Are Green Jobs an Economic Black Hole?

[SnyderShrugged]

This is from a Blog at Reason, but it refers to a spanish study on green jobs and the potential impact on overall unemployment.

Even though it matches many of my personal thoughts, I would like to acknowledge that a study on the spanish model may not mean the same things for the US approach proposed by President Obama.

Nonetheless, it should be considered when the Green job push is discussed in congress and the press, but I wont hold my breath on that.

Question to the board...

Will the spanish example be considered by our leaders? Is it a valid concern?

President Obama in a speech at the Southern California Edison Electric Vehicle Technical Center last month favorably cited Spain as an example of how to boost an economy by creating green jobs. "Around the world, nations are racing to lead in these industries of the future.... Spain generates almost 30 percent of its power by harnessing the wind, while we manage less than one percent," said Obama.

A new study by researchers at Spain's King Juan Carlos University suggests that the president may want to rethink Spain as a model for stimulating the economy with green jobs. Among the report's findings are:

[W]e find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model 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, to which we have to add those jobs that non-subsidized investments with the same resources would have created...

while it is not possible to directly translate Spain’s experience with exactitude to claim that the U.S. would lose at least 6.6 million to 11 million jobs, as a direct consequence were it to actually create 3 to 5 million “green jobs” as promised (in addition to the jobs lost due to the opportunity cost of private capital employed in renewable energy), the study clearly reveals the tendency that the U.S. should expect such an outcome...

The study calculates that since 2000 Spain spent €571,138 to create each “green job”, including subsidies of more than €1 million per wind industry job...

Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.

These costs do not appear to be unique to Spain’s approach but instead are largely inherent in schemes to promote renewable energy sources.

Of course, one study does not prove that federal green job creation is an economic black hole, but a still small voice in your head should be asking, if governments are so good at creating jobs and picking winning technologies, why doesn't the Soviet Union still exist?

Whole Spanish green jobs study is available here. Read it and weep. See also my colleague Jacob Sullum's excellent column on the dangers of green job fetishism here.
http://www.reason.com/blog/show/132761.html

PDF of the spanish study (which I still need to read in it's entirety)
http://www.juandemariana.org/pdf/090...-renewable.pdf

[Burgold]

Nope. Not at all. If nothing else there's a ton of money in waste management and recycling, organics, etc. Green covers too wide a spectrum. Very soon the Irish will rule us all.

As for the other argument I quickly spied. The convery belt, computerization, robotics all were supposed to make humans obsolete in the workforce. It's just generational unease. (buggy whips are on sale though at WalMart.)

[SnyderShrugged]

Nope. Not at all. If nothing else there's a ton of money in waste management and recycling, organics, etc. Green covers too wide a spectrum. Very soon the Irish will rule us all.

As for the other argument I quickly spied. The convery belt, computerization, robotics all were supposed to make humans obsolete in the workforce. It's just generational unease. (buggy whips are on sale though at WalMart.)

But can we argue that the spaniards felt pain from the "green" job push in terms of job losses overall?

That should be a major concern, I think. I'm trying to wrap my brain around what might be different for the US as compared to spains example.

[Burgold]

The question is whether this is due to a economic shift? Is it a permanent loss of work or is it temporary? If it is, the seismic change in corporate and living structure will likely resettle and new jobs will be invented. I'd imagine as we made the shift from horse and buggy to trains or autos there were quite a lot of folks who suddenly became obsolete and lost their jobs. Then, within a reasonably short term railroads, and autos developed a whole new occupational vocabularly and there were actually more jobs than before.

I would imagine that we had a greater percentage of the nation farming in the 1200's than today. Modern contrivances eliminated the need for the numbers of people to work the farm. However, agrarian changed into something else. There is almost always a something else though it may take time and pain to find it.

[Midnight Judges]

That article doesn't make any sense. Seems like more conservatives pretending there is a direct cause and effect when in fact there is not.

If the article is right, Germany, Spain, Denmark, and the USA would have to be beyond stupid. We're talking monumentally stupid.

It just doesn't pass the smell test.

[Midnight Judges]

I have to confess I had never heard of the 12 year old king juan valdes college in Spain.

