Oakland, CA — The Midwest's manufacturing hub stands to reap the benefits should the U.S. government enact strong federal energy policies, a recent report found.
According to research from the nonprofit Climate Group and the University of Michigan, aggressive federal clean energy policies could generate billions in additional market revenue and create more than 100,000 jobs in a region whose manufacturing sector has been hard hit by the economic recession.
"The Midwest already has the value chain needed to produce many low carbon technologies that are vital to America's future," Amy Davidsen, The Climate Group's U.S. executive director, said in a statement. "This report shows that the right policies will spur much-needed job and revenue growth."
"American Innovation: Manufacturing Low Carbon Technologies in the Midwest" examined the impacts on three subsectors of manufacturing -- wind turbine, hybrid powertrain and advanced batteries -- from three specific policies. The policies include a per ton price on carbon of $17; a green economic stimulus program similar to the American Reinvestment and Recovery Act of 2009, and a 20 percent renewable electricity standard (RES) by 2020.
Two dozen states plus the District of Columbia have RES policies in place, while another five have nonbinding goals.
A combination of these policies could lead to $7.3 billion in new market revenue for wind turbine components, in addition to roughly $480 million in tax revenues that would benefit state and local governments. More than 63,000 jobs could be created for this manufacturing sub-sector.
Meanwhile, advanced battery manufacturers in the Midwest could see surge in market revenue of nearly $1.475 billion, tax revenue of $90 million, and new jobs totaling nearly 12,000. Hybrid powertrain makers would enjoy $3.8 billion in market revenues, $252 million in tax revenue and nearly 31,000 new jobs.
The report, however, is limited in scope. It estimates benefits from these policies in the form of job creation, and tax and market revenues between 2010 and 2015, without examining any potential costs or job losses in other sectors. It also only covers five states -- Indiana, Illinois, Michigan, Ohio and Wisconsin.
Image CC licensed by Flickr user ralphbijker.