Energy Economics Q&A’s 2.0: Does Energy Efficiency Cost Jobs?

After the WMEAC Energy Forum on Wednesday March 2nd at Grand Rapids Community College, we found ourselves once more with an abundance of unanswered questions. These questions will be addressed here and in following posts, so look forward to more soon.

Q: If alternative energy and energy efficiency technology is inherently meant to increase efficiency and create longer-lasting systems, won’t this negatively impact job creation and job sustainability?

A: Alternative energy systems and energy efficiency programs are indeed intended to last longer and increase the efficiency of energy use. It might appear that if better quality systems are created that last longer, fewer jobs will be needed and fewer jobs will be created, increasing unemployment, but that hasn’t been the experience since the industrial and technological revolutions.  New industries, new jobs, and more wealth creation have more than replaced the industries and jobs lost.  One term associated with this idea is “creative destruction”.  Certain jobs will indeed be eliminated, but new jobs and (perhaps more importantly) new wealth will grow to take their place.  It is true however, that the newer jobs may be different in nature  than those they’re replacing, and some workers can be left behind.

The “big picture” view is also important.   Not only does the alternative energy market create more jobs than traditional technologies, but every aspect of the economy benefits.

There are several factors to consider:

1. Alternative energy technologies are sustainable. Fossil fuels are a non-renewable resource. Simply put, fossil fuels are running out. Alternative forms of energy will be needed, otherwise our way of life as we know it – our economy too – will come to a screeching halt. And as they run out, prices will only climb, increasing economic pressure on businesses and the job market.

2. Alternative technologies keeps our money in-state and in-country. Reliance on traditional technologies sends money out-of-state and overseas. The U.S. imports a large percentage of the fossil fuels it uses, and Michigan imports most of its energy needs. Energy efficiency programs decrease the amount of money sent overseas and out of state, and alternative energy production creates jobs here at every step of the process. Not only is this economically beneficial, but it decreases national security risks to our energy base.

3. New energy technologies inspire R&D jobs and manufacturing jobs. Alternative energy and energy efficiency technologies are still in their infancyjobs are needed in research and development, production, maintainance, and every other aspect of the industry. Nothing is more economically-stimulating than locally-based innovation and growth. The entire industry is entirely job-creating, and traditional energy jobs will still be needed for years to come. As the two industries gradually shift their share of the energy market, proactive policies and pragmatic businesses will ensure smooth job transitions between the two, merging the experience of traditional energy workers with the ingenuity of newer technologies.

4. The bigger picture: Alternative energy technologies produce FAR less pollution than traditional energy production, benefiting human health, reducing health-care costs, and positively impacting localized tourism. They also reduce fuel and energy costs, lowering our bills, our taxes, and giving us more money to spend in our local economy.

For more information on this topic, please read WMEAC’s Alternative Energy Policy Documents.

Graphic courtesy of jscreationzs.

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