The global financial crisis that took hold in 2008 was a wake-up call for business and government leaders worldwide. It's no longer realistic to pursue a business model that promotes growth at all costs. Unsustainable growth, after all, was at the heart of the U.S. real estate bubble that triggered the collapse. Unfettered expansion, scientists also warn, only increases our appetite for oil and other fossil fuels that contribute to global climate change. In the post-crisis economy, business and government leaders around the world have rallied around a new flag: sustainability.
By now, you've certainly heard of "going green." Well, green energy is sustainable energy. Also known as clean energy or renewable energy, green energy refers to electricity or fuel that is derived from renewable sources like the sun, wind, water, geothermal energy and biomass. Green energy, unlike fossil fuels, does not damage the environment to capture it or use it [source: ACORE]. But green energy is more than just a feel-good environmental movement. It is also widely viewed as the best prospect for business and job growth over the next decade.
U.S. President Barack Obama has identified the green energy sector -- he calls it "clean technology" -- as the catalyst for domestic job creation and long-term economic growth. United Nations Secretary-General Ban Ki-Moon has also stated that sustainable energy will drive global economic growth in the near future. Even if investors don't buy the hype, they can't ignore the headlines. Oil prices are skyrocketing, thanks in part to Middle East unrest, the BP oil spill in the Gulf of Mexico and the near meltdown of several Japanese nuclear reactors have further soured investors on the safety and viability of conventional energy production [source: Shell].
As a result, money is pouring into the green energy sector from governments, institutional investors and individual investors worldwide.
- Global investment in green energy in 2010 totaled $243 billion, an increase of 30 percent over 2009 [source: Pew Charitable Trusts]
- In the first quarter of 2010, venture capital investment in clean technology, which includes green energy, was up 68 percent from the previous year [source: Zwilling]
- In the first quarter of 2011, stock market funds tied to green energy rose almost 14 percent [source: Shell]
While the United States government has promised $172 billion in green energy investments over the next five years, those numbers are eclipsed by China, which plans to invest $397 billion over that same period [source: Jenkins].
Where, exactly, is all of this money going? On the next page, we'll talk about the major green energy industries that are expected to carry the economy of the future.
Green Energy Industries
According to global investment numbers from 2010, wind power is the green energy industry garnering the most attention from investors [source: Bloomberg New Energy Finance]. New turbine technology, coupled with a more efficient supply chain for producing and installing the sleek towering windmills, makes wind power cost-competitive with conventional energy sources like coal and natural gas [source: Zwilling].
Solar power is another huge driver of global business growth. Decades of research and development in photovoltaic (PV) cell technology has increased the efficiency of solar panels by five times their 1980s strength and new manufacturing techniques promise to lower the production costs of PV cells by 50 percent [source: EERE]. China has leapt headlong into the solar market, producing more than half of the world's solar panels. Since the Chinese government heavily subsidizes its solar industry, the price of solar panels has fallen by two-thirds over the past three years, driving some American solar companies to move production overseas [source: Bradsher].
Geothermal energy holds significant potential for U.S. power generation. An enhanced geothermal system taps underground pockets of superheated rock and uses the Earth's inexhaustible energy to boil water, which then creates steam to power turbines. There are vast fields of potential geothermal sites in the western U.S., but concerns over safety (critics say that tinkering with geological hotspots can trigger earthquakes) require more investment into research and development. Google invested $10.25 million in enhanced geothermal systems technology in 2008 [source: Rubens].
Biomass energy is a broad category that includes any fuel course derived from plants. Ethanol is the most widely known example of biomass energy. In the U.S., it's made from corn, but it can be derived from any plant material, such as sugar cane. While ethanol has run into some strong opposition (too much land and water used to grow corn, too many tax credits for the oil industries,), there is increased investor interest in biodiesel, a cleaner-burning fuel derived from any number of vegetable-based oils, including recycled cooking oil.
Other green energy industries include hydropower, ocean energy captured with tidal generators, landfill gas and hydrogen fuel cells.
The rise in green energy investment has led to the promise of more green-collar jobs. On the next page, we'll see how green energy is fueling job growth.
Green Energy Jobs
A study by the Pew Charitable Trusts found that green jobs in the U.S. grew 9.1 percent from 1998 to 2007, while job growth in the economy as a whole only grew 3.7 percent over that same period [source: Galbraith]. And that was before the economic collapse sent investors flocking to green energy. Green jobs, including green energy jobs, are now being listed among the fastest-growing careers of the next decade.
