One in five Americans is now out of work. 33 million have filed for unemployment since COVID started driving the unemployment rate to over 14.7 percent.
The best way to generate jobs in our communities is to invest in the conversion to renewable energy, to enhance energy efficiency in our buildings and drive the conversion to electric vehicles faster. Dr. Dan Kammen from UC Berkeley has shown that investing in renewables generates 10 times the jobs of investing in central station power plants.
In the short term universal basic income, direct payments to individuals, can prevent catastrophic losses. Denmark, the Netherlands and the UK effectively nationalized private payrolls, telling workers to stay home, but guaranteeing that they would continue to be paid 70 – 90 percent of their salaries over the next three months. They also covered rent for any companies unable to pay. The US opted to expand unemployment insurance, but many applicants have been unable to file.
Fossil futures: Most analysts agree that there is a severely declining future for coal: Just running a coal plant now costs more than installing renewable energy. When the Kentucky Coal Museum puts solar panels on its roof rather than hooking to the coal fired grid at its doorstep, King Coal is dead.
Hydraulic fracturing is a ponzi scheme. Investors are realizing that the enormous sums that they were asked to continue pouring into the industry were likely to never return a profit. Prices to frack a new well vary from $40 a barrel to $90 a barrel, depending on whether you’re drilling in West Texas or horizontally under housing developments, but fracked wells typically last less than a year. Even before COVID-19, traditional oil was lifting for $20 – $10 a barrel in Saudi, with a world average of $40. This was not a viable industry even before oil went negative.
But if that is the case, what is the fiduciary responsibility of investing in oil and gas extraction? Bevis Longstreth, former SEC commissioner, opined in 2018, “It is entirely plausible, even predictable, that continuing to hold equities in fossil fuel companies will come to be ruled negligence.”
This helps explain why more than $11 trillion dollars have been divested from fossil ownership, even before the University of California announced that it was divesting its $80 billion portfolio.
There has been a pervasive belief that Colorado is an extractive industries state. Little could be further from the truth. The regenerative economy in Colorado, has already surpassed the extractive industries of the past. Clean energy delivers 66,223 jobs growing at 9 percent in 2019 compared to oil and gas extraction at 40,420 jobs, declining at 4 percent in 2017. Arts and culture bring delight to life and are a larger creator of jobs and revenue for the state than oil, gas, coal, mining, timbering and the other extractive industries. Arts and culture employ 100,631 people. Outdoor recreation directly employs 229,000, and when direct, indirect and induced employment are tallied, supports a whopping 511,000 jobs in the state, constituting 18.7 percent of Colorado’s labor force. By comparison, oil and gas support 89,000 direct, indirect, and induced jobs, almost six times fewer than outdoor recreation. Outdoor recreation is harmed by the extractive industries, as climate change threatens our skiing, fracking fouls our air and mining tears up the wild lands tourists seek for recreation.
Most jobs are created by entrepreneurs. The Kauffman Foundation has reams of details on this. In the US, the Kauffman Foundation found that in every year from 1977 until 2013, the large companies were net job destroyers. Only small companies and startups were net job creators. They have a recent piece on how to support small businesses.
There is plenty of money to pay for the conversion to a regenerative economy, so long as Congress allocates money as opposed to selling bonds, which require interest payments. This is the conclusion of Dr. Randall Wray, Dr. Stephanie Kelton and their colleagues who allocate what is known as Modern Monetary Theory. In a down economy, especially one without full employment, spending into the real economy will stimulate the private sector and pay for itself. The only limit on this is inflation which we are a very long way away from that. By way of example, the Quantitative Easing implemented after 2008 caused no inflation. The true backing for the US dollar is not gold. It is 330 million very productive, free people and a huge amount of productive real estate with massive natural resources. For more on this, see The Deficit Myth by Dr. Stephanie Kelton.
Wray and Kelton also call for long term job creation via a guaranteed jobs program as opposed to universal basic income. (UBI is okay as an emergency cash stimulation, but guaranteed jobs is the preferred long-term solution.) It would give non-governmental organizations and local governments as much capital as needed, and they can usefully deploy hiring people at a living wage to do the work that the market is failing to deliver including child care, elder care, teaching, restoration of damaged ecosystems and more. This system can ensure the end of structural unemployment and entrenched inequality. It would pay for itself over about five years in reduced welfare costs. The following are some of the measures Wray and Kelton suggest:
- Use stimulus for abandoned oil wells – gives jobs for oil field workers, as bridge to renewables
- GND efforts – IMF Chief: $1 trillion post coronavirus stimulus must tackle climate crisis – invest emergency loans into green sectors, scrap subsidies to fossil fuels and tax carbon
- Green New Deals– Merkel, EU businesses, South Korea
- The Energy Transitions Commission, including CEO signatories from Royal Dutch Shell, Bank of America, Rio Tinto Zinc and HSBC
- Our LASER work- This is a free, downloadable how-to manual for local economic renewal, road tested from Kazakhstan to South Africa to Serbia to communities across the North