Thursday, April 23, 2009

Green is for grow

Adam Morton and Mathew Murphy 
The Age, April 24, 2009

IT IS a line that is often heard: a time of crisis is a time of opportunity. The opportunity most commonly linked to the financial crisis is green jobs — in emerging industries, such as renewable energy, and the re-skilling of those already working in manufacturing, construction and services.

Today, a forum of 200 community leaders convened by the environment and welfare sectors will hear a blue-sky plan for Victoria's employment future. An analysis by Environment Victoria found about 26,000 jobs could be created in five industries with the right investment and policy shifts. It is likely to be a contentious push, involving public investment when the budget is under strain and some increased costs. Construction, for example, would face higher landfill levies to encourage recycling.

But while there may be disagreement over the detail, there is broad agreement from industry and unions that incentives are needed.

Environment Victoria campaigns director Mark Wakeham, who will launch the research today, says Australia has been slow out of the blocks in embracing green jobs. While US President Barack Obama has pledged $US150 billion ($A212 billion) over 10 years to create 5 million green jobs, Australia offered little before the Federal Government promised $3.9 billion for ceiling insulation in a recent stimulus package.

"Everyone likes the idea of green jobs, but they don't just materialise," Wakeham says. "Smart governments are supporting green industry development, not leaving it up to the market to decide what happens."

Tim Piper, head of the Victorian branch of the Australian Industry Group, stresses that any push towards sustainability needs to emphasise jobs — retaining existing ones as well as creating new industries. He says much of the shift would involve re-training engineers, plumbers and people in the service sector. A recent CSIRO report suggested 3.2 million jobs would need to be "greened" over the next seven years.

"Companies know already that they need to adopt green skills, but I think the truth is not that far away where we adapt green skills because it's profitable to do that," Piper says.

He wants the Government to run an industry-wide green skills audit to help businesses get up to speed.

The Brotherhood of St Laurence, which co-organised the forum, says any green jobs must have a third goal beyond the economy and the environment — helping the poor.

This would include not only jobs for the unemployed, but cutting energy bills through improved efficiency.

For its part, the State Government is quietly listening. Last week it called on 15 industry players to offer their expertise at a round-table with the Premier and four ministers. The result will become clear in June, when it releases a green jobs plan.

Solar hot water

TARGET: 1590 JOBS USE of solar energy to heat water is growing at 20 per cent a year across Australia, but this just reflects the low starting point. Only about 7 per cent of homes nationwide have solar water heating, and the spread is uneven. Every second house in the Northern Territory and one in five West Australian homes has a solar hot water supply. In Victoria, it is just 3 per cent.

The job most commonly linked to solar hot water is plumbing, and the need to train "green plumbers" is gaining traction. About 200 people recently turned up to see Premier John Brumby launch a $9 million training centre in Brunswick. But plumbers represent only a fraction of the jobs in solar hot water. Most are in administration, sales and manufacturing. The Environment Victoria analysis estimates the industry supports 700 jobs and generates sales of $78 million a year. Aquamax makes solar water heaters in Moorabbin, and Everlast builds tanks in Dandenong.

It says the industry could grow dramatically through the introduction of cash support — rebates or tax incentives — a compulsory phase out of electric hot water systems and minimum building efficiency standards. This would be on top of existing state and federal rebates, which are capped at $2500. There is a precedent for compulsory installation. Already, Victoria requires all new houses to be fitted with a rainwater tank or a clean water system, either solar or heat pump.

Overseas, solar hot water has been compulsory in Cyprus and Israel for nearly three decades. The respective market reach is 93 and 85 per cent. Boosting installation to 30 per cent of Victorian houses by 2020 would mean 57,000 installations a year. The industry would treble in size, creating about 1500 jobs directly and another 90 full-time plumbing roles. Assuming household greenhouse cuts are factored into the Federal Government's climate policies, it would cut emissions by 1.8 million tonnes a year.

Rail manufacturing

TARGET: 9150 JOBS VICTORIAN rail jobs have been declining steadily over recent decades, with the contribution of manufacturing to the state's gross domestic product falling from 35 per cent in the 1980s to 12 per cent now. Compounding the problem, NSW and Victoria have awarded $3.8 billion of rail contracts to overseas manufacturers.

The Green Jobs report states that about 1000 people are directly employed by the major rolling-stock manufacturers in Victoria and another 5000 to 10,000 are employed in the supply chains. But despite the drop-off, rail is one area where the downward trend could be turned around as governments pledge to deliver major infrastructure programs. The Victorian Transport Plan commits $3.6 billion in new rail rolling stock over four years. The report finds that by manufacturing just half of this stock in Victoria, 2250 full-time jobs would be created and another 5400 to 6300 full-time jobs would be created indirectly through the supply chain. The industry also estimates it will need 85 engineers and 175 trades people in Victoria every year for the next five years due to an ageing workforce. More training is required, and retrenched workers, particularly in the car industry, have to be moved into rail.

