Green jobs vs. fossil fuel jobs

Most of us know that by now, wind and solar energy are the cheapest source of energy in almost all countries, even without government subsidies (and yes, that includes the US, where wind energy in the West Texas Plains and Californian solar energy are the two cheapest forms of energy in the country). But somehow, what isn’t discussed enough is that renewable energy is also a massive job creation machine.

I get that politicians who represent coal mining and fossil fuel dependent districts are trying to stall or block the transition from fossil fuels to renewable energy. After all, that transition brings with it the threat of voters losing their jobs. If the parliamentary majorities are tight, that means that a green energy transition becomes impossible because the politicians representing fossil fuel dependent districts can block legislation. That is why Joe Manchin, Democratic Senator from West Virginia is the most powerful man in US politics right now.

But has anyone discussed the jobs Joe Manchin could create in his state by installing renewable energy factories there? Did anyone try to buy him off by promising investments in West Virginia including retraining for coal miners and guaranteed jobs in the newly established factories for wind or solar energy? Maybe they did and then resistance came up against this kind of industrial policy that distorts free markets. But the number of jobs created by green energy is a multiple of those created by fossil fuels.

The IMF recently summarised the impact the transition to green energy has on jobs. Below is the key chart that shows the number of job years created per GWh of electricity generated. Solar power and biomass facilities create about twice as many jobs per unit of electricity produced than coal or natural gas. Wind energy about 1.5 times as many jobs and nuclear some one-third more jobs per unit of electricity than coal or gas.

Switching from fossil fuels to renewable energy should be a no brainer even if you don’t believe in climate change because you end up with an electricity source that is cleaner and doesn’t pollute the air or water, thus keeping residents and their children away from harm. On top of it, it is cheaper than fossil fuels and it creates more jobs. Switching to renewable energy has nothing to do with fighting climate change or saving the planet. It is the rational thing to do even if all you are interested in is money and the bottom line.

Job elasticities of different energy sources

Sources: Kim and Mohommad (2022)