The mirage of “green jobs”

posted at 2:54 pm on March 27, 2009 by Ed Morrissey

Barack Obama promised that his cap-and-trade energy policies would fund an explosion of “green jobs” as government pushes for mass-production-capable alternative energy sources.  Spain used to think the same thing, but Bloomberg reports that the explosion turned into an implosion (via Barcepundit):

Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide.

For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.

U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.

Spain wound up paying $775,000 for every green job they created through subsidies since 2000.  That’s almost $100,000 per year per job, and that cost only includes the created jobs.  The cost of the 2.2 jobs lost would hike that cost considerably, as well as the lost tax revenues, the increased government assistance, and the opportunity costs for pulling capital out of the markets.

Why did the jobs disappear?  In part because of the higher capital confiscation of the government, and in part because the green policies pushed industry out of Spain.  Actually, the study didn’t count jobs lost through “industrial relocation”, which in this case amounts to capital flight.  The largest stainless-steel producer in Spain directly linked its decision to move operations to South America to the higher energy costs imposed by the government.

In the US, we could see a massive flight, and not just in manufacturing.  High-tech industries that rely on cheap energy could be forced to find less expensive environments.  Bloomberg’s economist notes that Microsoft and Google have already relocated their servers once to get cheaper energy.  The Internet is flexible enough to allow employers to go almost anywhere in the world to host their servers, and in this economy, there will be plenty of competition for them.

Before we buy into the “green jobs” argument, we’d better make sure existing jobs don’t disappear into a wormhole at a faster rate.

Update: I forgot to hat-tip Barcepundit.  My apologies — I thought I had included his link originally.  Be sure to visit his site for his thoughts.


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C’mon Ed, you know you can’t have a communist revolution with a low unemployment rate.

Kafir on March 27, 2009 at 5:28 PM

Q: If wind subsidies are used for economic stimulus, what is the cost of each operating job created by wind farms?
A: Jobs created by wind subsidies cost $9.8 Million each.*

To say that wind subsidies are an economic stimulus because they create jobs is a stretch, at best.
When wind subsidies are justified on grounds of job creation, taxpayers should understand that the cost will be about $9.8 Million for every job created. As between coal, gas, solar and wind power, wind subsidies are by far the least efficient for job creation, the most capital-intensive and labor- extensive of them all.
In fact, as suggested by the data below, when wind replaces other sources of electricity, jobs are lost on balance, not gained.

Jobs created per $billion invested
In energy production: Coal v. Gas v. Solar v. Wind
(Direct, indirect, induced)

Supercritical pulverized coal w/o carbon capture: 806 Operating Jobs (Source: DOE Cost and Performance Baseline for Fossil Fuel Plants (May 2007)

Supercritical pulverized coal w/ carbon capture: 947 Jobs (Source: IBID)

Natural gas combined cycle w/o carbon capture: 387 Jobs (Source: IBID)Natural gas combined cycle w/carbon capture: 321 Jobs

Solar: 210 Jobs (Source JEDI 3)

Wind: 102 Jobs (Source: JEDI 3) [ = $9,803,922/job ]

*Source of job cost estimates: Employment from Power Generation Investment (Dec 2008 Energy Ventures Analysis Inc),Cost and Performance Baseline for Fossil Fuel Plants (May 2007, DOE/NETL-2007/1281) and the JEDI Model (DOE-NETL Website).

petefrt on March 27, 2009 at 5:32 PM

Dow 7,776.18 -148.38 (-1.87%)
NASDAQ 1,545.2 -41.80 (-2.63%)
S&P 815.94 -16.92 (-2.03%)

speaking of mirages….

sven10077 on March 27, 2009 at 5:47 PM

I wrote about this last night… glad to someone else writing about it too. Because it’s all fairy tale.

http://www.beatcanvas.com/content_view.asp?blogid=1&areaid=1&id=1463

beatcanvas on March 27, 2009 at 5:49 PM

Obama promised to create jobs. He never promised that he wouldn’t destroy jobs in the process.

