We hear a lot of dialog these days about “green jobs” and companies “going green,” along with their anticipated impact on the economy. There is definitely a lot of hype—some of it is based on solid assumptions, but some of it may be based more on wishful thinking. So what can we really expect as we continue to see the growth of “green” jobs and businesses?

The Hype
In October 2008, the State of California released its official report on The Global Warming Solutions Act of 2006, which is intended to reduce greenhouse gases to 1990 levels by the year 2020. The report claims implementing this plan, far from costing money, will actually make money. It asserts, “the Plan will benefit California’s economy above and beyond the business-as-usual projections, in 2020, by increasing production activity by $33 billion, by increasing overall Gross State Product by $7 billion, by increasing overall personal income by $16 billion, by increasing per capita income by $200, and by increasing jobs by more than 100,000.”
   This report may be the reason there is so much hype over green jobs and going green in general. The idea is that cleaning up the environment and limiting pollutants can be made into a business that employs people and contributes to our national and global “economic well-being.”

The Conflicting Opinion
Several outside experts have come down on California’s economic analysis pretty hard. The Legislative Analyst’s Office of California called the economic evaluation “inconsistent and incomplete” and said there was no information in the report to show how people were going to make money by cleaning up the environment. Robert Stavins, the Director of the Environmental Economics Program at Harvard University, who formerly served as chairman of the Economic Environmental Advisory Committee of the Environmental Protection Agency, called the analysis “terribly deficient in critical ways.” 
   Like the California government, the federal government also has unwarranted optimism over the prospect of promoting green businesses and creating green jobs. A recent study from the Center for Data Analysis at the Heritage Foundation, a conservative think tank in Washington, D.C., showed the reduction of carbon dioxide through laws that are currently under consideration would cause the net loss of almost a million jobs. This conclusion is supported by the American Enterprise Institute for Public policy Research, where analyst Kenneth Green points out the plan for “green jobs” would affect not just the workers in the coal, oil, gas, nuclear, and automobile industries, but millions of people in other industries because money spent on environmental projects can’t be invested elsewhere.
   Then there’s the current fact that green power is both more expensive and less reliable than traditional sources of energy. Consider wind power. In Texas, The Electric Reliability Council calculates available wind power during periods of peak demand by counting on merely 8.7 percent of wind power’s installed capacity. They only depend on such a small amount because there’s simply no guarantee that the wind will blow when it is needed. In fact, a Texas power grid abruptly cut off 1,100 megawatts of power to customers on a recent day because there wasn’t enough wind to produce energy.

The Tradeoff in Jobs
According to a report from the Natural Resources Defense Council, millions of people in the United States are already working in jobs directly linked to fighting climate change and building a green economy. Although the report recommends retrofitting buildings, increasing mass transit, making automobiles more efficient, and using wind, solar, and cellulosic biomass for power, the people who would do that work are already employed. Some companies might see their position or earnings improved as new government mandates increase demand, but it still wouldn’t result in the huge increase in jobs that has been predicted; existing workers would simply be called to a different job site, such as a wind farm rather than an oil refinery.
   
What to Expect
Like most things in business, it all comes down to profitability. Clean, renewable energy sources and greener business practices, including eco-friendly buildings and supply chains, will be pursued wherever a positive net-present-value argument can be made. But in the short term, meeting aggressive goals for reducing greenhouse gases and making everything from skyscrapers to automobiles more efficient is going to cost money. Will taxpayers be willing to foot the bill? That’s the trillion-dollar question.
   Making the world a cleaner, greener place is not out of the question, in fact developments in technology and demography will take us there in the long term—but it will not happen overnight. Today, fully half of all electricity used in the U.S. comes from burning coal—and we use a lot of electricity. Even if legislation cleared the way to begin building dozens of new nuclear reactors immediately, it would not be possible to replace all that capacity in a decade. 
   There are incredible developments happening right now in a variety of energy sources, including wind, solar, tides, geothermal, and biomass, as well as coal, oil, gas, and nuclear. Over the next 25 to 50 years, we will see an increasingly diverse mix of energy sources meeting all of our energy needs. This will result in viable businesses that will create jobs and be profitable. But before clear winners emerge, there will be many start-ups with many ups and downs, as is the case now with some solar companies experiencing a contraction due to oversupply.
   Lastly, never discount the unparalleled spirit of entrepreneurship in the United States. Technologies based on infotech, biotech and nanotech will solve what now appear to be insurmountable climate problems, while enabling the global economy to grow and standards of living to rise everywhere. 
   To cite just one example, earlier this year the Lawrence Livermore National Laboratory finished building and preparing the National Ignition Facility, which is designed to test controlled, self-sustaining nuclear fusion. It will use a system of 192 giant lasers in a 10-story structure that spans three football fields. When the lasers are turned on, a series of mirrors will focus two million joules of light energy on a pellet of hydrogen the size of a BB. That’s 60 times the energy concentration from any man-made source now in existence. It will create conditions similar to those at the center of our sun, and the fusion of nuclei in the pellet will produce far more energy than the laser energy required to trigger the fusion.
   Basic science like this, along with the inventions of numerous independent entrepreneurs, will provide clean, inexhaustible energy far into the future. When that happens, green businesses and jobs will become a sustainable reality.