Louisiana Workforce Commissionwww.LMI.LaWorks.net/Green

September 2011

The Greening of Louisiana’s Economy:Summary Report

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In 2009, Louisiana and Mississippi partnered to research economic

development opportunities and workforce needs associated with

the region’s green economy. Through a $2.3 million grant from the

U.S. Department of Labor, a consortium of the Louisiana Workforce

Commission, Louisiana State University, Mississippi Department of

Employment Security, and Mississippi State University conducted

an extensive study of economic activity that is beneficial to the

environment. This and other research products were developed as

part of that effort.

Summary Report

i

Introduction...........................................................................ii

Defining Green ......................................................................1

The Green Economy ..............................................................2

Job Growth Opportunities ....................................................9

Conclusion ...........................................................................10

Notes ...................................................................................11

Contents

On the cover (from left to right):

groundbreaking with Gov. Bobby Jindal.Photo: Louisiana Economic Development

Man installing alternative energy photovoltaic panels on roof.Photo © depositphotos.com/Elena Elisseeva

Worker at plant.Photo © BP Biofuels North America

Aerial phot of coastal protection barrier islands in coastal Louisiana.Photo: Tim Carruthers, IAN Image Library (ian.umces.edu/imagellibrary)

The Greening of the Louisiana Economy

ii

Introduction

As part of a larger federal initiative, the Louisiana Workforce Commission and Louisiana State University undertook a study beginning in December 2009 of the greening of Louisiana’s economy. The greening of the economy refers to a variety of economic activity ranging from the construction of large-scale biodiesel plants to the installation of solar panels on residential property. Similarly, it includes major R&D projects aimed at commercializing new technologies for addressing environmental concerns and future energy needs. The greening of the economy also refers to gradual trends observed over a longer timespan such as an increasing rate of recycling by Louisiana households and businesses as well as the increasing demand for more environmentally friendly products and technologies.

Our goal in this study was to provide Louisiana’s employers, workers, and policymakers with the information they need to take advantage of the greening of Louisiana’s economy. More specifically, the research was intended to establish a baseline for measuring green employment, examine job growth opportunities related to green economic activity, and investigate the changing skill requirements resulting from the greening of the economy.

Various data collection techniques were employed including Louisiana’s first ever direct survey of employers asking about green employment and activities. Other information gathering efforts included stakeholder interviews, online questionnaires, focus groups and a thorough review of existing literature from other states. Input was sought from the state Workforce Investment Boards; university and technical college systems; numerous state agencies; industry groups; trade associations; employers; and environmental advocacy groups. The information collected over a 21-month period has produced a body of knowledge on the greening of Louisiana’s economy in dozens of reports available on the Louisiana Workforce Commission’s Growing Green website. This document summarizes the major research findings and provides an overview of the information and data available on the Growing Green website.

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1

Defining Green

At the outset of the project, the research team was tasked with defining green jobs and the scope of the green economy. Although there is not a commonly accepted definition of a green job, a consensus has begun to emerge on the definition’s structure among a handful of states and federal agencies conducting similar studies. The definition used in this st udy of Louisiana’s green economy is based on one developed by the U.S. Department of Labor. Green jobs are defined as being involved in one of seven areas of green economic activity. The following green activity categories define the breadth of the green economy.

Renewable Energy

Energy Efficiency

Greenhouse Gas Reduction

Pollution Reduction and Cleanup

Recycling and Waste Reduction

Sustainable Agriculture, Natural Resource Conservation and Coastal Restoration

Education, Compliance, Public Awareness and Training Supporting Categories 1 through 6

1.

2.

3.

4.

5.

6.

7.

Each activity category includes: the research, development, production and distribution of a final good or service; the supply of unique parts or inputs to a final good or service; and production processes and business practices regardless of the final good or service.

The definition distinguishes between two levels of a job’s involvement in green activity. Primary green jobs are defined as those having a primary job function, i.e. a function consuming more than 50 percent of the employee’s time, in one of seven green activity categories. Support green jobs are those essential to an organization’s involvement in one of the activity categories, but not requiring more than 50 percent of an employee’s effort.

