Green Jobs and the Economy
President Barack Obama promised jobs, jobs, jobs if we (taxpayers) funded his “green” initiative. But… green jobs company failures are ubiquitous, and are getting more interesting by the minute. Solyndra, a California solar panels manufacturer, filed for bankruptcy and laid off more than 900 full-time employees, leaving just 113 employees, despite half-a-billion dollars in “stimulus” loans. Prior to its demise, President Obama said Solyndra is a successful monument to his “green jobs” agenda. The FBI raided Solyndra’s headquarters on Thursday (September 8, 2011) for unspecified reasons. Agents executed search warrants at the headquarters of Solyndra LLC. One of Solyndra’s major investors was George Kaiser, an Oklahoma oil billionaire who raised large sums of money for Obama during the 2008 election. Obama administration officials were involved in the company’s day-to-day business activities. All we can do is wait and see if the MSM does its job.
President Barack Obama went to an energy plant in North Carolina in June to talk about the job-creating power of a green economy. Yet, almost three years into Obama’s presidency, he can’t point to significant numbers of Americans that are being hired for the green jobs he has been praising. Obama pledged in his 2008 campaign to create 5 million green jobs within a decade. One problem with the green jobs creation is that the money and incentives have run out in the two-plus years since he signed the stimulus package.
Green jobs have proved a myth. Obama came into office insisting that Spain was beating the U.S. in green jobs. In Spain the green-jobs boom has been a bust. A 2009 study at King Juan Carlos University (more below) found that Spain lost 2.2 jobs in other industries for every green job created, and Spain spent more than half a million euros for each green job created since 2000. The New York Times, which has been touting the green agenda for years, said that “federal and state efforts to stimulate creation of green jobs have largely failed, government records show.”
President Obama lauded energy-efficient technology as the industry of the future. But, as green companies get deep into the red, and can’t make payroll, many are wondering what went wrong. “I think green jobs as a solution to our economic problems have been way oversold,” said David Kreutzer of Heritage Foundation. “We’ve created some green jobs in some industries for some period of time but through heavy subsidies, when subsidies stop, those green jobs stop. So it’s not a solution to an economic problem.” Solyndra received a $535 million loan as part of the stimulus package. Now, the company cannot pay back the loan, and the government will have a difficult time recovering the money. Spectrawatt, another green jobs company, received a $500,000 grant to improve solar cells. That company also filed for bankruptcy late last month.
Green jobs are about government subsidies, cronyism, and job cannibalism. They aren’t self-sustaining because they rely on giveaways of taxpayer money and they cost existing jobs. Stimulus plans have always included green jobs and money for them. Said Obama, “the transition to clean energy has the potential to grow our economy and create millions of jobs – but only if we accelerate that transition.” On his Midwest bus tour in August, he promised an additional $2.4 billion for green jobs, especially to make batteries for electric cars. The 2009 “stimulus” bill already provided $2.4 billion for the same purpose. $300 million went to Johnson Controls to manufacture batteries. The firm has added 150 jobs because of the grant, meaning the government spent about $2 million per job.
Learn From Europe?
Economic theory suggests that government’s push to create “green jobs” will ultimately kill more jobs than it creates. That is why a study by the Universidad Rey Juan Carlos in Spain should often be referenced. After examining Spain’s experience with an aggressive wind-power program, study authors concluded:
- As President Obama correctly remarked, Spain provides a reference for the establishment of government aid to renewable energy. The arguments for Spain’s and Europe’s “green jobs” programs are the same arguments now made in the US, that massive public support would produce large numbers of green jobs.
- The Spanish experience cited by President Obama as a model reveals that the US should expect a loss of at least 2.2 jobs, on average, for every “green job” created.
- The study reveals that the US should expect to lose between 6.6 million and 11 million jobs, as a direct consequence of creating 3 to 5 million “green jobs.”
President Obama’s proposal to create 5 million green jobs over 10 years “is a political smokescreen designed to disguise the fact that his energy and environmental policies are going to be very costly,” said Max Schulz of the Manhattan Institute. “The reality is these various policies are going to hurt the economy, cost jobs in efficient industries and raise prices,” Schulz said. Europe is finding the dirty jobs/green jobs swap not such a boon. Most EU member nations aren’t close to meeting Kyoto Protocol and other emissions targets, and all are finding the effort to meet them costly in terms of both euros and jobs.
Green jobs are a magic bullet for the administration, solving the problems of unemployment, poverty, community degradation, class struggles, public health, terrorism, and global warming. What could possibly lead anyone to object to them? Well, real-world experience. Germany and Spain followed the green-jobs road many years ago, for much the same reasons as this administration. They saw it as a way to make their countries world leaders in coming technologies, provide good jobs to replace decaying industries, and insulate against energy shocks originating overseas. It didn’t work. A report from German think tank Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) tells what happened in Germany. Titled “Economic Impacts from the Promotion of Renewable Energies: The German Experience,” it illustrates how the German green-jobs initiative failed to meet any of its objectives. The green jobs that do exist undercut German green-hardware prices – meaning that much of German green-energy installation simply imports cheaper foreign-produced components. The German subsidy of green energy is subsidizing jobs in developing countries; the RWI found that the subsidy of $240,000 per job.
Things haven’t worked out as Germany’s politicians and environmentalists said they would. Instead of bringing economic benefits in terms of lower energy costs, and green energy jobs, implementing wind and solar power raised household energy rates by 7.5 percent. Wind power represents about 6 percent of German electricity generation, and solar power is a mere tenth of that. Germany is finding it difficult to continue subsidizing wind and solar power. In May, 2011, the German parliament cut back the subsidy for domestic rooftop solar photovoltaic systems by 16 percent, and cut subsidies to free-standing systems by 15 percent.
The Netherlands went big for wind power, particularly offshore wind. But the Dutch government has taken exception to subsidies required to build and operate wind farms, and to the expected export of €4.5 billion in subsidies to a German company that would have built, owned, and operated the wind farms. The new prime minister of the Netherlands, Mark Rutte, is reported to have said that “windmills turn on subsidies.” The Netherlands’ green power plants will not produce many green job because the new conservative government has radically reversed course and is slashing subsidies to wind and solar power. The irony here is rich. The Dutch, who have been enamored of wind power for hundreds of years, may have finally had enough tilting at windmills. If even they can’t make it work, one has to wonder if anyone can.
The United Kingdom (Scotland, particularly) has pursued an ambitious wind-power agenda. Prime Minister David Cameron said “This investment is good for jobs and growth, and good for ensuring we have clean energy.” But a study by the consultancy firm of Verso Economics points out that the United Kingdom and Scotland have not fared well in their pursuit of the new green energy and green jobs economy. Here are some key findings from a study:
- For every job created in the United Kingdom in renewable energy, 3.7 jobs are lost. In Scotland, there is no net benefit from government support for the sector, and probably a small net loss of jobs.
- The promotion of renewable energy in the United Kingdom has an opportunity cost of 10,000 direct jobs in 2009-2010 and 1,200 jobs in Scotland.
- The policy to promote the renewable electricity sector in both Scotland and the United Kingdom is economically damaging. Government should not see this as an economic opportunity
Additionally, wind turbines can actually freeze over in winter. Not only do they cease to put out power in very cold weather, they actually need to be heated!
With Thursday night’s (September 8, 2011) jobs creation speech by President Obama, and with his continued insistence on “green jobs” and their effect on our economy, WHY can’t Obama (and his administration) look to Europe to see what awaits this country? Is it that he truly believes that he “can do it better” by providing more subsidies and stimulus? Does he have that much hubris? Or is he just an ideologue?
But that’s just my opinion.