Green economy growing slower in R.I. than nation

POSITIVE ENERGY: GreenSeal owner Paul Forsell in the North Kingstown barn the company calls home. The company offers retrofit services and energy audits. /
POSITIVE ENERGY: GreenSeal owner Paul Forsell in the North Kingstown barn the company calls home. The company offers retrofit services and energy audits. /

Paul Forsell started as a custom homebuilder. Nine years ago, he became a spray-foam insulator when customers started showing interest in energy-tight homes. Three years ago, he started offering retrofit services and energy audits.
Along the way, his company, GreenSeal Energy Solutions, became part of a green economy that is growing in the state, albeit at a slower pace than much of the country.
“I would think the industry is just going to continue getting stronger,” Forsell said. “It’s just the kind of culture we’re in right now. People want to make the smart choice.”
The Brookings Institution Metropolitan Policy Program last week released what it billed as a first-of-its-kind study sizing up the nation’s green economy. Rhode Island, with 9,563 green jobs, came in with a mixed bag.
Brookings said that Rhode Island green jobs grew at an annual average rate of 0.8 percent between 2003 and 2010, well below the national average of 3.4 percent. The jobs comprised 2 percent of all jobs in the state, exactly in line with the national figure.
In Rhode Island, the average green-collar worker earned $41,442 annually. Nationally, those workers earned an average of $43,773. And in Rhode Island, each worker produced $32,274 worth of exports in 2009, above the national average of $20,129.
Brookings, it should be noted, uses a broad definition of green-collar workers under jobs it defines as part of a so-called “clean economy.” The jobs include those in renewable energy, mass transit, waste management and regulation of energy. The study measured only direct jobs from its definition of the green economy and not spinoff economic activity.
Nationwide, Brookings said the “clean,” or green, economy employs 2.7 million workers, representing 2 percent of all American jobs. By way of comparison, the health care sector – the nation’s largest employer – counts 13.8 million workers, representing 10.2 percent of jobs.
Brookings said there is room for growth, especially in states that take steps to foster an atmosphere friendly to companies with an environmental bent. On the state level, the report calls for governments to strengthen renewable energy standards and adoption, and establish loan and financing programs.
Local governments can help by fast-tracking permits for green projects, adopting energy-efficient building standards and offering financial incentives. Many suggestions are similar to those laid out in a February 2010 Roadmap for Advancing the Green Economy in Rhode Island produced by the R.I. Economic Development Corporation. The report suggested boosting funding for four government-financing programs open to green- economy companies, fostering an atmosphere of innovation, improving energy efficiency at state buildings and making Quonset Point the hub of an offshore wind industry.
The state did boost the R.I. Industrial Recreation Bond Authority program to $60 million from $20 million. (The report suggested an $80 million cap). And the EDC is poised to put an additional $5 million in the Small Business Loan Fund to boost it to the recommended level of $18 million. The state is also asking for another $1.7 million for the fund from the federal stimulus.
Other programs suggested for increases have remained the same, including the surcharge on electric bills that flows to a Renewable Energy Fund. The state also level-funded the Slater Technology Fund at $2 million, although the EDC has asked for $9 million under the federal stimulus for the fund.
The state could do more, said Chris Benzak, managing partner at Newport Biodiesel. State law prohibits the biodiesel maker from applying for money from the Renewable Energy Fund. And while the state exempted the company’s fuel from the typical 32 cent per gallon tax, the state has shown less interest in providing government-backed financing, Benzak said
“The state needs to reach out to private-sector leaders like Newport Biodiesel and court us in a way that can create jobs,” he said. “We have these jobs ready to go.”
Newport Biodiesel is not the only one looking to make investments. Brookings said that worldwide investments by the private sector in the low-carbon energy market are expected to triple to $2.2 trillion by 2020.
Only time will tell how much of that investment will flow to the Ocean State, said Zaid Ashai, a general partner at Point Judith Capital in Providence.
Ashai, who focuses on green-technology investments, said the state’s small size could serve well as a laboratory for regulations that foster the sector. Its old building stock may provide opportunities for energy-efficiency companies like GreenSeal. And its expansive coastline and mature marine industry could become the foundation for an offshore wind industry. The state will play a key role in guiding the growth of the green economy, Ashai said. He urged officials to hone in on one or two segments that show the most promise.
“I don’t think we can do a little bit of everything,” he said. “If we do a little bit of everything we’re not going to do it well.”
Rhode Island, Ashai and Brookings said, must also reach beyond its borders. Brookings said it expects the fastest growth to occur in regional metropolitan areas, especially those that build clusters of companies in the green-economy sector.
Even tiny Rhode Island has opportunities if politicians are willing to work within the broader region, said Jonathan Rothwell, a senior research analyst at Brookings and a co-author of the report.
“The nice thing is while Rhode Island as a state is small, Providence is a fairly substantial-sized metro area so you can get the economies of scale,” he said.
The Providence metro area, which includes southeastern Massachusetts, already supports 12,904 “clean” jobs, according to Brookings. The sector grew 1.4 percent annually, placing the region 90th of the 100 regions detailed in the report.
But the 1.4 percent may not tell the whole story. The underlying data showed that a government agency in energy regulation shed 1,300 jobs. (Rothwell declined to name the agency, citing proprietary information used by Brookings.) Removing the agency from the calculations leads the average annual growth to jump to 3.1 percent, which is close to the national average of 3.4 percent.
Both Rhode Island and Massachusetts are seeking to grow those numbers. Cape Wind is moving forward with plans to build a 130-turbine wind farm in Nantucket Sound and use the Port of New Bedford as its base of operations.
In Rhode Island, Deepwater Wind wants to build two wind farms off the coast of Rhode Island and establish an assembly operation at Quonset Point. The Providence-based developer says the plant would employ 800 people and state economic officials tout the potential spinoff businesses.
Creating such clusters of development may work in the state’s favor. The report found that clustered establishments grew at a rate that was 1.4 percentage points faster each year than isolated establishments.
“In so far as [politicians] can collaborate across regions, and some regions are very good at this, it’s more likely they’ll be able to succeed,” Rothwell said. •

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