Study Shows Which States Are Attracting Jobs, Businesses, and Investment; Five Key Steps to Future Growth
BOZEMAN, Mont. – A new study by Headwaters Economics compares how Colorado, Montana, New Mexico, Utah, and Wyoming—five states with vast traditional and clean energy resources— are taking advantage of clean energy opportunities to create green jobs. The report concludes with five keys to success for the states to further benefit from the emerging green economy while measuring the likelihood that each state’s policies will promote future growth and investment.“The green economy already contributes positively to the region, and it has been growing rapidly in terms of job creation, investment, and production,” said Julia Haggerty Ph.D., the report’s author. “But the opportunities are going to the states that show the most leadership.”
Green Economy Jobs
Using a conservative measurement of green jobs, the report—Clean Energy Leadership in the Rockies: Competitive Positioning in the Emerging Green Economy—found that employment in the green economy has grown significantly faster than total employment. In New Mexico, for example, the number of overall jobs in 2007 was 13 percent greater than in 1995, compared to 62 percent growth in the green jobs sector. Looking at the five-state region, from 1995 to 2007 total job growth was 19 percent, while job growth in the core green economy was 30 percent. Nationwide, overall jobs grew by 10 percent, compared to green job growth of 18 percent from 1995 to 2007.Colorado’s green economy leads the region with the most clean energy-related jobs (in number and as a percent) as well as green business establishments. In 2007 the five states supported 3,567 green enterprises with 50 percent based in Colorado, 16 percent in Utah and in New Mexico, 11 percent in Montana, and 6 percent in Wyoming.
“All of the states have opportunities to benefit from the green economy, but it does not happen by accident,” said Haggerty. “States performing the best—such as Colorado and New Mexico—have made a strong, deliberate, and lasting commitment to growing their green economy.”
The Clean Energy report also measures private and public investment for the five states. In 2008, the study region attracted more than $500 million dollars in clean energy-oriented venture capital, a ten-fold increase compared to 2000 levels. When looking at public funding from competitively-
awarded federal stimulus grants by the Department of Energy, Colorado ranks 15th among the 52 states and territories. Utah and New Mexico fall toward the middle of the pack, ranked 30th and 37th, while Wyoming and Montana ranked 49th and 52nd respectively.
Renewable energy production is growing in all five states, and there is every reason to expect continued rapid expansion. Among the five states, Montana and Wyoming stand out for their wind and geothermal potential, Utah for its solar and geothermal, and Colorado and New Mexico for
strength in all three. Recent data from the wind industry, for example, shows that installed wind capacity among the five states increased by 3,000 megawatts since 1999, with more than two-thirds of that increase occurring in the past three years, 2006–2009.
On a more cautionary note, the study found an uneven record for how the five states are pursuing energy efficiency—a necessary, cost-effective part of any long-term economic strategy. Each state has a mixed record in terms of policy commitments to reducing energy consumption. None of the states, for example, spend money from their own budgets (e.g. other than federal) on state transit, nor do they mandate coordinated land use and transportation planning.
Five Key Steps to Future Growth
States can do a great deal to benefit their future position, and the Clean Energy report concludes with five keys to success needed for the region to foster continued growth:
1) Strategic Pairing of Incentives with Clear Policy Goals. Progress depends on a smart mix of appropriate incentives and regulations, such as Renewable Portfolio Standards with meaningful targets and compliance strategies. Colorado leads the region and the nation with clean energy and efficiency mandates while Utah has failed to create certainty for the clean energy sector with its weak renewable mandate and fossil fuel-focused energy development incentives.2) Encourage and Capture Large-Scale Investment. To attract growing private investment and billions of federal dollars, states must have a mix of policies, incentives, and proven development expertise. Colorado again is a leader, capturing 75 percent of the total venture capital in the region from 1999 to 2008 and 69 percent of energy-related competitive federal stimulus funding. Montana, in comparison, failed to capture any clean technology venture capital in the same period.
3) Cultivate a Well-Resourced Business Environment. Innovative companies require skilled workers, research institutions, and trained workers. New Mexico’s ample financial, logistical, and political support to solar companies has made it central to North America’s solar industry. While Wyoming’s excellent wind resources have encouraged the creation of a nationally-recognized wind technology training program, many of its graduates are leaving the state.
4) Leadership. Demonstrated commitment and understanding of the clean energy economy on the part of state leaders is a key element in attracting growth. The governors of three states—Colorado, Montana, and New Mexico—all have prioritized clean energy. By comparison, Utah and Wyoming
often have an ambiguous and indifferent approach to clean energy; which has made clean energy businesses reluctant to focus their attention and investments in these states.
5) Overcome Limited Infrastructure Capacity. To fully cultivate their renewable energy
resources, the five states must overcome an inadequate transmission grid. In 2004, Wyoming was the first in the region to establish a state entity, the Wyoming Infrastructure Authority, directly responsible for encouraging new transmission generation. Colorado and New Mexico were later (2007) to establish state infrastructure authorities, and Colorado in particular is limited in bonding capacity by the state’s legislative cap on spending increases.
About Headwaters Economics
Headwaters Economics is an independent, nonprofit research group that assists the public and elected officials in making informed choices about energy development, www.headwaterseconomics.org.