The Prospects for Expanding Clean Energy Investments and Job Opportunities under the "MI Healthy Climate Plan"

In 2022, the Michigan Department of Environment, Great Lakes and Energy (EGLE) published the MI Healthy Climate Plan. A centerpiece of the MI Healthy Climate Plan is its commitment for Michigan to achieve economy-wide carbon neutrality by 2050. Specifically, the plan establishes both an interim goal of reducing greenhouse gas (GHG) emissions in the state by 52 percent as of 2030 relative to a 2005 baseline and to reach carbon neutrality by 2050.

This study presents a framework for Michigan to achieve both its interim emissions reduction goal of 96 million tons by 2030 and to reach carbon neutrality by 2050. The project includes two basic features. The first is for Michigan to phase out consumption of oil, coal and natural gas as the state’s dominant energy sources. At present, the combustion of fossil fuels, along with bioenergy, accounts for nearly 90 percent of the state’s overall energy supply. The second is to replace this existing fossil fuel-dominant energy infrastructure with an alternative clean energy infrastructure.

The main results from our Michigan study include the following:

• Investments in Michigan in renewable energy, energy efficiency and battery storage will require investments at about 2 percent of Michigan’s GDP until 2050. For 2026, this level of investment would amount to about $15 billion.
• These clean energy investments will generate an average of between 85,000 – 100,000 jobs per year between 2026– 2050 within Michigan, equal to about 2 percent of Michigan’s current workforce. These will include jobs across all occupations in the state, including, for example, those for roofers, machinists, accountants, office managers and assistants, truck drivers, and wind turbine engineers.
• On average, these jobs pay about 6 percent more than the average for the current Michigan workforce overall, at about $39 an hour versus $37 an hour. At the same time, a disproportionate share of the clean energy jobs are available to people without higher educational credentials.
• White males hold a much larger share of these clean energy jobs than is the case for Michigan’s overall economy. Women now account for only about 27 percent of the clean energy jobs in Michigan, as opposed to holding 48 percent of jobs in Michigan’s overall economy. Still, as large-scale clean energy investments expand in Michigan, subsidized with public funding, this can create new leverage for workers and their union representatives to fight for gender and racial equity along with better wages and benefits.

Job losses for Michigan’s fossil fuel-based workers are unavoidable. At present, there are about 21,000 people in Michigan’s fossil fuel-based industries, amounting to 0.5 percent of the state’s current workforce. Virtually all of these jobs will be phased out between now and 2050. We assume, as a first approximation, that the phase-out proceeds in more or less steady increments between 2026 – 2050. We also take account of workers voluntarily retiring over the next 25 years. From these calculations, we estimate that about 350 fossil fuel industry based workers will face displacement every year. This compares with, as our lower-end estimate, about 85,000 jobs that will be created in Michigan until 2050 through clean energy investments in the state.

We develop a transitional support program for these displaced fossil fuel industry based workers. It includes pension, re-employment, and income guarantees, along with retraining and relocation support as needed. We estimate that a generous package of such transitional support measures would cost about $45 million per year. That is less than 0.01 percent of Michigan’s 2025 GDP.