I have, OTOH, heard of the University of California:

"Across a broad range of scenarios, the renewable energy sector generates more jobs per average megawatt of power installed, and per unit of energy produced, than the fossil fuel-based energy sector," the report concludes. "All states of the Union stand to gain in terms of net employment from the implementation of a portfolio of clean energy policies at the federal level."

.....

"Renewable energy is not only good for our economic security and the environment, it creates new jobs," Kammen said. "At a time when rising gas prices have raised our annual gas bill to $240 billion, investing in new clean energy technologies would both reduce our trade deficit and reestablish the U. S. as a leader in energy technology, the largest global industry today."

http://www.universityofcalifornia.edu/news/article/6284

[SnyderShrugged]

I have to confess I had never heard of the 12 year old king juan valdes college in Spain.

I have, OTOH, heard of the University of California:



http://www.universityofcalifornia.edu/news/article/6284

so because you never heard of a university in spain, it negates the results of their study?

All I hear from you is one sided banter that seems to belive that there was political motivation within the spanish study of events that their nation experienced first hand.

I can understand if you disagree, but I'd like to know the basis for your disagreement beyond "Thats just stupid".

[SnyderShrugged]

The question is whether this is due to a economic shift? Is it a permanent loss of work or is it temporary? If it is, the seismic change in corporate and living structure will likely resettle and new jobs will be invented. I'd imagine as we made the shift from horse and buggy to trains or autos there were quite a lot of folks who suddenly became obsolete and lost their jobs. Then, within a reasonably short term railroads, and autos developed a whole new occupational vocabularly and there were actually more jobs than before.

I would imagine that we had a greater percentage of the nation farming in the 1200's than today. Modern contrivances eliminated the need for the numbers of people to work the farm. However, agrarian changed into something else. There is almost always a something else though it may take time and pain to find it.

Valid questions, The question of longevity of the job losses is legit. They have only had the program for 9 years so trending may still be an issue, but still, I dont believe we have decades to deal with the current unemployment rate, let alone a potential increased rate.

[Kosher Ham]

How can it ultimately make you tons of money as an employee, when the purpose is to save so much money for everyone else ?

Seems short term for most people.

[Hubbs]

That article doesn't make any sense. Seems like more conservatives pretending there is a direct cause and effect when in fact there is not.

If the article is right, Germany, Spain, Denmark, and the USA would have to be beyond stupid. We're talking monumentally stupid.

It just doesn't pass the smell test.

Let me get this straight. National governments are incapable of doing anything monumentally stupid because if they were, they'd be doing something monumentally stupid?

(And I say this without necessarily agreeing with the article.)

[SnyderShrugged]

some other interesting points of reference from the study (note from 2 "acceptable" universities and the CBO) (pg 15 of the PDF linked in op)

Of course other studies including by U.S. academics have also noted several related
impacts, for example:

· Raising energy costs kills. According to a Johns Hopkins study, replacing threefourths
of U.S. coal-based energy with higher priced energy would lead to
150,000 extra premature deaths annually in the U.S. alone (Harvey Brenner ,
“Health Benefits of Low Cost Energy: An Econometric Case Study,”
Environmental Manager, November 2005).

· Reducing emissions, a major rationale for “green jobs” or renewables regimes,
hits the poorest hardest. According to the recent report by the Congressional
Budget Office, a cap-and-trade system aimed at reducing greenhouse gas
emissions by just 15% will cost the poorest quintile 3% of their annual
household income, while benefiting the richest quintile (“Trade-Offs in
Allocating Allowances for CO2 Emissions”, U.S. Congressional Budget Office,
Economic and Budget Issue Brief, April 25, 2007).

· Raising energy costs loses jobs. According to a Penn State University study,
replacing two-thirds of U.S. coal-based energy with higher-priced energy such
as renewables, if possible, would cost almost 3 million jobs, and perhaps more
than 4 million (Rose, A.Z., and Wei, D., “The Economic Impact of Coal
Utilization and Displacement in the Continental United States, 2015,”
Pennsylvania State University, July 2006)

just in case the credibility of the spanish university come up again.

[Midnight Judges]

Let me get this straight. National governments are incapable of doing anything monumentally stupid because if they were, they'd be doing something monumentally stupid?

(And I say this without necessarily agreeing with the article.)

I was just speaking to the multitude of red flags that go up based on the language in the article-particularly at the end where they compare green jobs to communism or the part where they claim, with no explanation what-so-ever, for every 4 green jobs created 9 other jobs are lost.

