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In today’s edition, we look at demand for renewables, EV batteries, and other clean energy tech is s͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
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June 16, 2023
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Net Zero

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Tim McDonnell
Tim McDonnell

Hi everyone, welcome back to Net Zero.

Here’s a stat that took me by surprise in my reporting this week: 0.08%. That’s the percentage of mining engineering university students graduating in the U.S. this year, relative to the anticipated number of mining jobs that will open up in the country by 2030. In other words, mining has a major workforce shortage, which could severely hamper the domestic production of critical minerals of the energy transition. It’s not just mining: Renewable energy companies and battery factories are also in a war for talent. Today we look at some solutions to the problem.

Also, how to better account for the economic damages of wildfires in climate models, and researchers raise red flags about how the World Bank doles out climate finance.

Warmups

U.S. President Joe Biden is still the preferred 2024 candidate of the country’s top environmental groups, despite their criticism of recent decisions by his administration to approve large fossil-fuel projects in Alaska and West Virginia. The Sierra Club, Natural Resources Defense Council, and others endorsed Biden’s reelection on Wednesday.

Saudi Arabia’s gambit over the past several months to curb oil production and thereby boost prices hasn’t paid off. Oil prices are still the lowest they’ve been since early 2022, thanks to contracting economic activity and lower demand worldwide. Share prices of oil and gas companies, which outperformed the S&P 500 in the first half of this year, are now underperforming it.

Meanwhile, the state-owned oil company Saudi Aramco was the top buyer at the biggest-ever auction of carbon offset credits, held this week in Nairobi. Aramco and other Saudi and international companies snapped up 2.2 million metric tons worth of offsets, most of which originated from renewable energy, clean cookstoves, and conservation projects in Africa.

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Evidence

Annual installations of large batteries globally are projected to grow tenfold in less than a decade, according to a new forecast from the business intelligence firm Rystad Energy. The majority will be installed in China, an essential prerequisite for the electric grid to carry large volumes of renewable energy.

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Tim McDonnell

The energy transition has a labor problem

Eastleigh Borough/Creative Commons

THE FACTS

Demand and government funding for renewables, electric-vehicle batteries, and other clean energy technologies are surging. But companies driving the energy transition are running into a new impediment to scaling up: Finding enough workers.

With U.S. unemployment near its lowest level in 70 years, the country’s labor pool is already stretched thin. But the climate workforce is especially tight. An analysis of LinkedIn job-posting data this week found that positions labeled “green” are the fastest-growing hiring category, and that demand for those openings is exceeding the supply of candidates with relevant skills by a widening margin.

The Inflation Reduction Act is projected to create an additional 1.5 million wind and solar jobs by 2035, meaning the size of those workforces needs to roughly triple in the next decade. Hiring is already a major challenge for 89% of U.S. solar companies, a survey last year found. Battery factories and mineral mines are also struggling to hire sufficient skilled workers.

“The labor market is extremely competitive,” Jon Evans, CEO of the mining company Lithium Americas, told Semafor.

TIM’S VIEW

The workforce shortage is especially dire in the mining sector, as the U.S. scrambles to shore up supplies of lithium and other minerals for batteries and renewables hardware. Easing the bottleneck starts in college with training workers, so there’s no quick fix, and no time to waste in readying the next generation of mineral engineers.

By 2030, half of the current U.S. mining workforce — about 221,000 workers — is expected to retire and will need to be replaced, not to mention the workers needed for new lithium mines in Nevada and elsewhere. Yet the country’s 14 university-level mining engineering programs saw their combined body of graduates drop by half in the last five years, to a paltry 172 graduates this year, said Steve Enders, a professor of mining engineering at the Colorado School of Mines.

“There’s clearly a war for talent at all levels,” he said.

The problem, he said, is that most incoming college students associate “mining” with coal and see it more as a contribution to climate change than part of the solution to it. Young engineering students also see mining as low-tech compared to computer science and other engineering fields when in fact, Enders said, the mining jobs that are most in demand are increasingly high-tech and focused on automation and machine learning.

A talent war is good for the few graduates that are looking for mining careers: Enders said most have at least four job offers by their final semester and a starting salary above $75,000. But that competition is also a factor driving up the prices of lithium, copper, and other minerals.

ROOM FOR DISAGREEMENT

In some cases, the deficit of workers may be the result of inadequate compensation, rather than a shortage of hands. In spite of the IRA’s preferential tax benefits for companies that adhere to high labor standards, many clean energy project developers are still reluctant to use unionized electricians and other construction workers, and will need to offer more competitive compensation to staff up, said Jason Shedlock, president of the Maine State Building and Construction Trades Council, a group of unions: “Developers will still try to get as much as they can for as little as they can. But they’re finding that workers across the country aren’t buying it anymore. They can’t find workers for the wages they’re willing to offer.”

To read the view from China and the rest of this story, click here.

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One Good Text

Steve Davis, professor of Earth system science at the University of California, Irvine.

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Semafor Stat

Number of national climate strategies that include any commitment to phase down fossil fuel production, out of 143 that have been submitted under the Paris Agreement, according to a study this week.

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Watchdogs
Reuters/David Lawder

Hundreds of developed projects financed by the World Bank with the stated aim of addressing climate change actually contribute little or nothing to solving the problem, according to a study published Thursday by the Center for Global Development, a think tank.

Between 2000 and 2022, the World Bank financed 2,554 climate-related projects worth a combined $119 billion. Many have a clear link to either reducing carbon emissions or adapting to climate impacts: Cyclone recovery in Bangladesh, solar power in Vietnam, mass public transit in the Philippines.

But 829 of the projects list their contribution to climate as less than 20% of their value and provide no details on any link to mitigation or adaptation: Digital payment processing in Afghanistan, rural primary education in Cameroon, and COVID-19 response in Yemen are some examples. Across the board, in nearly all cases where a project claimed to reduce emissions, no specific estimate of cuts was provided.

The findings suggest that the World Bank’s climate finance portfolio is much smaller than it appears, and that there is little oversight or accountability for the actual climate benefit of the portfolio. Fixing this situation is a stated priority of new World Bank President Ajay Banga, who will have a chance to offer some concrete solutions when he attends a global summit on climate finance in Paris next week.

For starters, projects that claim to tick the “climate” box should be much more specific, especially on quantifying emissions reductions, Vijaya Ramachandran, a co-author of the study, told Semafor: “I don’t think this would affect how much money will flow to these efforts, and will make it more impactful.”

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