With South Africa’s newest industrial policy action plan (Ipap) series paying priority attention to the issue of green industries, contemporary thinking on the subject emerging out of California contains useful insights. The US state’s green economy pedigree is not only substantial, but relatively well established. It has also emerged as something of America’s showcase for deploying green technologies and services to stimulate economic activity and job creation.
California has 820 MW of solar photovoltaic (PV) already installed, it attracted 58%, or $3-billion, of all cleantech-focused venture capital in North America in 2010, and the California Building Standards Commission’s recently introduced new green building code is poised to become the national benchmark for energy and water efficiency rules, as well as construction waste handling.
But with job creation being America’s (as well as South Africa’s) current obsession, green industry advocates are also seeking to add flesh to the much-vaunted ‘green jobs’ promise – a promise that is also tightly woven into the fabric of the Department of Trade and Industry’s Ipap.
Employment creation was, thus, also the key binding ingredient in presentations made by various speakers at the recent Green California summit held in Sacramento, parts of which I was fortunate to attend.
Speakers offered insight into what they believed could be the most job-rich green activities, while agonising over how the US could recapture its once dominant position within key market segments, from solar and wind to energy-efficient technologies and systems.
Deputy secretary and special counsel for green business development and international partnerships at the California Environmental Protection Agency Margret Kim lamented what she described as America’s “innovation adoption problem” – the gap between the origination of US solutions and the domestic commercialisation of those solutions. She argued that a greater take-up was required not only to stimulate local production, but also to create demand for green services.
New incentives and local-content rules were required to boost local manufacture. However, these should not be designed to crowd-out all foreign inputs, which would force other countries to pursue similarly punitive local-content restrictions.
That said, many of the green-job prospects really appear to lie downstream of the production process itself. For instance, it is estimated that only one-third of the total employment associated with a solar PV installation is generated in actual manufacturing. In other words, many of the green jobs are associated with installing, servicing or retrofitting.
In fact, Ridgewood Capital director Elton Sherwin estimates that California could create a million jobs by retrofitting inefficient lighting and heating systems in commercial and residential buildings. In addition, he argues that by shifting the focus from additional generation to retrofitting, three times the number of jobs could be created for every $1-million invested.
He proposes to spur the process by prodding the authorities to ensure that the energy use of every building in the state be graded from ‘A’ (efficient) to ‘D’ (highly inefficient) and the results published monthly on the internet. “When performance is graded, performance improves and when it is published the rate of improvement accelerates,” Sherwin explained.
Sounds like something South Africa should also begin considering.