Green Economic Development and Its Benefits for Small Business in the District of Columbia

Testimony of Bracken Hendricks, Senior Fellow, Center for American Progress, Before the Washington, D.C. City Council, Committee on Economic Development, Public Oversight Roundtable

Thank you, Council Member Brown, and members of this committee, for this opportunity to submit testimony before this public oversight roundtable on the pressing topic of green economic development in the District of Columbia. Today we face a tremendous opportunity to use environmental policies to create good jobs for Washington’s families and new markets for our small businesses. I want to thank you for the great leadership you are showing by recognizing the potential to advance the region’s economic development, even as we meet growing environmental challenges.

Building a green city, addressing climate change, and reducing the effects of our development on natural systems should not properly be seen as a cost to the District, but rather a tremendous opportunity for new investment into the built environment, a chance to renew infrastructure, create strong demand for goods and services, and generate thousands of jobs ranging from solid entry level positions in construction and skilled service professions to highly skilled technical positions, and to rebuild career ladders for our workforce. Further, these investments will not only create jobs—they will also improve public health, regional economic competitiveness, and quality of life for workers and employers in the District. Truly green economic development is a winning strategy.

Greening the District of Columbia is first and foremost an opportunity for local businesses. Nationally, the economic contribution of the “environmental industry” is already quite significant, and America has barely begun to address the major opportunities associated with our necessary transition to an efficient, low-carbon economy. The work of this committee is positioning D.C. to be a national leader, and to make the nation’s capital a model for the country on how to build prosperity using the economic engine of a clean energy economy, rebuilding green cities, and the creation of “green collar jobs” and businesses.

A recent study conducted by Management Information Services, Incorporated, found that in 2005, defined broadly, the environmental industry nationwide generated more than 5 million jobs; $341 billion in sales; and $47 billion in tax revenues. That means that tackling environmental problems is a sector bigger than the biggest Fortune 500 company, employing three times the number of people of the chemical industry, or 10 times the number of people employed by the pharmaceutical industry.

The type of workers and businesses employed in the green sector is also important. This area provides broad-based employment opportunity from entry-level to advanced degrees, and because it is an emerging industry, it can build the foundation of existing local businesses. Green economic development includes electrical subcontractors installing new lighting systems, building managers employing state-of-the-art energy controls, laborers engaged in the cleanup of formerly polluted lands, engineers and architects involved in retrofitting our buildings to be green, and urban arborists and landscapers restoring our rivers and trees to reduce storm water runoff, cut pollution, and protect critical habitat. It is clear that green jobs build the broad base of our economy and invest in local skills and businesses.

The scale of new investment that is coming in a new green collar economy is already staggering, and it continues to boom. According to estimates by the Clean Tech Venture Network, U.S. “green technology” investment (a subset of the “environmental industry”) between 2007 and 2010 will be between $14 billion and $19 billion, resulting in 400,000 to 500,000 new jobs created. Reorienting our antiquated energy infrastructure around the platforms of sustainability, efficiency, and reduced greenhouse gas emissions represents a great economic engine for innovation and productivity growth in coming decades. Rebuilding the infrastructure of our schools, our water systems, and parks creates still larger opportunities for new investment, and ones that must be viewed as an opportunity to grow our local economy through workforce and economic development linkages.

The role of public policy in driving this investment and these new markets is critical. Our city and many of the surrounding jurisdictions are launching policies and programs designed to improve environmental quality. These include not only our landmark green building law, but policies related to energy conservation and a comprehensive energy plan, river restoration and wastewater management, residential solar energy, green roofs, lead abatement, open space, and transit, as well as making good on a citywide commitment to reducing carbon emissions to fight climate change. Together these policies can create a large demand for construction, building trades, environmental remediation, and operations workers, and new markets for their employers.

As you will hear today, these emerging sectors of the local economy create jobs in the abstract as well as solid opportunities to connect existing small and local businesses to the emerging market opportunities, meeting the demand for “green” goods and services through Local Small Disadvantaged Business Enterprise’s and First Source contracting, as well as providing career ladders and skills training for low skill workers currently in need of pathways out of poverty. By their nature, green jobs are good jobs, and local jobs.