29Victor on March 27, 2009 at 7:03 PM

FDR destroyed thousands of jobs and millions in capital with his public energy programs.

The government used bribery, the law, the courts, relentless prosecution of utility’s owners and massive subsidies to give themselves unbelievably unfair advantages and utterly destroy the competition.

With cap and trade, government subsidies and new environmental regulations, Obama is setting up Round 2.

29Victor on March 27, 2009 at 7:18 PM

Barry should have been required to demonstrate he could run a Boys Scout Troop before being handed the reigns.

This guy has done nothing in his life, not created anything, run anything or contributed to anything of any significance. As a result, he knows no limitations and is detached from reality. As a consequence, we are being yoked to the whims of his imagination and whatever concoctions he dreams up.

He might as well say he’s going to create a perpetual motion machine that will solve all of our energy needs.

moxie_neanderthal on March 27, 2009 at 8:24 PM

moxie_neanderthal on March 27, 2009 at 8:24 PM

Pretty accurate summation of The One, moxie. This is painful to experience.

eaglesdontflock on March 27, 2009 at 8:38 PM

As far as California goes (since I spoke to my democrat assemblyman) green jobs are putting insulation in houses and installing solar panels. In other words they are CONSTRUCTION jobs..union jobs that do not export a damn thing ans are temporary at government funding.

To a mentally challenged liberal these jobs can’t be outsourced just ended.

jukin on March 27, 2009 at 8:58 PM

I worked for a large company in a small town in Northern CA.
For three years the power company threatened surcharges for on-peak power usage in the summer months; they never did anything. Businesses can always move; at least that town took the hint. A bad economy can force changes for both good and bad.

mad scientist on March 27, 2009 at 8:59 PM

As far as California goes (since I spoke to my democrat assemblyman) green jobs are putting insulation in houses and installing solar panels. In other words they are CONSTRUCTION jobs..union jobs that do not export a damn thing ans are temporary at government funding.

To a mentally challenged liberal these jobs can’t be outsourced just ended.

jukin on March 27, 2009 at 8:58 PM

Solar panels are not cost-effective; the payoff exceeds the life of the panel.
I would look at a solar water heater however. That panel merely circulates water through a panel on the roof.

mad scientist on March 27, 2009 at 9:02 PM

I worked for a large company in a small town in Northern CA.
For three years the power company threatened surcharges for on-peak power usage in the summer months; they never did anything. Businesses can always move; at least that town took the hint. A bad economy can force changes for both good and bad.

mad scientist on March 27, 2009 at 8:59 PM

I can’t see reconnecting cost with consumption as anything but good. I just found out recently how screwed up Baltimore’s electric utility is. They gave a great big payoff to all customers to shut them up about raising their rates (about double California’s)–and those payouts should have run out last month for the poorest rate payers.

Count to 10 on March 27, 2009 at 9:20 PM

So problems were caused by activist plans based on the biggest joke of a lie in generations? I just never would have thought.

Grafted on March 27, 2009 at 10:00 PM

Don Quixote was right; those windmills are giants of economic destruction.

Dhuka on March 27, 2009 at 10:16 PM

Kill the liberals and manufacture the bodies into soy lent green to feed other liberals. Green jobs that pay dividends, what more can anyone ask for?

larvcom on March 27, 2009 at 11:30 PM

Obama creates a gubment job, 1 private sector job is lost and 1 job moves to India. Obama is using a wrecking ball.

seven on March 28, 2009 at 6:19 AM

Ever since arnold pushed green jobs the Cali unemployment has gone from 7.5%-10.3%.

jukin on March 28, 2009 at 3:19 PM

I still haven’t figured out why people think Obama is intelligent. It seems that the requirements for all political offices have reached an all time low. The people running our government are an embarassment.

kaye on March 29, 2009 at 3:48 AM

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