Get the Facts Right: Germany has seen a Boom in Green Jobs

The American Enterprise Institute (AEI) has recently published a new report: The Myth of Green Jobs - The European Experience. It claims that clean energy technologies increase energy prices and don’t lead to a net job growth in Europe. Given the German experience, Arne Jungjohann argues, AEI’s report has several flaws:

Is it true that the clean energy industry in Germany has not yielded net job growth?
Over the last ten years, Germany has seen a boom in green jobs. More than 340,000 new jobs have been created in the renewable energy sector. By contrast, Germany’s only domestic fossil energy source, lignite coal, employs only 50,000 people along its entire supply chain, from mining to the power plants. Unemployment is a big challenge in Germany, too, but the renewable industry is providing many new jobs. In its German section, the AEI report clearly fails the reality-check.

The AEI report claims that energy costs in Germany have risen sharply because of renewable energies…
The numbers used in the AEI-report are taken from a German report by the Rheinisch-Westfälisches Wirtschaftsforschungsinstitut (RWI) that identifies much higher costs for the future Their researchers assume a worst case scenario. Leading think tanks such as the Deutsches Institut für Wirtschaftsforschung (DIW) and the Wuppertal Institut have identified implausible assumptions in the RWI report. It ignores the economic benefits that come with renewable energies.

What cost benefits come along with renewable energies?
RWI’s report fails to account for PV’s ability to generate at periods of peak electricity price, and fails to take into account the grid stability benefits reported by German grid operators. With more renewable energies, fossil fired power plants can stay offline longer. This both keeps down electricity prices at the spot market and reduces imports of natural gas from Russia. In 2008, the German government reported that the Renewable Energy Act cost 4.5 billion Euros, but saved 2.7 billion Euros in fossil fuel imports and 2.9 billion Euros in avoided externality costs such as air pollution.

Do people support this development, given that they have to pay an extra charge on their utility bill?
Renewable energies are very popular in Germany. In 2010, the average German household contributed 5 EURO per month for investments in renewable energies. That is very modest and costs as much as one good, German beer. People are fine with this. They know that the craftsman next door and the farmer nearby benefit from these investments. They rather inject this money in their local economy and create new jobs than sending it overseas for oil and gas imports.

The RWI-report has not been commissioned by a German organization….
The RWI report was ultimately paid for by Koch Industries. When first published in German, no sponsor was mentioned. It was only the English version that listed the Washington-based Institute for Energy Research (IER) as a sponsor. The IER gets most of its funds from Koch Industries. The authors of RWI were trying to hide this information, because even in Germany it is well known that Koch Industries finances work for the sole purpose of delaying action for clean energies and climate protection. After this became public, the RWI-report lost its last bit of credibility.

AEI is not only looking at Germany, but at Spain, Denmark, and Italy as well. How does it look for Europe overall?
The EU has already committed to slashing its emissions at least by minus 25% by 2020. The reasons are the same as for Germany: more jobs, a greater competitiveness, and more energy independence. A recent study by the Potsdam Institute for Climate Impact Research (PIK) and others estimates that this would boost European investments, increase GDP by up to $840bn and add some 6 million jobs.

In the U.S., the discussion on renewable energies, climate change, and green jobs is very partisan. How do the politics play out on these issues in Germany?
The German renewable energy sector is seen as a key industry with economic benefits for the country across the political spectrum. All political parties support a further robust growth of renewable energies. They create more jobs, reduce carbon pollution and strengthen the country’s competitiveness and energy security. Chancellor Merkel and her center-right government are pushing for a low-carbon economy that produces at least 80% of its power with renewable energies by 2050. Meanwhile, German engineers and technicians are working on overcoming constraints for an energy system based up to 100% on renewable power.

How do you see the discussion on green jobs and a low carbon economy in the United States?
As a European, it amazes me how reluctant the United States is in approaching the issue. The U.S. of the 20th century was known to be optimistic, to take on challenges, and to lead by example. I see very little of this in the clean energy agenda. While others like Europe, China, India, and Brazil are accelerating towards a low carbon economy, the U.S. is falling behind. It is a global race in which the U.S. is not yet taking part. Given the great natural resources and technological skills of this country, it can be expected that rapid renewable energy growth in the US would create similar outcomes as in Germany.

Arne Jungjohann is the Director for the Environment and Global Dialogue Program of the Heinrich Böll Foundation in Washington DC. The focus of his work is identifying and promoting solutions towards a low carbon economy. Prior to this he was a legislative advisor for the German Greens in the Deutscher Bundestag and worked on Germany’s Renewable Energies Act (EEG).