The only question is: What exactly is a green job? Luckily, the Bureau of Labor Statistics (BLS) is on the case. The BLS received funding in 2010 to begin tracking the growth of the green jobs sector, but to do so it had to come up with a clear definition. According to the BLS, your job qualifies as "green" if you work for a company that directly supplies environmentally friendly products and services (like a solar panel manufacturer) or a company that consciously institutes environmentally friendly practices (like powering its assembly line with rooftop solar panels). The BLS is sending out employer surveys to further determine which job titles are most closely related to the green aspects of the business. For example, does the janitor who cleans the factory with the rooftop solar panels count as a green job? Probably not.
Another upshot of investing in green energy is that the green energy sector is much more labor intensive than fossil fuel energy. Researchers at the University of Massachusetts at Amherst found that for every $1 million invested in green energy, an average of 17 new jobs are created on average, while the same investment in fossil fuel energy only creates five jobs [source: Durning].
One concern to green energy investors is whether there are enough qualified American workers to respond to the imminent demand for solar panel installers, wind turbine welders, and every flavor of engineer. The Green Jobs Act of 2007 authorized $125 million a year to create something called the Energy Efficiency and Renewable Energy Worker Training Program. The actual funding for the program didn't arrive until 2009, when $500 million of stimulus fund money was earmarked for training the American workforce for the impending green economy. In recent years, the Department of Labor and the Department of Energy have used the funding to create programs like the Energy Training Partnership Grants, the Pathways Out of Poverty program, and the Solar Instructor Training Network, all of which give lower-income workers the job skills to thrive in the green workforce.
For lots more information about green energy, alternative fuels and clean technology, head to the links on the next page.
- American Council on Renewable Energy. "What is renewable energy?" (Accessed April 19, 2011.)http://www.acore.org/what-is-renewable-energy
- Bloomberg New Energy Finance. "Global Trends in Clean Energy Investment: Q1 2011 Fact Pack." April 15, 2011 (Accessed April 19, 2011.)http://www.bnef.com/free-publications/presentations/
- Bradsher, Keith. The New York Times. "Solar Panel Maker Moves Work to China." January 14, 2011 (Accessed April 20, 2011.)http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html
- Durning, Alan and Langston, Jennifer et al. Sightline Institute. "Green-Collar Jobs: Realizing the Promise." October 2009 (Accessed April 19, 2011.)http://www.sightline.org/research/jobs/green-jobs-primer/green-jobs-primer-pdf/view
- Galbraith, Kate. The New York Times. "Study Cites Strong Green Job Growth." June 10, 2009 (Accessed April 20, 2011.)http://green.blogs.nytimes.com/2009/06/10/study-cites-strong-green-job-growth/
- Jenkins, Jesse. Breakthrough Institute. "'Rising Tigers, Sleeping Giant' Report Overview." November 18, 2009 (Accessed April 21, 2011.)http://thebreakthrough.org/blog/2009/11/rising_tigers_sleeping_giant_o.shtml
- Pew Charitable Trusts. "Who's Winning the Clean Energy Race?" 2010 Edition (Accessed April 19, 2011.)http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/G-20Report-LOWRes-FINAL.pdf
- Rubens, Craig. Gigaom. "Google Drills $10.25 Million into Geothermal." April 19, 2008 (Accessed April 21, 2011.)http://gigaom.com/cleantech/google-drills-1025m-into-geothermal/
- Shell, Adam. USA Today. "Chaos in energy sector drives gains in clean energy." April 6, 2011. (Accessed April 21, 2011.)http://www.usatoday.com/money/perfi/funds/2011-04-05-natural-resources-funds.htm
- U.S .Department of Energy, Energy Efficiency and Renewable Energy. "Photovoltaics." (Accessed April 21, 2011.)http://www1.eere.energy.gov/solar/pdfs/46660.pdf
- Zwilling, Martin. Business Insider. "Renewable Energy Will Be the Hottest Sector to Invest In This Year." January 12, 2011 (Accessed April 20, 2011.)http://www.businessinsider.com/the-renewable-energy-sector-is-fundable-in-2011-2011-1#ixzz1KAYrrGVN