Notes on Methodology
Lack of data for emerging "green economy" sector
Getting a clear picture of the emerging "green economy" sector is challenging. Unlike for well-established sectors, the U.S. Census of Manufacturers and other government databases do not collect data on the number of green firms, location and employment numbers.
As a result, little data exists on the vast opportunities for economic growth and employment in the supply chains associated with renewables, energy efficiency, and other low carbon products and technologies.
For clearer picture, EDF identified firms for business survey
To address this gap and help illustrate the range of firms that will grow as a result of the transition to a low-carbon economy, Environmental Defense Fund initiated a project to identify firms in a dozen states (primarily in the manufacturing heartland) that manufacture, install or — in a handful of firms — design a variety of climate solutions.
Most of these firms are already selling their products for energy efficiency, renewables or other low carbon applications. Some of the firms are not yet supplying products for low carbon technologies but will likely see new customers as a cap on greenhouse gases increases demand for climate solutions.
Market research firm Frost & Sullivan conducts survey
We commissioned the market research firm Frost & Sullivan to carry out a business survey of 1,200 companies to better understand their company sales and other business activities as of December 2008.
The survey received 500 respondents. According to our survey, approximately 60 percent of the firms are manufacturers, 30 percent are installers or contractors, and the remainder fall into design, consulting, wholesale sales and other related businesses. Of all respondents, more than 60 percent are small businesses with less than 50 employees, while almost 10 percent are large firms with more than 500 employees.
Our map database includes firms that manufacture a product, such as bolts or paint for wind turbines, for the clean energy economy even if their products are also sold to customers in other sectors. The rationale is that such firms would gain new customers as a result of a cap on greenhouse gases. Employee numbers are given for the companies that provided that information.
Process for identifying firms in the value chain
Manufacturing Climate Solutions, a report published by Duke University's Center on Globalization, Governance & Competitiveness, and sponsored by EDF and four labor unions, served as the basis for the survey.This study maps the value chains of five different green job sectors that contribute to climate solutions. Some firms identified by the value chain studies are already selling products to customers for low-carbon solutions. Others have the potential for major growth if a national cap on greenhouse gases is enacted.
Many component manufacturers have already discovered new customers. One example is Cardinal Fastener & Specialty Company, a firm in Bedford Heights, Ohio, which makes bolts and employs 65 people. It expects to increase its workforce in the next two years despite the worst national and global economic conditions in decades. "We expect to double our sales in the next two years," said Dan Alvarez, product manager for Cardinal Fasteners. "That's not going to come from our usual commercial sales for power generation, construction and heavy industry. Those guys aren't growing. The biggest part of our growth is going to come from wind."
Demonstrating the potential for growth with a national cap is, Berg Steel Pipe in Orlando, Florida, a leader in the manufacturing of the large diameter steel piping essential for waste heat recovery — an energy efficiency solution for many industrial sectors. Although the firm is not yet selling the piping for waste heat recovery, it is included on the Florida map because of its large potential for sales if a cap on greenhouse gases is enacted.
Environmental Defense Fund expect to increase the number of companies on the map as more firms are identified.
How we identified other firms
To identify other relevant firms, we also searched online databases, primary research data and industry association websites. The key sources we used for finding renewable energy and energy efficiency companies in target states include:
- Sourceguides.com – a database for all types of green companies (retailers, manufacturers, installers etc.) throughout the U.S.
- Energy Star partner database -- manufacturers of energy efficient products by state.
- News stories and energy information on states' Department of Economic Development websites.
- News updates and other information from trade associations and other industry websites: American Wind Energy Association | Solar Energy Industries Association | Solarbuzz
- EPA AgStar biogas industry members.
Finally, EDF's team of experts, including Jackie Roberts, our Director of Sustainable Technologies, identified relevant firms through conferences and other daily interaction with investors, media, businesses and other researchers.
Posted: 17-Feb-2009; Updated: 17-Feb-2009