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The Green Economy

Green economic activity exists in every sector of the economy. However, the types of environmentally friendly activities vary greatly across sectors. They can range from the development of innovative technologies that address growing energy demand to the implementation of business initiatives aimed at reducing the impact of a company’s operations on the environment. This range of green economic activity has varying implications for the workforce. For instance, a company that produces biofuels or installs solar photovoltaic technology will undoubtedly require its employees to be heavily involved in green activities. Alternatively, a company that does not produce a green good or service, but is attempting to reduce its impact on the environment by implementing new business practices or production processes would likely require only a fraction of their employees’ time to manage or implement such an initiative.

The first ever survey of green employment in Louisiana focused on quantifying current levels of employment and the distribution of employment across industries and occupation groups. The survey, conducted in the fourth quarter of 2010, forms a crucial part of this research initiative. A sample of 12,882 business establishments from every region of the state were asked to participate in the survey. Direct responses from individual employers allowed for the most accurate estimate of current green employment in Louisiana to date. These estimates were augmented by a comprehensive qualitative assessment of green economic activity in Louisiana which included focus groups and interviews with stakeholders throughout the state. The resulting body of knowledge provides a very broad perspective of how the greening of the global economy is impacting Louisiana businesses, workers and consumers.

Analysis of the survey results reveal an estimated 97,796 primary and support green jobs in Louisiana representing 5.3 percent of total nonfarm employment. Primary green jobs, those having a primary job function in a green activity, account for 30,205 jobs, or 1.6 percent of total nonfarm employment. Support green jobs contribute 67,591 jobs to total green employment representing 3.7 percent of nonfarm employment.

Further analysis of the survey results by industry provided the number of primary green jobs for each North American Industry Classification System (NAICS) sector. The two sectors with the largest number of primary green jobs are the Administrative and Waste Services sector and the Construction sector. The large number of primary green employment in the Administrative and Waste Services sector is a result of establishments in the sector that are conducting recycling operations and industrial hazardous waste management. The Construction sector’s large number of primary green employment illustrates the workforce impact of growing interest in sustainable building practices and construction work related to the installation of green technologies on existing structures.

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The overall impact of a greening economy on the workforce is better observed by viewing green employment as a percent of total employment. This perspective demonstrates the varying degree to which workers within different sectors of the economy are becoming involved in activities that benefit the environment. Figure 2 on the following page shows the percent of NAICS sector employment comprised of primary and support green employment. The Agriculture, Forestry, Fishing and Hunting sector has the highest rate of total green employment followed by the Administrative and Waste Services sector. Figure 2 also provides a comparison of primary green employment versus support green employment. The difference in the rate of primary versus support green employment is important because it illustrates the distinction between the number of employees involved in an activity and the amount of time employees are spending on an activity. The Mining, Quarrying, and Oil and Gas Extraction sector has a large number of employees involved in activities that help protect the environment. However, the large majority of these employees do not have a primary job function in these activities. This sector demonstrates the workforce implications of an industry in which businesses are working to limit the environmental impact of their operations even if the business is not producing a green product or service.

0 1000 2000 3000 4000 5000

Accomodation & Food Services

Agriculture, Forestry, Fishing & Hunting

Retail Trade

Other Services (except Public Administration)

Professional, Scienti�c & Technical Services

Public Administration

Manufacturing

Wholesale Trade

Construction

Administrative & Support & Waste Management& Remidiation Services 4,992

3,646

2,959

2,783

2,659

2,362

1,932

1,490

1,321

1,183

Figure 1

Primary Green Employment by Industry

The Greening of the Louisiana Economy

4

0 5 10 15 20 25

Management of Companies & Enterprises

Educational Services

Finance & Insurance

Information

Health Care & Social Assistance

Retail Trade

Accomodation & Food Services

Arts, Entertainment & Recreation

Utilities

Mining, Quarrying & Oil & Gas Extraction

Transportation & Warehousing

Manufacturing

Real Estate & Rental & Leasing

Public Administration

Construction

Professional, Scienti�c & Technical Services

Other Services (except Public Administration)

Wholesale Trade

Unclassi�ed

Administrative & Support & Waste Management & Remediation Services

Agriculture, Forestry, Fishing & Hunting

Primary Green Jobs Support Green Jobs

Figure 2

Primary vs. Support Employment by Industry

Throughout the project, more emphasis was put on collecting detailed information about primary green jobs because of the implicit effects of their greater involvement in green economic activity. During the survey, businesses were asked to provide job titles of employees with primary job functions in green activities. This information helped identify the types of employees at these organizations that are most impacted by the greening of the economy. By knowing the job titles of green job incumbents, it is also possible to infer the nature of the work most often associated with green economic activity. This additional information allowed for the analysis of green employment estimates by occupational groups based on the Standard Occupational Classification (SOC) taxonomy. Survey results indicate that the largest share of primary green employment is located in the Construction and Extraction occupational group.

