Friday, May 21, 2010

The Green Jobs Myth



Jobs: A Spanish economics professor said attempts by his country to create a green economy would fail. Now a Spanish government report confirms his findings, blunting claims that the professor's report was biased.

The professor, Gabriel Calzada Alvarez of Juan Carlos University in Madrid, produced a 41-page study last year on the European experiment of going full bore on the conservation front. He found that "the Spanish/EU-style 'green jobs' agenda now being promoted in the U.S. in fact destroys jobs."

For every green job created by the Spanish government, Alvarez found that 2.2 jobs were destroyed elsewhere in the economy because resources were directed politically and not rationally, as in a market economy.

"The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices," the professor told the press.

Alvarez's findings, of course, were rejected by the environmental left, which tried to smear him as a stooge of the oil industry.

But inconveniently for the eco-conscious, his results have been backed up by Carlo Stagnaro and Luciano Lavecchia, a couple of researchers from the Italian think tank Istituto Bruno Leoni.

They found that in Italy, the losses were worse than they were in Spain: Each green job cost 6.9 jobs in the industrial sector and 4.8 jobs across the entire economy.

"Green investments are an ineffective policy for job creation," they say in their report. Despite the other merits of investments in new energy, "to the extent that the 'green deal' is aimed at creating employment or purported as anti-crisis or stimulus policy, it is a wrong policy choice."

Even more inconvenient for the environmental left is a study by the Spanish government. This leaked document supports the Alvarez report. The green lobby can't claim bias in this analysis because the Zapatero administration that compiled it is a socialist government that sees windmills when more rational people see dragons.

According to Chris Horner, a senior fellow at the Competitive Enterprise Institute who has seen a copy of the report, the "Spanish government now acknowledges the ruinous effects of green economic policy."

Horner wrote this week on Pajamas Media, "This internal assessment preceded the Zapatero administration's recent acknowledgment that the 'green economy' stunt must be abandoned, lest the experiment risk Spain becoming Greece."

Horner wrote that while the government report "does not expressly confirm" the Alvarez findings, "the figures published in the government document indicate they arrived at a job-loss number even worse than the 2.2 figure from the independent study."

As Spain tries to keep its economy from going Greek, the government is lopping off the fat. This means it will have to cut back on subsidies for its alternative-energy initiatives, if not abandon them altogether, as Horner mentioned.

Miguel Sebastian, Spain's trade minister, has said funds for authorized projects won't be reduced. He also has reportedly indicated that new subsidies for wind and solar projects aren't likely to be as generous. It would be no surprise if he backtracked and said all renewable subsidies will be cut.

The findings from Europe contradict President Obama's claim in his State of the Union address that "the nation that leads the clean energy economy will be the nation that leads the global economy." Before he took office, he warned that the U.S. was falling behind nations that are "making real investments in renewable energy."

Now it looks like the U.S. is lucky to be lagging in alternative-energy investment. The Alvarez study says that following the Spanish model, held up by Obama as a standard the U.S. should follow, is likely to cause 6.6 million to 11 million job losses "as a direct consequence were it to actually create 3 to 5 million 'green jobs.' "

Renewable energy is trendy and for many offers political gain. But Washington should shut down the green economy nonsense before too much of other people's money is spent on projects that do more harm than good.

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