Smart public policy tying economic development and workforce investment to environmental policies is vital to ensure that the benefits of the new green economy reach our communities, business, and individuals most in need. Traditionally marginalized populations and small and disadvantaged businesses will require specific support from government to ensure their inclusion in the many opportunities ahead.

To ensure that green collar jobs are offered to workers with unmet educational needs and training requirements, and to help small and disadvantaged businesses, we can rely in part on our local hiring requirements, but we will also need training for green collar jobs in high schools, workforce training programs, provision of transitional employment, and wraparound services for those re-entering the workforce, certification programs, matching programs, and employer incentives targeted to local small business. Further, small local businesses will require additional training and capacity building to capture the growing market for green services. The District should target its economic development tools and workforce investment dollars toward the emerging green sector, in tandem with environmental policies, to ensure that local workers and local small businesses are ready to capture these opportunities.

This committee and the city council as a whole can play a very useful role in making sure that these linkages are made effectively:

  • You have the ability to ask agencies for reporting on their efforts to support the training of small businesses in green industries.
  • You have the ability to seek the performance metrics that will tell citizens if our green policies are working, by tracking environmental performance, conservation goals, and their connection to new employment and training opportunities.
  • You can ask for information on how green investments are being made across the District, and whether they are creating jobs.
  • You can support vocational training programs and development strategies that target emerging green industries, and make sure that green legislation includes solid workforce language advancing the growth of local businesses to ensure that there are employers ready to receive these trained workers.
  • You can track procurement to ensure that it is both green and locally sourced.
  • You can ask for reports on the operations of the government, and the outcomes of economic development programs as well, to ensure that public expenditures are really creating public benefits, and playing the potentially powerful role of creating new markets by pulling demand toward green products and services.
  • And you can develop strategies specifically for LSDBEs that help these businesses fill the pipeline of demand that is being created by our emerging policies on green building, energy, climate mitigation, wastewater, and other green programs.

Today’s hearing is just the beginning; it is a jumping off point, and it is an opportunity to start asking the right questions. We do not yet have all the answers on what this new labor market will look like, or which businesses will best be able to meet this growing demand, but we know the opportunity is there to re-engage workers, to build local firms, and to ensure that the District benefits from a green and growing economy. Coming out of this hearing, you can institutionalize a process for mapping the way forward on green jobs, measuring performance toward that goal, and ensuring that our economic development efforts are aligned to produce good jobs and environmental benefits.

Thank you.

Addendum: Key Questions to Consider in Promoting Green Economic Development

To develop a concrete strategy for laying the groundwork for a green collar jobs policy, several outreach efforts should be undertaken, and a few key questions answered immediately. These include defining answers to the following questions:

  • What training resources exist now that could be modified to include training in green collar jobs skills, certification for particular careers, and job readiness programs?
  • What public programs exist currently for economic development and business support that could be brought to bear to help businesses enter the growing green collar jobs market?
  • What sub-contractors and existing businesses exist that could benefit from additional training or resources for capacity building to access the green collar jobs market?
  • Who are the existing certified LSDBE businesses that are serving the current market, and what steps are needed to expand their capacity in green sectors, and their capacity overall, to fill the pipeline of demand for LSDBE contracts?
  • What are the areas of greatest capacity in small and local businesses to serve this growing market, and where are the gaps in the District’s pool of local businesses?
  • Who are the key leaders, trainers, and businesses who should be brought to the table early in policy development to help answer these questions, both from the perspective of skills development for workers, and hiring by employers?
  • What are the immediate and short-term steps that could be taken to bring together these partners and programs to launch a green collar jobs effort, and what are the mid-term and longer range research and capacity building needs in the District’s job market to promote the development of green industries?
  • What additional research needs must be answered in the short term to design an effective and strategic program to support green collar jobs and businesses in the District of Columbia?