Tyler Cowen on the Benefits of Creating Green Jobs

October 19th, 2009

I am sick and tired of politicians, Republicans and Democrats alike, bragging that they “create” jobs. No. The only way the government can actually add a job is by hiring a civil servant. And this civil servant’s salary comes at the expense of the taxpayers. Ultimately, a private employee may lose their job because his employer can no longer afford to pay the taxes the government mandates. Simple economics, it seems.

Yet, the current vogue is for politicians to brag about the benefits of  “creating green jobs.” This makes even less sense.

Tyler Cowen has a great post debunking the myth of “creating” green jobs.

Here is a report from Gabriel Calzada Alvarez, on green jobs:

Optimistically treating European Commission partially funded data, we 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.
And this:

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.

You can quibble with those numbers for a long time but when you admit opportunity cost basically he has the right idea.  This topic came up a few times in Edmonton and in the U.S. there is a guy named Bracken Hendricks pushing the “green jobs” argument.  To be sure, there are very real benefits from limiting climate change.  But if it takes more jobs to produce “green energy,” that is a net cost to the economy, not a benefit.  Hendricks notes:

We estimate this sustained expansion in clean-energy investments triggered by the economic stimulus program and the potential implementation of Federal climate and clean-energy legislation, can generate a net increase of about 1.7 million jobs nationally.

We’re dealing now with something beyond the Keynesian short run and so those extra jobs are a drain of resources from elsewhere.  If you wish, sub out the word “energy” and sub in the word “agriculture” and then reevaluate the sentence from the vantage point of 1900.  Would it truly create net jobs — much less good jobs — to trash tractors and industrial fertilizer?  The ideal situation would be a technology where very few jobs were required to create and distribute the nation’s energy supply.  Remember Bastiat’s candlemakers’ petition against the sun?  It’s turning out to be a better hypothetical example than Bastiat himself ever realized.