Thursday, September 16th, 2010
I have always been skeptical of the idea of green industry. The bifurcation between green and non-green industry seems destined to be a temporary transitional state. In the future, probably less than a decade, there will only be industry, it will all be green, with only a few legacy exceptions winding down into the sunset.
This immediately begs the question, if America isn’t doing so well in non-green industrial development in an ever more competitive globalized world, why would we think that it will be any better for green industry? Why isn’t that going to move to China too?
Turns out, it is, as a recent story in the Washington Post illustrates.
The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison’s innovations in the 1870s.
The remaining 200 workers at the plant here will lose their jobs. “Now what’re we going to do?” said Toby Savolainen, 49, who like many others worked for decades at the factory, making bulbs now deemed wasteful….Jobs at the plant have been prized locally for years: They pay about $30 an hour.
Congress slipped a provision into bill that will shortly ban incandescent light bulbs in the US. The result is that all those factories are going to go out of business. But what about replacements like compact fluorescents? Those, as it turns out, are made in China:
“For those who make incandescent bulbs the law was bad for business,” [Ellis] Yan said. “For people like us, it was very good.”
Yan’s Chinese factories, which will employ around 5,000 at years end, make half of all CFL light bulbs sold in the US. He talks about opening a US plant, to produce bulbs at 40-50 cents higher than his Chinese ones. But if there’s one thing we know, it is that America is a price-dominant culture. Those bulbs aren’t going to sell even if he does make an investment here, which I very much doubt.
In a very real way here, the shift to green technology has actually accelerated the move of industry offshore. So many people like to talk about “green jobs” saving the economy. But the reverse is likely to be the case. The faster we force a shift to new green tech, the faster our manufacturing base will get shipped offshore. It can be difficult to make the case to shutter a fully depreciated factory with skills labor and fully understood operational and quality metrics in favor of a new offshore plant. But if you are starting from scratch in any case, China starts to look even more attractive. In this case, not only could a legacy plant not compete with China, it is legally not possible for them to do so after 2014 even if they wanted to because incandescent light bulbs will be banned.
This is not necessarily to disparage the shift to green tech. But sustainability advocates have to face up to the fact that there are real costs and tradeoffs to be made. Sometimes you can have it all, but much of the time you don’t get to have stricter environmental policies, lower costs and more jobs. There’s a real cost, financial, industrial, and human involved.
The real challenge of leadership is to figure out the right balance of competing needs, sell it to the public, and then make it happen. I wish our leaders luck in making that happen. But in the meantime, I’d suggest cooling the rhetoric that green industry is somehow going to save our economy from the mess we’re in, because in the short term at least it’s probably only going to dig the hole deeper.