In Barack Obama’s America, there are no costs and benefits. There are only “false choices” that must be avoided lest we fall into the dangerous trap of old thinking. We can increase deficit spending and improve budgetary discipline, expand health care funding and reduce costs, and pay for social programs unimagined by LBJ with the tax rates of Bill Clinton.
Such characteristically hopeful thoughts were on display this week during the president’s Earth Day remarks. Speaking at a wind turbine tower plant that was once the site of a Maytag factory, Obama declared, “The choice we face is not between saving our environment and saving our economy — it’s a choice between prosperity and decline.”
The answer, my friends, is blowin’ in the wind. The president said that wind power could provide a fifth of the nation’s electricity by 2030, with the added benefit of providing 250,000 jobs. And that’s not all: All told, Obama touted up to 5 million “green jobs” that will make environmental protection pay for American workers.
Green jobs are said to eliminate one of those false choices the president is always warning against: a debate that pits environmentalists, with their regulations and government programs, against workers and taxpayers. Public investments in renewable energy sources are supposed to create new high-wage jobs for Americans that can never be shipped overseas.
Unfortunately, the laws of economics cannot simply be repealed and benefits still do come at a cost. A study (pdf) by Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, found that for every green job created with taxpayer money in Spain over the last eight years, 2.2 other jobs were destroyed. Worse, only a tenth of the new green jobs ended up being permanent.
Obama has included Spain in his list of countries that are “surging ahead of us, poised to take the lead in these new industries.” The Calzada study also holds up Spain as a prime example of the green jobs approach — “No other country has given such broad support to the construction and production of electricity through renewable sources” — but comes to a very different conclusion: that the large numbers of green jobs that were projected in Spain and are now being promised in the United States will not materialize.
But what about the competing studies that predict radically different results? One such report claims that $100 billion for green stimulus would produce 2 million jobs in the next two years. Another says that the green jobs are already booming.
In March, researchers from four different American universities released a report entitled “The Seven Myths of Green Jobs” examining the methodology behind green jobs-boosting studies. What they found was that this research frequently failed to apply a consistent definition of what constitutes a green job, tended to count aggregate numbers of people collecting a paycheck rather than net job growth figures, and often used shaky economic models that relied on dubious assumptions.
Andrew Morris, a study co-author and professor of law and business at the University of Illinois, told TAS that the rush to fund green jobs had something in common with the financial crisis. “We saw people making a large leverage bet with other people’s money without a lot of due diligence,” Morris says. “Once again we are borrowing money with not enough attention being paid to underlying strategy.” And in some cases, with a definition of a green job that “isn’t coherent.”
Morris complains that the case for green-jobs optimism is too often built on “predictions made on very small base numbers” with “estimates derived from other statistics by interest groups.” “What we really need,” Morris says, “are net job calculations.” He cautions that these studies tend to assume “very large multiplier effects” when “all the experience we have suggests that these multiplier effects are exaggerated or overstated.”
These concerns have been echoed by some members of Congress. In a Thursday afternoon conference call about the coming cap-and-trade bill, Rep. Steve Scalise (R-Louisiana) recalled that Environmental Protection Agency Administrator Lisa Jackson was eager to talk about the jobs the Obama administration’s emissions-reduction plans would create until asked to clarify how she arrived at her figures.
“Can you quantify how you will create these jobs?” Scalise said he inquired. “She said she’s not a jobs expert and can’t quantify the jobs. When you ask them to back it up, they can’t give you anything that will back it up.”
Renewable energy sources may be the wave of the future, but green jobs cannot turn a cap-and-trade plan into a cost-free panacea. No less an authority than public television teaches that it’s not easy being green. Some things hope can’t change.