I’ve been thinking for a long time about this post, and recent news out of Saudi Arabia provided the perfect impetus. You know I’m 100% supportive of transitioning to clean, renewable energy – it’s good for the planet, it’s good for human health, and it’s ultimately good for the economy. I honestly believe that. But, what about the jobs that will be lost by shrinking (and ultimately abandoning) the fossil fuel industry?
The key here is helping these localities and these people transition to the new clean economy.
Last week, Saudi Arabia outlined its plans for diversifying beyond just oil. Because of low oil prices, Saudi Arabia faces a budget deficit of about $100 billion, so they have announced efforts to enter the IT, healthcare, and tourism industries – which will make their economy more resilient in the face of changing oil prices.
The country’s state-owned oil company, Saudi Aramco, is investing in other industries, such as shipbuilding, to create a new future for itself; it is also using its resources to administer training programs to prepare employees for new roles in these new industries. Chairman of Saudi Aramco, Khalid al-Falih, says
“Saudi Aramco will be a bridge for a transition away from itself.”
Wow, what a quote – right?? They know the future of their company is at risk, and they are investing to not only transition the company into new industries but also to train its employees to do the same. That’s good business, good economic development, and shows admirable loyalty to its employees.
Saudi Arabia is diversifying for the sake of its economy (rather than environmental reasons) because they are so financially dependent on oil and oil prices are currently very low. But the reasoning is less important than the action – they are proactively working to foster new industries…and we should be doing that, too. We should be helping states like Wyoming, West Virginia, Kentucky, Illinois, and Pennsylvania (the top 5 coal-producing states in the U.S.), whose economies rely heavily on their large coal industries. (Although, it should be noted that in Kentucky, less than 1% – about 13,000 out of 1.85 million – of jobs belong to the coal industry; compare that to McKinsey Global Institute estimate that about 90% of Saudi Arabia’s government revenue come from oil, and 2/3 of Saudis are employed by the public sector). We can’t just bury our heads in the sand and pretend that climate change isn’t happening for the sake of protecting jobs. We need to create new jobs – ones that help protect our environment and that provide safe, reliable, well-paying employment for our citizens.
A study by the Union of Concerned Scientists estimates that transitioning to 25% renewable energy by 2025 in the U.S. will generate over 200,000 new jobs (3 times as many as equivalent electricity production with fossil fuels would require) and nearly $300 billion in economic benefits. But, that doesn’t necessarily ease the fears of people worried about losing their jobs. We need to devote serious time and energy to identifying the regions that will see high rates of job loss with the transition away from fossil fuels and help them create and implement transition plans. Help them identify new industries that can take up residence. Help them implement workforce training programs so that citizens are attractive job candidates and are ready to take on the challenges of a new position. Help facilitate a transfer program so that people losing their jobs in the fossil fuel industry know about new opportunities in the renewable sector (or other sectors that come to town) and can receive job application advice and assistance. Maybe provide some sort short-term loan assistance so that people in between jobs for a few months don’t get into serious financial trouble.
I don’t know exactly what this transition program looks like, but I do know it’s going to be critical to smoothing the path toward clean energy and away from fossil fuels.