Strengthening local content requirements would also boost jobs. The State Government requires 40 per cent of local content for train purchases but, as most maintenance is done locally, it can meet that requirement and still have the trains manufactured overseas. The target is also short of the US — which requires 60 per cent of local content for its rolling stock — and China (70 per cent). Despite having one of the world's largest tram networks, Victoria has not manufactured trams for 25 years. By agreeing to buy 40 trams a year for 10 years, Victoria could give full-time positions to 150 workers and 450 extra employees through the supply chain.


TARGET: 4000 jobs WIND power has been the most advanced renewable-energy technology in Australia, but globally we are considered wind-energy laggards. The Australian wind industry employs more than 2000 people, double those working in the sector in 2005. Wind power across the country constitutes about 1300 megawatts, a big increase from 2000, when there was just 100 megawatts.

The Federal Government's mandatory renewable energy target scheme, which requires electricity retailers to source 20 per cent of their power from renewable resources by 2020, is the main driver. It will increase wind power fivefold over the next seven years and generate $4 billion in investment and an extra 4000 workers in the industry. But the Green Jobs report says the longevity of these jobs is threatened by the draft MRET legislation, which sees renewable generation peak at 45,000 gigawatt/hours in 2024 but taper off to 23,000 by 2030. The result, it says, will be a rush to develop wind projects, with investment coming to a halt by about 2016.

Victoria now has 1650 megawatts of wind projects approved and a further 2513 megawatts proposed. Despite this, Keppel Prince in Portland is the only wind power equipment maker in Victoria. The company employs 430 people, 200 specifically working on wind energy.

For projected growth rates to be achieved, Australia needs skilled wind farm developers, manufacturing, operations and maintenance staff.

Energy and water efficiency

TARGET: 9050 JOBS THE most recent figures on the sector come from 2002. At that point, energy efficiency was a $3.8 billion industry nationwide, employing 11,200 people. The water-efficiency industry was valued at $3.5 billion, employing 25,000 people.

The Green Jobs report states that, with "ambitious" environmental policies, the energy-efficiency sector could grow to $190 billion and water efficiency to $35 billion by 2030. The state and federal governments have made inroads into water and energy efficiency — as anyone in the industry will tell you, it is the "lowest hanging fruit" — but more work needs to be done.

The Rudd Government's "pink batts policy" provides grants of up to $1600 to retrofit either ceiling insulation or solar water heating. Up to 2.7 million homes are set to benefit. If the 25 per cent of Victorian homes without insulation participate, it will generate between 400 and 800 jobs. Nationally, the program is expected to create up to 20,000 jobs.

The State Government is playing its part, too. Its five-star housing standard has delivered big energy-efficiency improvements, but about 1.9 million Victorian homes built before 2004 still have energy ratings of two stars or less. About half Victoria's homes do not have efficient shower heads and 40 per cent of houses more than 30 years old still have at least one single-flush toilet.

What this means is that the potential for green jobs is enormous. The report proposes that a million homes be retrofitted for energy and water efficiency over the next five years. The retrofitting, which costs about $2800, would create between 3100 and 6900 jobs and save more than 3 million tonnes of greenhouse gas and 32,500 megalitres of water each year. While 40 per cent of these jobs will only require semi-skilled labour, training would be essential. The Victorian plumbing industry estimates it already needs up to 4000 new plumbers, while existing Federal Government policies will require at least 500 more.

It is estimated that a rainwater-harvesting program could also generate an extra 2150 direct and indirect jobs.


TARGET: 2310 jobs RECYCLING barely existed 20 years ago. Now there is a waste-recovery rate of more than 60 per cent. Despite this, there has been no significant reduction in the roughly 3.9 million tonnes of rubbish that ends up in landfill. Recycling employs more than 6500 Victorians and generates $3.6 billion of economic activity.

Kerbside recycling has taken off. Nearly 1900 people are employed in the transportation, while another 2060 sort it. About 2600 reprocess materials. The US EPA estimates that one job in landfill becomes six if the material is recycled. Following this, an increase to 80 per cent of Victorian rubbish being recycled would create 925 jobs in sorting waste and another 1175 in reprocessing.

Environment Victoria says these are conservative estimates — an increase in recycling will mean that new materials such as computers are included in much greater numbers. Some of these will be more difficult to collect, sort or reprocess. Using the rapidly expanding Irish electronic recycling industry as a guide, the researchers estimate another 210 jobs could be created in Victoria if it expanded at the same rate. To get there may require overhauling recycling in the Melbourne CBD.

Flying in the face of local policy, the analysis also factors in a South Australian-style refund for drink bottles. It estimates it would boost recycling of drink containers from just over 50 per cent to Californian levels, about 76 per cent.

Other proposals include the creation of local recycling hubs for household items not suitable for kerbside recycling, such as paint and timber, and discouraging landfill by boosting levies from $9-$15 a tonne to the charges favoured in Sydney — $46.70, and rising $10 a year.

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