Thursday, February 17, 2011
In his State of the Union speech last month, President Barack Obama planned to “win the future” by, among many other things, having the federal government invest in “clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.” But will investing in clean energy actually produce countless new jobs?
The California think tank Next 10 recently asserted in its 2011 report “Many Shades of Green” that employment in the state’s green core economy grew at 3 percent between 2008 and 2009. Employment in the rest of the economy, meanwhile, grew at just 1 percent. The report defines the “green core economy” as businesses that generate clean energy, conserve energy, or reduce and recycle wastes.
Specifically, Next 10 finds that the number of jobs in California’s green core economy rose between 2008 and 2009 from 169,000 to 174,000 – an additional 5,000 jobs. Green jobs account for just 0.9 percent of California’s overall 18.8 million jobs. Note that the state’s unemployment rate is 12.5 percent, which means that 2,270,000 Californians are without work.
Many of the green core economy jobs created in California are the result of policies that restrict the production and use of conventional sources of energy. Electricity generators in California were required to produce 20 percent of their supplies using renewable sources by 2010, a requirement that will rise to 33 percent by 2020. In addition, California’s Global Warming Solutions Act will impose steep reductions in carbon dioxide emissions produced by burning fossil fuels. Other green jobs are the result of regulations requiring energy conservation in residential and commercial construction.
A new report by University of Texas economist Gurcan Gulen takes apart many studies predicting that policies mandating alternative energy production, energy efficiency and conservation will create a boom in employment.
MANY GREEN JOB STUDIES HAVE NO ANALYSES OF JOB LOSSES.
First, Gulen notes that many such studies fail to define clearly what they mean by green jobs. He points out that many pro-green jobs studies do not distinguish temporary construction jobs from more permanent operation jobs. Many studies assume that green jobs pay more than jobs in conventional energy. But why would a construction job at a wind farm pay more than one at a conventional power plant?
Even more disturbingly, many green job studies have no analyses of job losses. Clean energy costs more than conventional energy, which means consumers and businesses reduce their consumption of other goods and services, resulting in job losses.
This strategy is reminiscent of the story of the American economist visiting Mao’s China taken on a tour of a construction site where 100 workers were using shovels to build an earthen dam. “Why don’t you just use one man and a bulldozer to build the dam?” asked the economist. The guide responded, “If we did that, then we’d have 99 men out of work.” To which the economist replied, “If your goal is to make jobs, why don’t you take their shovels away and replace them with spoons?”
Gulen is not alone in his concerns. A report by Hillard Huntington, executive director of the Energy Modeling Forum at Stanford University, calculated a million dollars invested in solar power produces three to five jobs (compared to the 10 generally created for such an investment); wind 1.6 to 6.5 jobs; biomass 1.8 to 6.5 jobs; coal 3.7 jobs; and natural gas, two.
Another way of looking at it is that investing in these areas destroys jobs. All subsidies to the electric power sector divert money that would otherwise be invested in greater job-creating activities.
RONALD BAILEY is science correspondent at Reason Magazine.