The Clean Energy & Economic Development Nexus

This is a guest blog post by the Minnesota Department of Employment and Economic Development (DEED). For comments or questions, please e-mail Weston Merrick, Economic Analyst at DEED.

In the past few months, the EPA’s proposed rules change and the U.N. Climate Change summit have brought renewed focus to the nation’s energy mix. These conversations generally center on the high economic cost of abandoning fossil fuels, but what goes unsaid is the massive energy void clean sources will likely fill.

Clean Energy offers states abundant, reliable, and increasingly cost effective sources of energy. For states without fossil fuels, it allows them to replace energy imports with local production. Moreover, this local production tends to create stable, high-paying jobs. Some states and regions have begun to grasp this latent opportunity and are working to identify and cultivate clean energy employment and industry clusters.

Over the last year, the state of Minnesota and a national expert, Collaborative Economics, undertook an intensive review of what constitutes clean energy and the history of Minnesota’s policies, employment, and wages in the industry. This analysis, released on October 2nd in Minnesota’s Clean Energy Economy Profile, found robust employment growth, wages that far exceeded state averages and potential regional clusters that may offer the state a sustainable competitive advantage.

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Through a combination of previous research, stakeholder engagement, administrative datasets, and direct surveys, the research found:

  • The clean energy market is developing rapidly, reducing the Minnesota’s dependence on imported energy. State biofuel production capacity, energy efficiency savings, and solar and wind installations all had triple-digit percentage growth between 2000 and 2012.
  • State employment in clean energy sectors reached 15,300 in 2014. Clean Energy employment surged 78 percent between January 2000 and the first quarter of 2014, growing steadily through the recession. By comparison, the state’s total employment grew 11 percent over the last 15 years.
  • Workers in clean energy earn high average wages compared with the state average. Average annual wages in the clean energy economy in Minnesota were over $71,000 in 2013, which was 42 percent higher than the statewide average for all jobs (about $51,000). Overall, Minnesota workers in the clean energy economy earned over $1 billion in wages in 2013.

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This report serves as a baseline and analytical foundation for a broader National Governors Association (NGA) Policy Academy process to align Minnesota’s strategies in energy and economic development. Through the process, the team worked to better understand the composition of the industry, galvanize industry support and identify opportunities for the state to compete in the $1.13 trillion global clean energy market.

Generous assistance from the McKnight Foundation, Energy Foundation and National Governors Association made this research possible. For the full report and more information about the NGA broader project, click here.