Green Chemistry Holds Potential to Reverse Job Losses

OAKLAND, CA — The chemical industry has lost 300,000 jobs in nearly 20 years, but could boost employment by embracing green chemistry, according to a report issued today.

The Political Economy Research Institute (PERI) argues that chemical law reform in the U.S., with the right policies and incentives, could spur job creation, open new markets and increase American competitiveness. Its report, "The Economic Benefits of a Green Chemical Industry in the United States," was commissioned by the BlueGreen Alliance.

A growing number of environmental groups, legislators and even chemical industry groups have been calling for an overhaul to the U.S.'s chemicals policy, currently dictated by the Toxic Substances Control Act of 1976 (TSCA). While not all parties are on the same page regarding what changes should be made, they agree that the law, which puts a high burden on the government to prove chemicals are dangerous before they can be regulated, is outdated.

Some on the industry side have warned that regulation could stymie job growth. "Significant increases in the cost of doing business, such as the increases in capital and operating costs that may be experienced as a result of regulatory decisions, can directly impact jobs in our industry," said Michael Walls, vice president of regulatory and technical affairs for the American Chemistry Council, during a March hearing by the House subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending.

The PERI report paints a different picture.

From 1992 to 2010, the chemical industry, excluding pharmaceuticals, saw employment fall 38 percent, with a loss of more than 300,000 jobs, the report says, while the value of chemical production grew about 4 percent each year. That works out to a 1 percent drop in jobs for every 1 percent increase in output of non-pharmaceutical chemicals.

Jobs have fallen, the report says, because sales have not kept up with increases in productivity that require fewer workers. To increase sales, the report argues, chemical companies need to have access to growing global demands and explore new markets. They can do that though innovation and making chemicals that are less harmful to humans and the environment, the report says.

Along with jobs made by gaining new customers and being on the leading edge of greener chemicals, the report says jobs can also be created from changed to chemical feedstocks.

If 20 percent of chemical production switched from making petrochemical-based plastics to plant-based plastics, that would create 104,000 jobs. That's possible because chemical production uses a lot of equipment and little labor to make plastics from petrochemicals. Making them out of plants would require more workers, since agriculture and forestry are more labor intensive. Moving to plant-based plastics could also open more opportunities for companies to source materials from within the U.S., instead of relying on oil imports.

The report also argues that expanding more into bio-based plastics would lessen the impacts of fluctuations in oil markets while increasing competitiveness.

To help companies along, though, the report says there is more needed that just changing the country's laws. There need to be policies like tax credits, research and development credits, loans and other incentives for companies to change the way they make chemicals.

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