The hike in the unemployment rate in October, from 9.8 to 10.2 percent, likely came as no surprise to the U.S. manufacturing sector. Over 2 million manufacturing workers have lost their jobs since December 2007, with an average of about 50,000 job losses per month. October also saw the bankruptcy of CIT Group, which had been one of the only stable sources for financing for the many small and midsize firms that make up America’s manufacturing supply chain. Even with the economy as a whole up by 3.5 percent—leading some to declare the recession finally over—the outlook is still pretty bleak for the industrial sector.
The clean energy economy offers hope for the American economy, and for the manufacturing and construction sectors in particular. Moving to cleaner and more efficient sources of energy and fuel will create demand for everything from large solar and wind systems to efficient windows and insulation.
But will new demand for these products put workers back on the factory floor? Not necessarily. Renewable energy installations have grown exponentially over the past few years, as a result of favorable federal tax policies, American Recovery and Reinvestment Act investments, and state and local renewable energy standards and building codes. But according to the Apollo Alliance, America still imports more than 70 percent of the component parts that go into our renewable and efficient energy systems. And just last week we learned that Texas is considering spending its Recovert Act funds to buy wind turbines from a Chinese manufacturer, a move that would create over 2,000 manufacturing jobs overseas.
The fact is that America is one of the only industrialized countries without a clearly articulated manufacturing strategy. This has become particularly evident lately, as countries ranging from Germany and Spain to China and India have made significant investments in their manufacturing sectors to capture new and emerging clean-energy markets. As the United States debates putting a comprehensive climate and energy policy into place, it is critical that we include strong provisions that recognize the centrality of our manufacturing sector to our competitive success in a low-carbon global economy.
The Senate already has some of the building blocks for a comprehensive clean-energy manufacturing strategy tucked into various pieces of legislation making their way through the committee process:
- The Clean Energy Jobs and American Power Act—also known as the Senate climate bill—just cleared the Environment and Public Works Committee. The act creates huge new demand for low-carbon technologies by putting a cap and a price on carbon emissions, and it invests in state-based manufacturing programs, clean vehicle technology development, and early stage technology programs like the Department of Energy’s Advanced Research Projects Agency-Energy. The Clean Energy Jobs Act also provides emission allowances to carbon-intensive and trade-vulnerable industries to temporarily cover increased costs.
- The Investments for Manufacturing Progress and Clean Technology Act, or IMPACT, now being considered by the Commerce Committee, provides $30 billion in revolving loans to assist small and midsize firms as they retool, expand, or establish domestic clean-energy manufacturing operations, or make their existing firms more energy efficient. IMPACT would also fund the Manufacturing Extension Partnership program, which provides technical assistance to manufacturers hoping to become more productive, efficient, and competitive.
- The Restoring America’s Manufacturing Leadership through Energy Efficiency Act, now pending before the Energy and Natural Resources Committee, provides up to $100 million in revolving loans to help commercial and industrial manufacturers make their facilities more energy efficient. The act also provides new funding for research and development into new manufacturing technologies and processes.
- Finally, the American Clean Energy Leadership Act, also known as the Senate energy bill, passed out of the Energy and Natural Resources Committee several months ago. This act creates the Clean Energy Deployment Administration, or a “green bank” that provides financing such as loan guarantees to accelerate the deployment of clean and efficient energy technology, energy infrastructure, and manufacturing. This act also creates a Motor Efficiency Rebate Program to support the purchase of energy efficient electrical motors.
Taken together, these provisions could begin providing a clean-energy manufacturing strategy that could put Americans—particularly the 68 percent of American workers who lack a four-year college degree—back to work in high-quality, middle-skill jobs. These jobs helped build America’s middle class, and they can help make America a leader in the global clean energy economy.
Kate Gordon is the Vice President for Energy Policy at American Progress.
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