Hunt for the Green Economy

Everyone loves it, but does anyone know what it is??


Everyone loves it, but does anyone know what it is?

Governments today are keenly interested in promoting the “green economy,” and it’s easy to understand why. The International Labour Organization estimates the global market for environmental products and services will expand from US$1.4 trillion in 2008 to US$2.7 trillion by 2020. Statistics Canada reports that firms in this country sell $20 billion of environmental goods and services every year. But what does the “green economy” consist of? And what, exactly, should be counted as a “green job”?

Unfortunately, there are no generally accepted definitions. Statistics Canada considers the “environment industry” to comprise firms engaged in measuring, preventing, limiting or correcting environmental damage, as well as businesses that produce clean or resource-efficient technologies that reduce emissions and/or minimize waste. This definition has the advantage of focusing on end use rather than the attributes of a product or service. Accordingly, Statistics Canada classifies a “green job” as one involved in the provision of environmental goods or services, as defined above. This captures a mix of businesses, from environmental consulting firms to companies making products that reduce pollution, improve energy efficiency and supply alternative (carbon-free) sources of energy.

How big is the sector? There is a tendency in some quarters to overstate both the number of green jobs and the growth prospects of the sector. Perhaps the most extreme example is the Political Economy Research Institute (PERI) at the University of Massachusetts. The PERI recently compiled employment numbers for occupations associated with six strategies that American states are using to address global warming: building retrofits, mass transit, energy-efficient automobiles, wind power, solar power and cellulosic biofuels. In the case of wind power, the PERI argues that building wind farms creates jobs for sheet-metal workers, machinists and truck drivers, among others. Thus, sheet-metal workers in Indiana are classified as part of the green economy regardless of whether they ever cut steel for an actual wind turbine. Ditto for construction workers who may spend a small portion of their time working on green energy projects or retrofitting buildings.

This approach rests on an inflated concept of how to measure the green economy. The same flaw is found in a new Ontario report sponsored by the Green Energy Act Alliance, Blue Green Canada and the World Wildlife Fund. This study improbably suggests that 90,000 new jobs per year can be created by a stepped-up pace of investment in Ontario’s green economy. It is hard to take this claim seriously; in a normal year, total employment in Ontario rarely increases by more than 100,000. Moreover, this study, like many others, largely overlooks the job losses that surely would result if Ontario followed the authors’ advice to sharply boost prices for electricity and other energy sources.

In Germany projections of dramatic job growth in the renewable energy sector recently sparked excitement in North American policy circles. Drilling into the data published by the German government, it turns out that roughly 60 per cent of all existing jobs in this sector are found in energy planning, environmental regulation and enforcement – i.e., they are part of the public sector architecture that oversees renewable energy. These are not the kinds of jobs that green-economy enthusiasts tend to have in mind.

None of this is to diminish the opportunities that exist to grow green industries here in B.C. There is lots of scope to develop and sell more B.C.-produced renewable power. And B.C. already boasts a cluster of innovative “clean tech” companies, including Westport Innovations Inc., Day4 Energy Inc., Nexterra Systems Corp. and others. But policy makers, business leaders and the public need reliable, credible data to make sound decisions. We would all benefit from a realistic definition of the industries and jobs that ought to be included under the heading of the green economy. n

Jock Finlayson is executive vice-president for policy at the Business Council of B.C.