Post Cap & Trade, Manufacturing Jobs Will Move To US States With Greener Power, Not China

States that could, in the future, attract manufacturing jobs using low reliance on coal as a marketing tool. Image credit: J.Laumer, with USEIA data.

A few days ago I asserted that total coal consumption per state is a more useful metric than coal dependency for electricity. In this post, which borrows a graphic from the linked one, I'd like to take the insight to the next level.

Job "leakage," from here on out, is also an interstate game.
Post Cap & Trade, added operating costs from high coal consumption will provide a long-term incentive for manufacturers to move good paying jobs to "green power" states. By "green power" states I mean those with strong nuclear and hydroelectric power capacities, or which can add to them (exemplified by states shown in the list above), with wind and solar as backup. Canada, which has a great hydroelectric capacity, may also be in this game. Bottom line: Congress should not focus on job loss to Asia as the key issue, unless - and this is a big unless - China flies way ahead of the US on transitioning from coal to nuclear power. Here's a short list of other conditions and assumptions that would shape this future.Short list of factors which will contribute to the "green job leakage" scenario in North America.

  1. Mexico not a competitor because highly fossil fuel dependent.

  2. Texas could expand it's significant existing nuclear capacity and has a huge potential for adding wind power. Half of the state's electricity is derived from burning coal. The balance comes from nuclear power, hydropower and renewables. Much hangs on whether export of green power will be allowed (presently is not).

  3. Canada's ability to compete for green jobs would be eroded by exporting green power directly to northern tier US states and is controlled also by NAFTA.

  4. Assumes value of US dollar on world markets remains low.

  5. Assumes cost of oil goes up and remains high, increasing the cost of transoceanic shipping.

  6. Assumes that the power of "right to work"s states to attract jobs remains diminished based on continued loss of bargaining power by labor unions.

  7. Assumes US hydroelectric capacities are not significantly diminished by climate change.

Tags: Texas


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