But yes, when someone pretends a complex issue is a completely black and white slam dunk, that also raises a red flag for me, as does when someone claims direct cause and effect when the relationship is clearly indirect (such as Government jobs vs. energy prices or taxes vs. employment or minimum wage vs. employment).

In googling this issue I found two extremes. The truth probably lies somewhere in the middle. On the one hand there is a wind industry who simply want to promote it. I am not going to take their word for it because of the massive conflict of interest. OTOH, there is a very powerful established energy industry who clearly have a lot at stake and want wind to fail. I won't take their word for it either.

So that leaves us with two collegic studies in this thread that are in complete and utter disagreement.

Tonight I'll see if I can read the full text.

[SnyderShrugged]

I was just speaking to the multitude of red flags that go up based on the language in the article-particularly at the end where they compare green jobs to communism or the part where they claim, with no explanation what-so-ever, for every 4 green jobs created 9 other jobs are lost.

I agree with you that the bloggers inflamatory language was not neccessary, but I also think that the study itself is what should be looked at rather than the authors perceptions of it.

But yes, when someone pretends a complex issue is a completely black and white slam dunk, that also raises a red flag for me, as does when someone claims direct cause and effect when the relationship is clearly indirect (such as Government jobs vs. energy prices or taxes vs. employment or minimum wage vs. employment).

In googling this issue I found two extremes. The truth probably lies somewhere in the middle. On the one hand there is a wind industry who simply want to promote it. I am not going to take their word for it because of the massive conflict of interest. OTOH, there is a very powerful established energy industry who clearly have a lot at stake and want wind to fail. I won't take their word for it either.

So that leaves us with two collegic studies in this thread that are in complete and utter disagreement.

The difference between the two studies is simple..One (the Spanish study) was based on actual experiential data collected over a 9 year period after the green jobs initiative was implemented in spain, the other..based on mostly inferential data that has yet to come true because it is before said implementation of the proposals. I dont know about you, but I tend to like using real data over a hypothesized version when large scale economic decisions are on the line.

Tonight I'll see if I can read the full text.

[twa]

not worth a new thread

http://thehill.com/blogs/e2-wire/677...lose-its-doors

“Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion,” Solyndra's CEO said.

A California-based solar company that received a $535 million loan guarantee from the Obama administration announced Wednesday that it will shut down.

The company, Solyndra Inc., said Wednesday it would suspend its manufacturing operations and lay off 1,100 employees effective immediately. The company said it intends to file a petition for Chapter 11 bankruptcy protection.

“Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion,” Solyndra CEO Brian Harrison said in a statement. “Raising incremental capital in this environment was not possible. This was an unexpected outcome and is most unfortunate.”

OOPS.

add in Spectrawatt and Evergreen
http://news.cnet.com/8301-11128_3-20...or-bankruptcy/

http://www.cbsnews.com/stories/2011/...20093565.shtml

Why one (big) solar bankruptcy won't trigger meltdown

[twa]

Trouble in paradise?

Renewable energy: Highly publicized solar project delay a disappointment
http://www.mydesert.com/article/2011...ey=mod|mostcom

When Solar Trust of America broke ground on its 1,000-megawatt Blythe solar farm on June 17, the company went all out, complete with fancy invitations, a reception and generous buffet, and visits from top federal and state officials, including Interior Secretary Ken Salazar and California Gov. Jerry Brown.

Two months later, on Aug. 18, the project was delayed more than a year as the company decided on a major technology change, from using solar thermal troughs to photovoltaic solar panels. The company quietly posted a news release on its website.

In Blythe — about eight miles east of the 7,025-acre project site — city officials said they received a heads-up from Solar Trust the day before the company announced it was changing the scope of the project.
...
Solar Trust is the American arm of another German firm, Solar Millennium, AG.

“They must have been in conversations early,” Prior said. “They were looking at this for a while.”

Prior also speculated Solar Trust may have been unable to nail down financing for the project, even with the $2.1 billion federal loan guarantee the company received, also in April. The company would have had to raise at least $800 million, he said.

“That's a lot of money,” he said. “I don't think there was any dishonesty involved. They hoped (investors) would come forward, so then when they exhausted all those options, they started running PV.”