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Amid a recent flurry of insightful reports on why and how California should embark on an equitable and managed transition off gas, Inclusive Economics and the UCLA Luskin Center for Innovation have filled a critical research gap.
Their first-of-its-kind study,California Building Decarbonization: Workforce Needs and Recommendations, examines and begins to answer questions posed by many, including:
- What are the employment impacts across the California economy of transitioning to all-electric buildings by 2045? Where will there be jobs gains and losses?
- What are the recommended policies and approaches to mitigate impacts on fossil fuel workers?
- What types of investment in building electrification will support the growth of union jobs?
Electrification is widely regarded as the most effective way to cut climate pollution from homes and buildings, which are responsible for more than a quarter of the California’s greenhouse gas emissions. City after city, and utility after utility, are making commitments to help residents replace gas with clean energy in their homes. However, as the new jobs study points out, residents and businesses will only be able to access the benefits of all-electric homes, schools, and workplaces with a skilled and trained workforce.
Electrifying over 14 million homes and 8 billion square feet of commercial buildings in California will require investing in California’s skilled construction workforce.
What will this energy transformation mean for California’s workers? Here is a summary of some of the main findings of the report.
1. Employment Impacts on California’s Workforce
The analysis reveals that electrifying 100% of California’s existing and new buildings by 2045 would create over 100,000 full-time equivalent jobs, even after accounting for losses in the fossil fuel industry.
New demand for skilled workers is expected in several sectors of the economy, including construction jobs for energy-efficiency improvements, building upgrades and modifications, and installing equipment. In addition, there may be new jobs in the manufacturing of new electric equipment and appliances. New work will also be required for new renewable energy and grid infrastructure to ensure that the electricity system can support new demand loads driven by building electrification. California will also see new utility jobs to support increased electricity sales.
On the flip side, reduced gas use in buildings will mean a drop in the need for plumbers and pipefitters to extend gas lines and connections to homes and buildings, as well as fewer gas utility workers to provide gas service to customers.
It is essential to note that even without a concerted effort to electrify California’s buildings, California is already seeing declining gas use. A recent California Energy Commission report predicts declining gas consumption out to 2050, largely based on current policies like SB 350, a warming climate, the growing public interest in clean energy homes, and escalating gas rates. And, to achieve California’s 2045 carbon neutrality goals, fuel-switching from gas to all-electric buildings will be essential.
However, with early planning and strategic investment, California can grow good jobs and minimize worker displacement. The study estimates the following employment shifts by 2045:
The report also looks at the quality of jobs that would be created through increased building electrification in California. Three out of every five of the jobs created would be in "high-road" sectors -- where firms compete on the basis of skill, experience, and qualifications, and where worker pay tends to be higher. There are also recommended policies (discussed below) that can support employment of a unionized workforce for building electrification, even for residential buildings which tend to be serviced by lower paid nonunion workers.
2. How to Protect and Prioritize Fossil Fuel Workers
The study finds that planning is critical to protect workers. It's estimated that 55% of gas workers will reach retirement age over the next 25 years. With good planning now, we can make sure that gas workers are shielded from unexpected layoffs even as building energy consumption shifts, and that the industry is able to retain its trained workforce to continue providing safe and reliable service as gas sales decline.
Engaging with labor early on can lead to innovative policy solutions to grow jobs while mitigating and adapting to the climate crisis. For example, new building code measures could require additional piping for water recycling and water reuse for residential, commercial, and public buildings. This would bring new work to plumbers and pipefitters, and can provide much needed water conservation for drought-prone California. California’s massive system of water pipes is also in need of repair, providing another avenue for job growth for plumbers and pipefitters. Another avenue for job creation for pipefitters and other skilled trades is renewable-powered district energy systems, also called thermal microgrids, where hot water moving through a network of underground pipes is used to heat and cool buildings, a practice common in Europe.
The study also finds that job loss can be minimized by the long-term nature of the transition from gas to clean energy. As noted, over 55% of the workers in the gas industry will reach retirement age by 2045, and retention and relocation bonuses could be used to ensure that current workers can stay employed even as the system contracts.
3. How to Grow Union Jobs in California
California policymakers should expand high-road employment opportunities that offer family-sustaining wages, benefits, and job security for workers. Climate and energy agencies, utilities, and local governments play a large role in influencing job quality and engaging a highly skilled workforce. They set the bar for the level of skill and training required of workers, especially in emerging areas like building electrification.
Demand for skilled workers is highest in the work required to electrify existing buildings. There are several ways that policymakers can ensure that new jobs to electrify existing buildings are unionized and/or high-road jobs.
For example, for the residential sector, which is typically serviced by a nonunionized and lower-paid workforce, policymakers can support the employment of skilled and trained workers by:
- Aggregating residential electrification into community-scale projects and establishing project labor agreements or community workforce agreements to improve job quality and provide training opportunities for workers facing barriers to employment.
- Conditioning incentives on skill standards or offer incentives (e.g. accelerated permitting) for projects that meet certain workforce criteria.
- Supporting the upskilling of workers through stackable credentials, particularly through electrification training targeted to electricians, sheet metal and HVAC workers, and plumbers and pipefitters. Programs like California Advanced Lighting Control Program, a training for electricians for advanced lighting controls, or Electric Vehicle Infrastructure Training Program for electric vehicle infrastructure, are good examples of stackable credentials in the clean energy industry. Developing something similar for building decarbonization could be very effective.
- Structuring the work to create opportunities for disadvantaged workers. Support high-road construction careers (HRCCs) for construction and develop high-road training partnerships (HRTPs) for manufacturing and other skills needed for building decarbonization. California’s HRCCs and HRTPs work to improve job access for disadvantaged workers and support their career development. When community-based training organizations have formal agreements with employers, agencies, and apprenticeship programs, better job training and placement outcomes are achieved. Forging stronger partnerships between different facets of the workforce development and support system is key to improving outcomes for disadvantaged workers.
Policymakers can also prioritize electrifying large commercial, municipal, schools, and hospitals which often employ workers with apprenticeship training. District energy decarbonization and expansion also presents an important opportunity for high-road job growth. Building and maintaining these systems require many of the same skills as are needed to build and maintain gas pipelines. District energy or thermal microgrid expansion could even provide gas utilities with new business opportunities, based on selling heating and cooling services rather than fuel.
Climate Solutions Require a Skilled and Trained Workforce
California is on a trajectory to decarbonize buildings, but the timeline and process to transition off gas remain uncertain. Amidst that uncertainty, one thing is clear: Our work to decarbonize buildings will be more effective and stronger if unions are at the table shaping the strategy, sharing their insights, and (most important of all) doing the work on the ground to carry out the transition. The quality of the work will be higher, customer satisfaction will be greater, and the transition will be more orderly and thoughtful.
A skilled and trained workforce is an essential component to decarbonization. As such, the transition from gas to clean energy must be built upon inclusive policies that strengthen and solidify the role of unions in California. Building-electrification policies should be paired with just-transition and labor policies that support a skilled and trained workforce.
The report is also an important reminder that advocates need to lead with humility. While there are policies to support a just transition, none of this is easy or without nuance. The climate crisis demands urgent action. Urgent action also upends the workforce and affects individuals. Change won’t be linear or tidy, but we can demand a transition that prioritizes inclusive workforce policies that help create the next generation of good careers and ease the transition from one industry to the next. This report is a helpful contribution to this critical work and a useful starting place for policymakers, advocates, and the public to engage with labor to find just climate solutions.
You can access the report here.
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