The “green” or “clean” or low-carbon economy—defined as the sector of the economy that produces goods and services with an environmental benefit—remains at once a compelling aspiration and an enigma.

As a matter of aspiration, no swath of the economy has been more widely celebrated as a source of economic renewal and potential job creation. Yet, the clean economy remains an enigma: hard to assess. Not only do “green” or “clean” activities and jobs related to environmental aims pervade all sectors of the U.S. economy; they also remain tricky to define and isolate—and count.

The clean economy has remained elusive in part because, in the absence of standard definitions and data, strikingly little is known about its nature, size, and growth at the critical regional level.

Seeking to help address these problems, the Metropolitan Policy Program at Brookings worked with Battelle’s Technology Partnership Practice to develop, analyze, and comment on a detailed database of establishment-level employment statistics pertaining to a sensibly defined assemblage of clean economy industries in the United States and its metropolitan areas.

"Sizing the Clean Economy: A National and Regional Green Jobs Assessment" concludes that:

The clean economy, which employs some 2.7 million workers, encompasses a significant number of jobs in establishments spread across a diverse group of industries. Though modest in size, the clean economy employs more workers than the fossil fuel industry and bulks larger than bioscience but remains smaller than the IT-producing sectors. Most clean economy jobs reside in mature segments that cover a wide swath of activities including manufacturing and the provision of public services such as wastewater and mass transit. A smaller portion of the clean economy encompasses newer segments that respond to energy-related challenges. These include the solar photovoltaic (PV), wind, fuel cell, smart grid, biofuel, and battery industries.

The clean economy grew more slowly in aggregate than the national economy between 2003 and 2010, but newer “cleantech” segments produced explosive job gains and the clean economy outperformed the nation during the recession. Overall, today’s clean economy establishments added half a million jobs between 2003 and 2010, expanding at an annual rate of 3.4 percent. This performance lagged the growth in the national economy, which grew by 4.2 percent annually over the period (if job losses from establishment closings are omitted to make the data comparable). However, this measured growth heavily reflected the fact that many longer-standing companies in the clean economy—especially those involved in housing- and building-related segments—laid off large numbers of workers during the real estate crash of 2007 and 2008, while sectors unrelated to the clean economy (mainly health care) created many more new jobs nationally. At the same time, newer clean economy establishments— especially those in young energy-related segments such as wind energy, solar PV, and smart grid—added jobs at a torrid pace, albeit from small bases.

The clean economy is manufacturing and export intensive. Roughly 26 percent of all clean economy jobs lie in manufacturing establishments, compared to just 9 percent in the broader economy. On a per job basis, establishments in the clean economy export roughly twice the value of a typical U.S. job ($20,000 versus $10,000). The electric vehicles (EV), green chemical products, and lighting segments are all especially manufacturing intensive while the biofuels, green chemicals, and EV industries are highly export intensive.

The clean economy offers more opportunities and better pay for low- and middle-skilled workers than the national economy as a whole. Median wages in the clean economy—meaning those in the middle of the distribution—are 13 percent higher than median U.S. wages. Yet a disproportionate percentage of jobs in the clean economy are staffed by workers with relatively little formal education in moderately well-paying “green collar” occupations.

Among regions, the South has the largest number of clean economy jobs though the West has the largest share relative to its population. Seven of the 21 states with at least 50,000 clean economy jobs are in the South. Among states, California has the highest number of clean jobs but Alaska and Oregon have the most per worker.

Most of the country’s clean economy jobs and recent growth concentrate within the largest metropolitan areas. Some 64 percent of all current clean economy jobs and 75 percent of its newer jobs created from 2003 to 2010 congregate in the nation’s 100 largest metro areas.

The clean economy permeates all of the nation’s metropolitan areas, but it manifests itself in varied configurations. Metropolitan area clean economies can be categorized into four-types: service-oriented, manufacturing, public sector, and balanced. New York, through mass transit, embodies a service orientation; so does San Francisco through professional services and Las Vegas through architectural services. Many Midwestern and Southern metros like Louisville; Cleveland; Greenville, SC; and Little Rock—but also San Jose in the West—host clean economies that are heavily manufacturing oriented. State capitals are among those with a disproportionate share of clean jobs in the public sector (e.g. Harrisburg, Sacramento, Raleigh, and Springfield). Finally, some metros—such as Atlanta; Salt Lake City; Portland, OR; and Los Angeles— balance multi-dimensional clean economies.

