The following commentary was written by Laura Sherman. Sherman is president of the Michigan Energy Innovation Business Council, a trade organization of more than 140 advanced energy companies focused on improving the policy landscape for the advanced energy industry in Michigan. See our commentary guidelines for more information.
Michigan’s recently finalized plan to reach carbon neutrality by 2050 is an ambitious strategy that would remake the state’s economy. Under the plan, transportation would become electrified, and our energy would increasingly come from renewable sources backed by storage, among other bold policies.
While it can be daunting, big change is often good. The shift envisioned by the plan will pay dividends to Michiganders from all walks of life by increasing job growth, boosting income and raising the state’s overall economic output.
The advanced energy sector is one of the fastest-growing parts of Michigan’s economy, as the members of the Michigan Energy Innovation Business Council (Michigan EIBC) have seen firsthand. Michigan EIBC represents approximately 140 companies that work in Michigan in renewable energy project development, advanced mobility, energy storage, energy efficiency, manufacturing of batteries and other components used in clean energy, and more.
The MI Healthy Climate Plan, as unveiled by Governor Whitmer, will build upon this progress. Not only will prioritizing clean energy and transportation lead to savings for consumers, but also, the state’s economy can leverage several elements of the plan to attract businesses and private investment.
Clean energy and transportation are a foundational part of the state’s economy. According to E2’s 2021 Clean Jobs America Report, Michigan’s clean energy employment share of the statewide workforce is higher than the national average and the state ranks 6th in the nation in total clean energy jobs. Michigan also has the second highest number of clean energy jobs when compared to other states in the Midwest. Michigan ranks second in the nation, behind only California, for the number of jobs in the “clean vehicle” sector, including electric, hybrid, and hydrogen fuel cell vehicles. Furthermore, despite an unstable economy for much of the pandemic, the clean energy sector grew at a higher rate than the state’s overall economy.
State and local governments have helped make these jobs possible through policy. One of these policies is the renewable portfolio standard (RPS), passed in 2008, that required that 10% of the state’s energy come from renewable sources by 2015. As of early 2022, the Michigan Public Service Commission’s study on the effects of the RPS found that it had led to a total of 2,828 megawatts of renewable energy deployment in Michigan and over $5.1 billion worth of investment.
The MI Healthy Climate Plan recommends taking the RPS to the next level, increasing it to 50% by 2030.
Another important existing policy is the economic development package (Public Acts 134, 136, and 137 of 2021) and funding for the Michigan Strategic Fund that have invigorated the electric vehicle market in Michigan. The bipartisan deal secured transformational investments from multiple global companies, including Michigan EIBC member company General Motors and LG Energy Solutions, who chose Michigan over other competing locations.
To support additional electric vehicle deployment in Michigan, the MI Healthy Climate Plan recommends deploying infrastructure to support 2 million electric vehicles on Michigan roads by 2030.
We need to implement the policies proposed by the plan so Michigan can fully realize the potential benefits of advanced energy. An October 2021 report published by Greenlinks Analytics analyzed the shifts in employment, income, and Michigan’s economic output related to investments in energy efficiency, solar, demand response, and other renewable energy technologies associated with state climate goals. Using an integrated modeling platform, the report found that investment in clean and renewable energy over the next several decades would lead to the creation of 96,000 jobs, a $2 billion increase in residential household income and an additional $3.9 billion to the state’s GDP.
The recommendations in the MI Healthy Climate Plan can help Michigan capture these economic benefits, but we should not forget that it is just a plan. Michigan lawmakers and officials will need to do the hard work of enacting the planks of the plan. Decarbonizing Michigan’s economy over the next 30 years will be a challenge, but the state’s history of growth and strength in the advanced energy industry shows it is a challenge worth undertaking.