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Con: Green job subsidies will destroy far more jobs than they create

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Ben Lieberman
October 3, 2009
EDITOR’S NOTE: The writer is addressing the question, Will green energy create millions of jobs in this country?

Don’t let the hype about “green jobs” fool you. The global warming bill approved earlier this year by the House of Representatives would destroy far more jobs than it could ever possibly create.


Proponents of the bill’s effort to reduce carbon emissions by imposing an enormously expensive cap-and-trade system are finding it a tough sell. The American people simply aren’t buying the idea that global warming is a dire crisis that justifies a blank-check response. Reality is just not cooperating with doom-and-gloom global warming predictions. No warming has occurred for the last decade. And now the recession has heightened concerns about the economy and jobs.


As a result, proponents of the Waxman-Markey bill—currently being debated in the Senate—have changed their sales pitch. Rather than present this big energy tax as a costly but necessary step to save the planet, supporters now claim that it would be an economic boon, a green-job-generating machine.


“Make no mistake: this is a jobs bill,” said President Obama as the bill neared a vote in the House last June. “It will make possible the creation of millions of new jobs.”


What kind of jobs is the president talking about? The Waxman-Markey bill drives up the cost of fossil fuels—coal, oil and natural gas—that proponents blame on global warming. As the feds ration these fuels and make them more expensive, they will be replaced by alternative energy sources such as wind and solar. The jobs necessary to bring about this energy transformation are considered green jobs.


Sure, the president can visit wind turbine factories and boast about the few hundred green jobs at each. But the billions of dollars in government subsidies to the wind industry siphon resources and jobs away from other parts of the economy.


Worse, the higher cost of wind-generated electricity and other alternatives kills even more jobs, especially in the manufacturing sector that needs reasonably priced energy to compete in the global marketplace.


A study by The Heritage Foundation estimates a loss of 1,145,000 jobs from the Waxman-Markey bill. These are net job losses, after any “new” green jobs are taken into account. The three analyses of the bill done by the federal government also predict net job losses.


Real world experience bears this out. Governments that subsidize or mandate green jobs reap fewer overall jobs and a weaker economy.


Green job advocates once touted Spain’s aggressive alternative energy policy as a model for America. But, today, Spain’s green-jobs bubble has burst.


Unemployment there stands at 18 percent, nearly twice that of the United States. Gabriel Calzada, economics professor at Madrid’s King Juan Carlos University, estimates that each green job Spain creates prevents 2.2 other jobs from being created.


The Danish think-tank CEPOS recently studied wind energy in Denmark, another oft-cited model for America. CEPOS found than each wind energy job there costs the government $90,000 to $140,000 annually—much more than the jobs pay. Nor are these jobs sustainable. Once the government handouts end, so do the jobs.


The same lesson can be seen in the United States. California has led the states in pursuing a green jobs agenda. Environmentalists often cite it as a model for the rest of the nation. But California also stands out as having higher unemployment and energy costs and a weaker economy than nearly every other state.


Waxman-Markey would take the nation down the same job-killing path. Some jobs would be destroyed entirely. Others would be outsourced to nations that don’t drink the cap-and-trade Kool-Aid.


China, India and other developing nations have wisely stated that they won’t accept similar global warming restrictions on their own economies, and for good reason. They know full well that the policies giving rise to green jobs kill many more jobs in the process.


Ben Lieberman is a senior policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Readers may write to the author in care of The Heritage Foundation, 214 Massachusetts Avenue NE, Washington, D.C. 20002; Web site: www.heritage.org.

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