The research shows that green economic activity is occurring in every region of the state. There are many examples of businesses profiting from efforts to protect or restore Louisiana’s environment ranging from coastal restoration construction projects south of Houma to the recycling of natural gas drilling fluid in the Haynesville shale near Shreveport. Survey results indicate the Baton Rouge regional labor market area (RLMA) had the largest

Percent of Total Employment

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Table 1

Louisiana’s Primary Green Jobs by Occupational (SOC) Group

Primary Occupational Group Green Jobs Employmenti Percent Primary

Architecture & Engineering 1,210 34,780 3.5

Arts, Design, Entertainment, Sports & Media 71 15,950 0.4

Building & Grounds Cleaning & Maintenance 578 56,990 1.0

Business & Financial Operations 313 57,230 0.5

Community & Social Services 67 28,380 0.2

Computer & Mathematical 31 16,960 0.2

Construction & Extraction 6,333 119,260 5.3

Education, Training & Library 677 107,880 0.6

Farming, Fishing & Forestry 1,638 3,780 43.3

Food Preparation and Serving-Related 1,098 162,460 0.7

Healthcare Practitioners and Technical 318 111,480 0.3

Healthcare Support NR 58,540 <0.1

Installation, Maintenance & Repair 2,820 103,080 2.7

Legal 42 13,850 0.3

Life, Physical & Social Science 1,443 12,230 11.8

Management 3,639 85,130 4.3

Non-Classifiable 1,386 NA NA

Office & Administrative Support 1,262 299,040 0.4

Personal Care & Service 41 50,680 0.1

Production 2,969 121,380 2.4

Protective Service 961 54,530 1.8

Sales & Related 1,005 200,120 0.5

Transportation & Material Moving 2,301 158,220 1.5

Total 30,205 1,871,950 1.6

i Employment data from Louisiana QCEW 2010 2nd Quarter

NR – Not reported due to low number of responses

NA – Not Applicable

Source: LSU Division of Economic Development

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Figure 3

Primary Green Employmentby Regional Labor Market Area

number of primary green jobs. This high level of green employment in the capital region is partly the result of sate agencies such as the Department of Environmental Quality and the Department of Wildlife and Fisheries that have core missions of protecting the state’s environment and conserving its natural resources. A large concentration of the Baton Rouge region’s primary green employment is also located in the Professional and Technical Services, Construction, and Manufacturing sectors. The region with the second highest primary green employment is the New Orleans RLMA. This region also has a concentration of primary green employment in the Construction sector as well as in the Administrative and Waste Services and the Accommodation and Food Services sectors.

Although many of the primary green jobs in Louisiana are found in the southern regions of the state, this result is partly driven by higher overall employment in those regions. When looking at green employment as a percent of total employment, primary green employment ranges from 1.2 percent of total employment in the Monroe region to 2.1 percent in the Baton Rouge and Lafayette regions. Even with the lowest rate of primary green employment, the Monroe region has some significant projects that demonstrate opportunities the greening economy are bringing to the region. One of these projects is Myriant Technologies’ new sustainable specialty chemical plant in Lake Providence, Louisiana. The plant is the world’s largest bio-based succinic acid refinery and shows how the state’s chemical manufacturing industry can benefit from the green economy.

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The set of activities that generate green employment is diverse, but each can be grouped into one of seven core areas of economic activity. Some categories such as Pollution Reduction and Cleanup include activities that are a result of long established policies or regulatory framework while other categories are comprised of activities that are driven by innovative technologies or new concerns over anthropogenic climate change. Although these categories may differ in many ways, each has a discernible positive impact on the environment. Table 2 provides estimates of primary green employment in Louisiana for each green activity category.

