy” is taking over will not support their propaganda. So they make sure that the data isn’t collected.

  3. Banger

    I don’t see much support of green technology in the U.S. nor chance of support. The environmental movement is stalled and going nowhere. We are heading into the future knowing we are facing at least a chance at catastrophe but few people care at this point.

    1. Nathanael

      Solar panel adoption continues at a pace which is extremely high. It’s hard even to measure how fast it’s happening, but solar panel installers can’t keep up with the demand.

      Make no mistake, the energy revolution is happening, and it’s distributed.

  4. “…inadequate public support for private green R&D…”

    With all due respect: why should the public be supporting private R&D? Doesn’t it make more sense to increase public support for public green R&D, through our public universities whose faculty and researchers are, as reported here recently, struggling to find adequate funding?

    In short, haven’t we had enough of this public-private-partnership BS?

    1. Susan Pizzo

      Agreed. But in addition, I was thinking he meant moving our money – having pension funds et al divest from fossil fuel projects and invest in the green economy…

  5. Andrea

    Basically, as the report hints at, the purpose of the green economy is …more growth, more employment, more whatever. In any case the discourse around it is completely confused.

    An emblematic example. In CH, practically all glass is recycled, more than 90%, numbers vary, but world champions in any case.

    This branch of the ‘green economy’ uses up extraordinary amounts of energy.

    Where I live, the glass is thrown into underground bins (so as not to be visible, noisy.) Many course have to, or choose to, drive their glass to the recycling point. That might be a ‘soccer Mom’ in a SUV. If you are rich and lazy, you can call a private service. They have nice big trucks with flowers painted on them. To pick up one jam jar and 7 champagne bottles after you got engaged.

    The bins are dug in quite deep and required major construction – large metal containers that have to be lifted out with the use of a small but very powerful crane on the back of a tremendous, polluting and growling, Mercedes Diesel trucks. (Two employees, a driver and handler.)

    The containers are then driven to a depot where they are emptied cleaned etc. and then returned and re-positioned, again with the crane. The glass is then transported to recycling plants, few in number, so the trips are quite long. It is then sorted, partly by hand, partly by huge machines, read endless conveyor belts, sensors, etc.

    About 70% or more of this glass is used to form new containers. The rest turns into gravel, sand, isolating materials, etc.

    To melt the glass temps. of about 1 500 C are required. (the heat comes from fossil fuels..) The glass is put into a state of fusion, and then by different, complicated, procedures formed into new bottles. Huge factories…Note if you look at their stats they claim energy savings, -small and unverfiable? – but the unstated comparison and claimed ‘energy saving’ is always with making new glass from scratch, by digging for silica, etc.

    It is an opaque and recent industry (who really pays is hard to track, but mostly the taxpayer, the buyer of the new containers, the buyer of a bottle of wine, juice, pickle jar..) that makes a lot of money and affords quite some employment. I have not been able to find any reliable nos. about the energy used.

    In case it wasn’t clear, what is wrong with washing the bottles?

    Well, that would use less energy, decimate a lucrative, steady, bizness, throw people out of jobs, impact truck sales, deprive shareholders (such as pensioners, indirectly), reduce tax revenues from the companies, and on and on.

    (I am not a glass or energy specialist..)

    1. allcoppedout

      Glass recycles very well. The costs almost certainly exceed using stuff that can be thrown away to public cost. As with most accounting, much of our failure with going green is actually about not having green accounting rules and allowing firms to put costs off their balance sheets. We aren’t green because of accounting.

      1. Carla

        Well, I’m not sure, but I think Andrea’s point may have been: why spend money and energy to RECYCLE glass when we could just REFILL it? And why indeed?

        Andrea, please correct me if I’m wrong.

  6. allcoppedout

    I’m a fuel from air fan, but think some schemes I’ve seen have that ‘green pyramid’ ring. I’ve looked at a few prospectuses and been left wondering about salted gold mines. The latest adverts following PPI and other bank perversions ask, ‘Have you been mis-sold solar panelling’? I have been with the green and ethical Coop Bank for 30 years and must get round to moving my account to somewhere that actually is.

    I’m with Dip on the public-private partnership bulldung. We used to imagine that markets and consumers somehow picked the right products and ensured proper allocation of capital. This is no doubt why we live in houses “worth” 10 times build-cost, built to crapification standards and full of crapified products and people doing jobs probably not needed they hate to pay for it all. We’re going green at the gills and we are the lucky ones. Cardboard City may seem bad, but economics produces much more dire poverty than that, with lots of people living and dying in the undeclared WW3.

    The answers, of course, are wearing woolly jumpers and permagardens. Economics and our business models will sort the rest, especially if we go back to gainfully employing children up chimneys. I know, let’s invent a technology that could put all the world’s knowledge at everyone’s finger-tips and give us a fully transparent financing and political system. Then use it to disseminate pornography and gossip to make money.

    The technology to go green and even live in peace and reasonable equality is with us. Ideology, as deep in our biology as ants taking slaves (economics without morality) is the problem. I could issue some sums on energy. The river congo has enough energy to power Africa, Scotland enough wind, waves and currents to power Europe. There’s no point. It’s still cheaper to keep people unemployed, dig, drill and frack for products that burn the planet and guard all this with geopolitics.

    The model at the base of this is a human individual. We don’t really know what this individual is and certainly not what it might be in a situation of ecological peace. Our science fiction is so naff it transports he same soap opera version of the individual human to cowboys and Indians amongst the stars in technology current science knows to be impossible. What chance of some drama on a green world? Much less than yet another channel running repeats of James Bond, NCIS and other hapless dross.

    What’s the real plan then? Frack the USA and the North Sea to death, rendering the northern hemisphere to dust-bowl before we invade Argentina for another few decades on top? Now I understand the Falklands strategy!

    1. Nathanael

      You don’t usually get pyramid schemes and bubbles unless there’s an actual boom underlying it. The boom in railroads in the 1830s had a lot of pyramid schemes and bubbles floating on top of it — but make no mistake, the railroads as a whole were massively successful.

      Something similar is going on with solar.

  7. washunate

    The Green Economy is a worthless neoliberal phrase, like public private partnership or STEM jobs.

    The most important green activities involve reducing resource usage (like working less, building more walkable communities, and ending the absurd subsidies of agribusiness and fossil fuels and McMansions destroying our water supplies and waistlines).

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