Strong industry clusters boost metros’ growth performance in the clean economy. Clustering entails proximity to businesses in similar or related industries. Establishments located in counties containing a significant number of jobs from other establishments in the same segment grew much faster than more isolated establishments from 2003 to 2010. Overall, clustered establishments grew at a rate that was 1.4 percentage points faster each year than non-clustered (more isolated) establishments. Examples include professional environmental services in Houston, solar photovoltaic in Los Angeles, fuel cells in Boston, and wind in Chicago.

The measurements and trends presented here offer a mixed picture of a diverse array of environmentally-oriented industry segments growing modestly even as a sub-set of clean energy, energy efficiency, and related segments grow much faster than the nation (albeit from a small base) and in ways that are producing a desirable array of jobs, including in manufacturing and export-oriented fields.

As to what governments, policymakers, and regional leaders should do to catalyze faster and broader growth across the U.S. clean economy, it is clear that the private sector will play the lead role, but governments have a role too. In this connection, the fact that significant policy uncertainties and gaps are weakening market demand for clean economy goods and services, chilling finance, and raising questions about the clean innovation pipeline reinforces the need for engagement and reform. Not only are other nations bidding to secure global production and the jobs that come with it but the United States currently risks failing to exploit growing world demand. And so this report concludes that vigorous private sector-led growth needs to be co-promoted through complementary engagements by all levels of the nation’s federal system to ensure the existence of well-structured markets, a favorable investment climate, and a rich stock of cutting-edge technology—as well as strong regional cast to all efforts. Along these lines, the report recommends that governments help:

Scale up the market by taking steps to catalyze vibrant domestic demand for low-carbon and environmentally-oriented goods and services. Intensified “green” procurement efforts by all levels of government are one such market-making engagement. But there are others. Congress and the federal government could help by putting a price on carbon, passing a national clean energy standard (CES), and moving to ensure more rational cost recovery on new transmission links for the delivery of renewable energy to urban load centers. States can adopt or strengthen their own clean energy standards, reduce the initial costs of energy efficiency and renewable energy adoption, and pursue electricity market reform to facilitate the use of clean and efficient solutions. And localities can also support adoption by expediting permitting for green projects, adopting green building and other standards, and adopting innovative financing tools to reduce the upfront costs of investing in clean technologies.

Ensure adequate finance by moving to address the serious shortage of affordable, risk-tolerant, and larger-scale capital that now impedes the scale-up of numerous clean economy industry segments. On this front Congress should create an emerging technology deployment finance entity to address the commercialization “Valley of Death” and also work to rationalize and reform the myriad tax provisions and incentives that currently encourage capital investments in clean economy projects. States, for their part, can supplement private lending activity by providing guarantees and participating loans or initial capital for revolving loan funds targeting clean economy projects using new or improved technologies. And for that matter regions and localities can also help narrow the deployment finance gap by helping to reduce the costs and uncertainty of projects by expediting their physical build-out, whether by managing zoning and permitting issues or even pre-approving sites.

Drive innovation by investing both more and differently in the clean economy innovation system. With the needed major scale-up of investment levels unlikely for now, Congress at least needs to embrace continued incremental growth of key energy and environmental research, development, and demonstration (RD&D) budgets. At the same time, Congress should continue its recent institutional experimentation through measured expansion of such recent start-ups as the Energy Frontier Research Centers, ARPA-E, and Energy Innovation Hubs programs. Two worthy additional experiments would be the creation of a water sciences innovation center and the establishment of a regional clean economy consortia initiative. States can also advance the clean economy through maintaining and expanding their own RD&D efforts, perhaps by tapping state clean energy funds where they exist. All should be focused and prioritized through a rigorous, data-driven analysis of the nature, growth, and strengths of local clean economy innovation clusters.

In addition, the “Sizing the Clean Economy“ emphasizes that in working on each of these fronts federal, state, and regional leaders need to:

Focus on regions, meaning that all parties need to place detailed knowledge of local industry dynamics and regional growth strategies near the center of efforts to advance the clean economy. While the federal government should increase its investment in new regional innovation and industry cluster programs such as the Economic Development Administration’s i6 Green Challenge, states should work to improve the information base about local clean economy industry clusters and move to support regionally crafted initiatives for advancing them. Regional actors, meanwhile, should take the lead in using data and analysis to understand the local clean economy in detail; identify competitive strengths; and then move to formulate strong, “bottom up” strategies for overcoming key clusters’ binding constraints. Employing cluster intelligence and strategy to design and tune regional workforce development strategies will be a critical regional priority.

