Pro: Green jobs won’t do much to end recession
Everyone from the United Nations to the U.S. Council of Mayors is excited about “green jobs” initiatives. Both organizations recently called for billions in public spending, and the recently passed stimulus bill includes $62 billion in direct spending on green initiatives and $20 billion in green tax incentives.
And that’s only the down payment on billions more that the Obama administration intends to spend to promote jobs doing everything from weatherizing public buildings to building windmills to generating electricity. There are three major problems with these proposals.
First, the data and calculations underlying the rosy predictions are deeply flawed. Predictions that massive spending on green projects will create gobs of new jobs stem from “input-output analysis”—a technique that presumes stable prices and stable technology.
The “green jobs” proposals assume the opposite: energy prices will soar and rapid technological change in improving everything from biofuels to wind turbines will make these technologies economically viable very soon.
Estimates from an inappropriate technique cannot be trusted. As a prime example, take Vice President Joe Biden’s recent claim that there are 400,000 row houses in Philadelphia that need insulation.
With Philadelphia’s total population only 1.5 million with an average household size of 2.38, Biden’s claim turns out to be that almost two-thirds of Philadelphia’s population is living in poorly insulated row houses! A brief drive through Philadelphia would show even a casual observer that this is not the case.
Second, the “green” proposals fail to consider the jobs lost due to the massive changes they envision in the U.S. economy.
Changing regulatory and tax laws to force a shift from fossil fuels to solar and wind power will certainly create jobs installing and servicing solar panels and windmills, but it will reduce employment at coal mines, oil fields, refineries and fossil-fueled power plants.
Once those job losses are taken into account, these programs might not produce a net increase in employment. And if you read the reports carefully, it becomes clear that the increases in jobs in many cases will be more lawyers, government regulators and administrators.
For example, the American Solar Energy Society estimates that there will be larger increases in “green jobs” among secretaries, management analysts, bookkeepers and janitors than among environmental scientists.
And the Conference of Mayors lists New York City and Washington as the top locations for current “green jobs”—two cities where there are virtually no manufacturing jobs at all.
Finally, these proposals ignore the remarkable success story of conservation driven by market forces.
For instance, energy use in steel production fell 80 percent from 1950 to 2006; the energy intensity of aluminum production, one of the most energy-intensive manufacturing processes, dropped by over half from 1960 to 2000; and energy consumption in the production of ammonia fell to close to the theoretical minimum between 1900 and 2000.
Similar efficiency gains occurred in consumer goods such as refrigerators. All of these success stories—and there are dozens more—came about without government mandates as private individuals and companies sought to reduce their costs.
Never before in our history has the U.S. government undertaken to produce such a massive shift in employment by government mandate. These proposals to remake our society are built on assumptions about energy, the economy and the role of government that are often simply wrong as well as inconsistent with our experience and with American values.
We need to insist on a full, open debate about the data, the methods and the values in “green jobs” proposals before borrowing hundreds of billions of our children’s future money to fund these projects.
Andrew P. Morriss is the H. Ross & Helen Workman professor of law and business and professor at the Institute of Government and Public Affairs, University of Illinois at Urbana-Champaign. Readers may write him at UI College of Law, 504 East Pennsylvania Ave., Champaign, Ill. 61820.
Last updated: 9:55 am Thursday, December 13, 2012