lunes, marzo 02, 2009

Permanent or One Time Green Jobs?

This is a synthesis of the leadership advice President Obama and President Fernández need to get our countries out of the recession stronger and sooner. Avoid by all means the uncertain business as usual that induces short term financial capital and one time green jobs; call for the certainty of a well architected reform to induce long term production capital and permanent green jobs.

Permanent or One Time Green Jobs?

By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity
EWPC Systems’ Architect

First posted in the GMH Blog, on March 2nd, 2009.

Copyright © 2009 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to to contact the author for any kind of engagement.

In the EWPC post Reform on Obama Address: Health Care 9; Education 1; Energy 0, I uncovered the insight that President Obama did not called for energy reform as he did for health. That post is an update to the must read EWPC article Shared Vision: Consumer Driven Electricity System Reform (to read any of the documents, please hit the Internet link embedded in the title), whose summary states “Similar to the needed heath system reform, the Obama and the Fernández administrations can benefit all electric system stakeholders with a cost effective consumer driven reform.”

I repeat from the post that if we change ‘health’ with ‘energy’ in a key sentence of Mr. Obama address, it reads “It is time to put in place tough, new common-sense rules of the road so that our ‘energy’ market rewards drive and innovation, and punishes short-cuts and abuse.” Based on what follows, this article further supports the claim in the post that said: “… the Obama administration should expect to identify another ‘trillion dollars in savings over the next decade,’ as a result of the reform.”

To give a lucky lead, Elisa Woods wrote the very timely article Where to find a green job? She goes on to quote that “Most green jobs are not exotic. In fact, the green job of tomorrow is likely the job you have today (or had before the recession). The product you deliver may be different, but the work is much the same, according to a report issued by the Political Economy Research Institute (PERI).”

Immediately, I went to read the report, but at the top the page there were two paragraphs with a great insight that sold me a download. After reading them quickly, my attraction went rapidly towards a link that says: Download "Financing the Green Economy as an Answer to Casino Capitalism". I tried different tricks to download it, but got the message “The file is damage and could no be repaired.” However, after reading slowly the paragraphs the great insight to support the case for reform is still in them. They read as follows:

In his latest article for New Labor Forum, Robert Pollin grapples with two critical questions: how do we build a clean energy economy, and how do we create a financial system focused on channeling money toward productive investment as opposed to destabilizing speculation? The challenge then becomes to combine these goals in a single set of policies: how can we design financial systems that inherently support a clean-energy economy?

The reality is that there are only two possible ways to finance a clean-energy transition—public or private funding—and both sources will be needed. The key will be to ensure that private funds are channeled into green investments and away from fossil fuels. Pollin begins to explore the mechanisms that will leverage the needed private funds along with public expenditures, and guarantee that both sources of funds are channeled towards socially-desirable goals.

As a possible great synthesis of the article, those two paragraphs suggest a management vs. leadership decision of how to channel the stimulus funds. In one hand, management with no reform to very lousy, more of the same, old economy, ineffective one time green jobs, associated with financial capital; in the other, leadership with reform to highly effective permanent jobs of a vibrant clean-energy economy, associated with production capital. I grasp the great insight because of what I wrote back in October 2008, in the EWPC article "U.S. Presidential Elections and the Need for a Global Energy Deal:"

To avoid the collapse of our civilization, we need world leaders to make the commitment to develop a new system based on a paradigm shift mix of regulation and markets, under the realistic assumptions of expensive fuels, finite world limits on environmental impacts, and cheap transaction costs for end-customers that have varying energy needs. Such a paradigm is the Electricity Without Price Controls (EWPC) market architecture and design that is set to attract production capital to the power industry.

The attraction is the result of a virtuous circle of reliable service and innovative markets under stable and simple rules, adding value with the development of the resources of the demand side. Power and energy demand reductions through efficient pricing and energy efficiency may cut energy growth while increasing customer satisfaction to a new plateau that will result in attractive returns on investment.

In synthesis, the IOUs paradigm incremental extensions that attract fossil fuels can only support business as usual financial capital (destabilizing speculation) and one time green jobs, while the EWPC paradigm shift is what will attract production capital to enable permanent green jobs. The next steps are, reform, reform, reform to an EWPC based Energy Polict Act.

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