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Jewish World Review
May 27, 2009
/ 4 Sivan 5769
Economic Reality of 5 Million Green Jobs
By
Tony Blankley
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http://www.JewishWorldReview.com |
In 1845, the French economist Frederic Bastiat published a
satirical petition from the "Manufacturers of Candles" to the French Chamber
of Deputies, which ridiculed the arguments made on behalf of inefficient
industries to protect them from more efficient producers:
"We are suffering from the ruinous competition of a rival who
apparently works under conditions so far superior to our own for the
production of light that he is flooding the domestic market with it at an
incredibly low price; for the moment he appears, our sales cease, all the
consumers turn to him, and a branch of French industry whose ramifications
are innumerable is all at once reduced to complete stagnation. This rival,
which is none other than the sun, is waging war on us. .?We ask you to be so
good as to pass a law requiring the closing of all windows, dormers,
skylights, inside and outside shutters, curtains, casements, bull's-eyes,
deadlights, and blinds in short, all openings, holes, chinks, and
fissures through which the light of the sun is wont to enter houses, to the
detriment of the fair industries with which, we are proud to say, we have
endowed the country."
This famous put-down highlights the problem of claiming that
protecting inefficient producers creates good jobs. Obviously, the money the
French would have wasted on unneeded candles could have been spent on needed
products and services to the increased prosperity of the French economy.
I mention this in the context of the Obama administration's
assertion that by subsidizing alternative energy sources, it will create 5
million green jobs. To that end, Congress passed in the stimulus bill $110
billion to subsidize and otherwise support such green efforts. And in
conceptual support of that argument, the administration has referred to
"what's happening in countries like Spain, Germany and Japan, where they're
making real investments in renewable energy."
Well, in March, one of Spain's leading universities, Universidad
Rey Juan Carlos, published an authoritative study "of the effects on
employment of public aid to renewable energy sources." The report pointed
out: "This study is important for several reasons. First is that the Spanish
experience is considered a leading example to be followed by many policy
advocates and politicians. This study marks the very first time a critical
analysis of the actual performance and impact has been made. Most important,
it demonstrates that the Spanish/EU-style 'green jobs' agenda now being
promoted in the U.S. in fact destroys jobs, detailing this in terms of jobs
destroyed per job created."
The central finding of the study is that treating the data
optimistically for every renewable-energy job that the government
finances, "Spain's experience . reveals with high confidence, by two
different methods, that the U.S. should expect a loss of at least 2.2 jobs
on average, or about 9 jobs lost for every 4 created."
Despite expensive and extensive green-job policies, a
surprisingly low number of jobs were created. And about two-thirds of those
"green" jobs were just to set up the energy source, in construction,
fabrication, installation, marketing and administration. Only 10 percent of
the green jobs created were permanent jobs actually operating and
maintaining the renewable sources of energy.
Each wind industry job created in Spain required a subsidy of
about $1.4 million. Overall, the average subsidy cost for each green job was
about $800,000 (571,138 euros). And to create about 50,000 green jobs, Spain
lost 110,000 jobs elsewhere in the economy, principally in metallurgy,
nonmetallic mining and food processing and in the beverage and tobacco
industries.
Each green megawatt brought on line destroyed 5.28 jobs
elsewhere in the economy (8.99 by photovoltaics, 4.27 by wind energy and
5.05 by mini-hydropower). The total higher energy cost the higher cost of
renewable energy over the market price of carbon-based energy between
2000 and 2008 was about $10 billion. Moreover, the report concluded, "These
costs do not appear to be unique to Spain's approach but instead are largely
inherent in schemes to promote renewable energy sources."
The high cost of green energy predictably drove energy-intensive
Spanish companies and industries out of Spain to countries with cheaper
carbon-based energy, while the cost to Spanish taxpayers of renewable-energy
subsidies was "enormous . 4.35 percent of all (value-added taxes) collected,
3.45 percent of the household income tax, or 5.6 percent of the corporate
income tax."
There is much more in the report, which at about 50 pages in
length would make useful reading for our elected representatives. Those who
are worried about global warming may, after studying this report, still want
to subsidize renewable-energy production. But it will be hard for such
people to honestly continue to believe that they can think they are
addressing global warming while creating millions of net new jobs.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
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Tony Blankley is executive vice president of Edelman public relations in Washington. Comment by clicking here.
© 2009, Creators Syndicate
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