***

The measurements, trends, and discussions offered here provide an encouraging but also challenging assessment of the ongoing development of the clean economy in the United States and its regions. In many respects, the analysis warrants excitement. As the nation continues to search for new sources of high-quality growth, the present findings depict a sizable and diverse array of industry segments that is—in key private-sector areas—expanding rapidly at a time of sluggish national growth. With smart policy support, broader, more rapid growth seems possible. At the same time, however, the information presented here is challenging, most notably because the growth of the clean economy has almost certainly been depressed by significant policy problems and uncertainties.

That question is: Will the nation marshal the will to make the most of those industries?

Downloads

• Full Report
• Executive Summary
• Methodology Appendix
• Media Memo

Video

• Sizing the Clean Economy

For all the debate, speculation, and controversy that has surrounded the hoped-for growth of the so-called “clean” economy and “green jobs” one thing has been in pretty short supply: facts. 

For all the talk of its alluring promise, the clean or green economy remains an enigma, in large part due to the continued absence of standard national definitions and data.

Today that changes with a new report assessing the current nature, size, and growth of the “green” or “clean” economy in U.S. regions. 

Developed by the Brookings Metropolitan Policy Program in partnership with Battelle’s Technology Partnership Practice, our report and its underlying database--entitled “Sizing the Clean Economy”--are not perfect accountings. Still, I think you will agree they offer a compelling new national and metropolitan look at a sector of the economy that has remained at once an important aspiration and a frustrating enigma. Do look over the report; watch video of our release discussion; and check out the special interactive mapping tool we’ve developed--both of which are aimed at shedding further light on the geography of this hard-to-assess sector.

Over the last 18 months we’ve developed and analyzed a detailed database of establishment-level employment statistics pertaining to a sensibly defined assemblage of low-carbon and environmentally oriented industries in the United States and its metropolitan areas.

Covering the years 2003 to 2010 for larger U.S. metros, the resulting information provides a new source of timely information that is both consistently applied so as to allow cross-region comparisons but detailed enough to be of some use to inform national, state, and regional leaders on the dynamics of the U.S. low-carbon and environmental goods and services super-sector as they are transpiring in U.S. regions.

To be sure, localized drill-downs in particular places may capture a fuller profile in some regions. But overall, our new information provides what we believe is a plausible, useful, first-of-its-kind measure of the size and growth of the clean economy as it is occurring in the nation’s 100 largest metropolitan areas. 

What is more, our definition, approach, and data have been structured as much as possible to anticipate the Bureau of Labor Statistics’ own forthcoming “green jobs” count, due next year at somewhat broader levels of geography.  It’s time that all U.S. regions begin to have access to some at least rough order-of-magnitude facts about the size and shape of their clean economies.

Event Information

To access a curated stream of tweets from the #CleanEcon event, please visit this Storify page. Below you will find this event's full webcast archive--or, you may view one of four segments taken from that webcast.

No swath of the U.S. economy has been more widely celebrated as a source of economic renewal than the “clean” or “green” economy. However, surprisingly little is really known about these industries’ nature, size and growth—especially at the regional level. As a result, debates on transitioning to a green or clean economy are frequently short on facts and long on speculation as the nation searches for new sources of economic growth.

On July 13, the Metropolitan Policy Program at Brookings brought together business, economic development and political leaders to review the progress of clean industries, identify policy issues and opportunities, and consider how faster and broader growth of the clean economy could be encouraged at the national, state and regional level. A report and first-of-its-kind database, produced in collaboration with Battelle’s Technology Partnership Practice, was released at the event, providing new measures of the clean economy at the national and metropolitan levels. Also featured was an interactive web tool that allows users to track jobs, growth, segments, and other variables nationally, by state and by region.

Brookings Managing Director William Antholis welcomed participants and Bruce Katz, vice president and director of the Metropolitan Policy Program, presented the findings of this major new report on the status of the U.S. clean economy. Panel discussions followed, presenting the corporate and regional perspective.

After each panel, the speakers took audience questions.

Go to the report »

Go to the interactive web tool »

Video

• Introducing the Metropolitan Clean Economy
• Panel One: The Clean Economy, Firm by Firm
• Panel Two: The Clean Economy, Region by Region
• Clean Economy Closing Dialogue
• Growing the Clean Economy in Philadelphia

Audio

• Sizing the Clean Economy: A National and Regional Green Jobs Assessment
• Sizing the Clean Economy: A National and Regional Green Jobs Assessment
• Sizing the Clean Economy: A National and Regional Green Jobs Assessment
• Sizing the Clean Economy: A National and Regional Green Jobs Assessment