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This article is from the In-Depth Report The Dawn of the Green Economy

Cap-and-Trade Program Creates Green Jobs

The cap-and-trade program created by 11 Northeastern states has begun to deliver revenues that are being used to pay the salaries of new "green collar" workers
albany cap and trade green collar job



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BOSTON -- Scott Newman was laid off in February from his job repairing home oil heaters, a victim of the dismal economy. Today, he sits in a class with a new job, learning how to sleuth out wasted energy in homes.

Newman is in the vanguard of a green-collar corps created by the nation's first carbon cap-and-trade program, operating in 10 northeastern states. Workers are being hired for a booming expansion of energy efficiency programs, financed by money raised from power companies paying for their carbon emissions under the program.

For Newman, 32, of Holden, Ma., the salary – about $50,000 a year – is important. But the job has other attractions, he said: "Now, I'll be doing something a little more rewarding, more environmentally conscious. I'll be trying to help customers save some money; that's a good feeling. And this looks like a field that will be growing."

Call this the first fruits of the nation's new energy economy.

In a Boston suburb classroom at Conservation Services Group, a nonprofit that has been in the energy efficiency business for 25 years, Newman and 11 other men pore over a manual that dissects the structure of houses and how buildings use – and lose – energy.

Just started on their six-week training, they already are deep into dense terms: negative vent pressure, induced draft, heat exchangers, sealed combustion furnace components. Before they are done, instructor Mark Donovan will lead them through the intricacies of heating and air conditioning systems, hot water systems, venting, insulation and a host of rules, regulations and government programs offered to encourage homeowners to waste less energy. The new newly minted auditors then will fan out to make home energy inspections under a Massachusetts program administered through the utility National Grid.

"Every factor changes the dynamic of a house," Donovan, a lanky 32-year old, tells them. "When we go out to tighten up a house, we have to take everything into account."

Conservation Services Group, which operates in 22 states, has hired more than 70 people in the last few months, and expects to keep growing, according to CEO Stephen Cowell. 

"The plans are in place. The demand is there from the customers. The work is being done. People are being hired," Cowell said. "For every staff person we hire, the independent contractors have to hire ten people. If we go in and spend four hours looking at a home and identify, on average, $2,500 to $3,000 worth of work people should do, that turns into four days of actual work."

The cap-and-trade program, called the Regional Greenhouse Gas Initiative, is intended to force power producers in the northeastern states to cut greenhouse gas pollution by requiring them to buy allowances, which will shrink annually, to offset their emissions.

The RGGI cap-and-trade program is touted as a precursor to a national program from the Obama administration. But the weak economy and decisions by power companies to switch to cheaper natural gas have dropped real carbon dioxide emissions in the region to a level about 19 percent below the RGGI caps. Some argue this has made the government-set caps meaningless and undercuts the value of the program; others disagree.

But there is little dispute the program is achieving one main goal, to finance an aggressive expansion of energy efficiency programs. The first auctions of carbon dioxide allowances held in September, December and March produced $262 million for the programs, just the beginning of a steady stream of funds being funneled to the 10 participating states.

The states, in turn, have started distributing grants to utilities and organizations that will run the programs, which have started hiring contractors like CSG to do the actual work.

That is nurturing efforts small and large. On Cape Cod and Martha's Vineyard, a contractor for the Cape Light Compact has hired four new energy auditors to inspect low-income homes. In Clinton, Maine, Weatherization Wizards, a start-up company, has added a third van and workers to meet insulating demands resulting from audits. On the Native American reservation of the Passamaquoddy tribe in eastern Maine, three homes are being inspected to provide a blueprint for weatherizing many of the tribal members' 412 homes.

On a larger scale, National Grid will be hiring 100 more people just to administer the energy efficiency programs in Massachusetts. "We are very pleased," said Tim Stout, vice president for energy efficiency at the utility, which already has seen a sharp increase in energy savings by customers. "The demand for the programs has gone up dramatically, even with the economic downturn."

Saving energy is seen as the easiest and cheapest method of reducing dependence on fossil fuels. Efficiency programs typically spend about 3 cents to save a kilowatt hour of electricity that would otherwise cost from 6 to 19 cents to produce by coal, natural gas or oil power plants. And improvements such as insulation, newer efficient boilers and tighter windows can repay the homeowners' investment by lowering utility bills.

The efficiency programs that were hatched for environmental goals have taken on greater importance as the recession has created a need for new jobs. The RGGI cap-and-trade money is arriving just ahead of an even bigger – but likely short-lived – flush of federal stimulus money also earmarked for energy efficiency programs.

"This is actually going to help revive the economy," said Frank Gorke, director of energy efficiency programs for the Massachusetts Department of Energy Resources. The state has had such programs for about two decades, but with the RGGI and stimulus money, the state will probably "triple or quadruple" the $125 million now devoted to the programs, said Gorke.

"It becomes a question of how much you can spend, how quickly you can ramp up, how quickly you can have the people on the ground," he said.

The number of jobs created will depend greatly on how states shape the programs. It requires far more workers, for example, to inspect and upgrade scores of individual residences than if the program is aimed at commercial users. But improving efficiency at a few big industries could provide greater energy savings.

Kevin Doyle, who runs the Green Economy consulting firm in Watertown, Ma., cautions against hyping the jobs to be created by these programs. In a study he is preparing on Massachusetts for the New England Clean Energy Council, Doyle estimates the RGGI and stimulus programs will support the equivalent of about 1,100 direct, full-time jobs in the next two years in the state.

"That's not a lot of new hires, especially when there are thousands of unemployed carpenters, sheet metal workers, electrical contractors who can do this work," he said. "That's not enough to soak up the currently unemployed people, because our construction industry is in the tank."

The new programs also are bringing some complaints about paperwork and government restrictions. The $40,000 given to the Passamaquoddy tribe, for example, will do little more than audit and insulate three houses. The tribe has to prepare time-consuming grant requests and was required to bypass free audits and hire a state-approved auditor for $75 an hour, grumbled Steve Crawford, environmental director for the tribe.

"It's off to a slow start. I've never seen this kind of oversight," said Crawford. "But once they get it ironed out, it will be a good thing."

This article originally appeared at The Daily Climate, the climate change news source published by Environmental Health Sciences, a nonprofit media company.

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