Table 2

Louisiana’s Primary Green Jobs by Activity Category

Activity Category Primary Green Jobs Percent of Total

Renewable Energy 581 1.9

Energy Efficiency 4,004 13.3

Greenhouse Gas Reduction 293 1.0

Pollution Reduction and Clean-up 6,975 23.1

Recycling and Waste Reduction 9,523 31.5

Sustainable Agriculture, Natural Resource Conservation and Coastal Restoration 4,502 14.9

Education, Compliance, Public Awareness and Training Supporting the Other Categories 4,327 14.3

Total 30,205 100.0

Source: LSU Division of Economic Development

The Renewable Energy category includes activities related to the production of energy from natural and sustainable resources. It includes services such as the installation of solar technology on residential property, an industry that has witnessed considerable growth in recent years as a result of Louisiana’s generous tax incentives. This category also includes the production of biofuels such as the $150 million Dynamic Fuels facility in Geismar, Louisiana and a project being developed by Valero Energy in Norco, Louisiana that will nearly triple the nation’s biodiesel production capacity. Although this category does not currently represent a large amount of economic activity in the state, it is experiencing rapid growth resulting from a number of recent economic development projects and the commercialization of lower cost technologies and production processes. One recent economic development project alone, Blade Dynamics, will double primary green employment in this category.

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The Energy Efficiency category includes the construction of energy efficient structures and the installation of energy saving technology in existing residential and commercial buildings as well as at industrial facilities. The rebuilding efforts in New Orleans after Hurricane Katrina provided a unique opportunity to utilize new construction materials and building techniques that lower energy costs for homes and businesses. As a result, a surge in green building activity occured in the area. There have also been recent large investments in energy efficiency at manufacturing facilities. Near Monroe, Louisiana, Conagra built a large-scale sweet potato processing facility that has achieved LEED (Leadership in Energy and Design) Platinum certification from the U.S. Green Building Council. Additionally, companies continue to investment in energy efficiency improvements at refineries and chemical manufacturing facilities across the state.

The Greenhouse Gas Reduction category includes efforts to reduce greenhouse gas emissions through approaches other than the utilization of renewable energy and energy conservation. This category had the lowest level of primary green employment. The Greenhouse Gas Reduction category includes the development and adoption of emission reduction technologies such as in Lake Charles, Louisiana where Leucadia Energy is deploying carbon capture technology at a new chemical plant.

The Pollution Reduction and Cleanup category encompasses the development and adoption of technologies and practices aimed at minimizing or preventing adverse effects of pollution on the environment and human health. This category contains the second highest number of primary green jobs. While many of these jobs stem from the installation of cleaner technologies in Louisiana’s manufacturing plants or compliance with long-standing regulations, the category also includes a growth area driven by consumer demand for environmentally friendly products such as bio-based chemicals.

The Recycling and Waste Reduction category contains the largest level of primary green employment. Many of these jobs are found at waste management companies that have recycling programs as well as at recycling plants such as a facility operated by Louisiana Elastomer that recycles used tires in Vidalia, Louisiana.

The Sustainable Agriculture, Natural Resource Conservation, and Coastal Restoration category had the third largest number of primary green jobs. This category includes a broad spectrum of activities ranging from precision agriculture to the protection and management of the state’s fish and wildlife resources. It also includes the extensive ongoing efforts to protect and restore coastal marshes and wetlands.

Finally, the Education, Compliance, Public Awareness and Training category encompasses a variety of activities that support other areas of green activity. This category includes workforce development efforts at post-secondary institutions to prepare workers for employment in new and emerging fields. It also includes work conducted by environmental advocacy groups and government agencies to raise the public’s awareness of environmental issues and guarantee compliance with federal, state, and local environmental regulations.

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Table 3

Major Green Economic Development Projects

Project

Blade Dynamics

Point Bioenergy

Dynamic Fuels

Diamond Green Diesel (Valero)

Novolyte Technologies

Caddo Manufacturing

Myriant Technologies

Leucadia

Product

Wind Turbine Blades

Wood Pellets

Biofuel

Biofuel

Battery Technology

Electric Boats

Bio-based Chemicals

Carbon Capture

Location

Michoud

Port Allen

Geismar

Norco

Zachary

Vivian

Lake Providence

Lake Charles

Job Growth Opportunities

A number of recent economic development projects demonstrate the job growth opportunities presented by the greening economy. Table 3 below lists several recent projects in Louisiana. Many of these green economic development projects build on Louisiana’s existing strengths and highlight the state’s comparative advantage in attracting and growing businesses in emerging green industries. For instance, the state’s abundance of renewable natural resources combined with world-class transportation assets make Louisiana an ideal location for the processing of agricultural commodities into value-added products for export. Additionally, the state is already a leader in the energy sector. Many of the principal corporations in this sector are developing new products and productions processes with environmental benefits. Research and development efforts are also taking place at universities through specialized research centers that have an emphasis on clean technology research. As the economic viability of these new technologies are proven, Louisiana will remain an attractive destination for future investment because of our existing expertise and the large investments that have already been made by public and private entities within the state.

Having produced a baseline measure of current green employment, the body of knowledge developed during nearly two years of research was used to develop green employment projections. The employment projections incorporated data obtained on known economic development projects and overall labor market trends as well as input from the business community, subject matter experts and other key stakeholders. Building on the large amount of information gathered throughout the project, total green employment in Louisiana is projected to grow 13.8 percent during the 10 year period ending in the year 2020. This growth rate is compared to overall job growth of 8.1 percent for the entire Louisiana economy during the same time period.

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Several areas were identified as being important to future employment growth in Louisiana’s green economy. The production of advanced biofuels is one area that is likely to benefit Louisiana through continued large capital investments and future job growth. Other areas of clean-tech manufacturing are also expected to contribute to growth as new methods of energy productions and storage become commercially viable. Similarly, chemical manufacturers will likely realize opportunities through the production of specialized composites and polymers needed for new clean-tech products. Another area of growth will be the installation and maintenance of these new products and technologies such as with sustainable building and the maintenance of hybrid automobiles. Finally, the large and sustained investments in protecting and restoring Louisiana’s coast will create a rather unique growth area for the state’s green economy.

There are a many factors contributing to the relatively faster growth of green employment compared to overall employment. Although, each sector of the economy has a unique combination of economic factors and government policies affecting green activity, there are several macroeconomic factors that are driving growth across all sectors of the economy. One of these factors is the growing demand for limited traditional sources of energy and commodities as a result of global economic growth. Rapid growth in emerging economies around the world is placing upward pressure on the cost of energy. The long-term rise in commodity prices is driving technological advances that are changing the way energy and other products are produced. This sustained level of innovation is increasing the viability of new technologies. At the same time, evolving consumer preferences for a clean environment are being revealed through increasing demand for sustainable products.

Conclusion

The body of knowledge produced through this study provides clear evidence of a greening economy and the significant workforce implications associated with these trends. Survey results indicate that nearly half of primary green jobs require a uniqe set of skills compared to jobs not involved in green activities. Furthermore, survey results show that 6.3 percent of primary green jobs in Louisiana are currently vacant compared to only 1.1 percent of positions in the overall economy. This high vacancy rate associated with green employment is similar to record vacancy rates for the overall Louisiana economy in the aftermath of Hurricanes Katrina and Rita. These results suggest employers are facing challenges when attempting to fill open positions with qualified candidates.

In order for Lousiana businesses and workers to fully benefit from the greening of the economy, workforce development officials must continue to identify and address future workforce needs resulting from the greening of the economy. Post-secondary institutions will need to determine the best approach to quickly address skill deficits. Some cases will call for entirely new program offerings while others will only require modest revisions to existing curriculum. By continuing to solicit input from employers and industry groups, policymakers will guarantee that a highly trained and qualified workforce is an asset and not an impediment to growing Louisiana’s green economy.

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Notes

1 http://www.myriant.com/MyriantLP_Jindal.htm

2 http://www.dynamicfuelsllc.com/

3 http://www.lambweston.com/Delhi/the-Delhi-plant.jsp

4 http://www.netl.doe.gov/publications/factsheets/project/FE0002314.pdf

5 http://vidalia.op4web.com/custom/webpage.cfm?content=News&id=133&PT=news

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