I am a sportsman. I spend a lot of time out in the forests and plains, and like all sportsmen—hunters, fishermen—I care deeply about the environment (hunters have done more to preserve our wilderness than any other group), so when I hear about the US going green, I take notice.
President Obama has been talking about a green future for America ever since the election; a future where sustainable technology, renewable energy, plenty of great jobs with high pay and generous benefits would be the rule and not the exception. His rhetoric leads one to believe that the rising green tide will raise all of our boats and that we are about to enter a utopian era of eco-happiness.
A Couple of Questions about Green Jobs
I have a question: What, exactly, is a “green job”? I mean, unless you have a company that specifically creates eco-friendly products in an eco-friendly way, or you work in an eco-friendly service business, some obvious eco-related job, what does it mean? Assuming that we cannot all sell stationary crafted from Southeast Asian elephant dung, plant trees or build windmill farms, what kind of green jobs will people have in Obama’s envisioned eco-utopia?
Along those same lines, I have another question: Will there be a net gain in jobs or a net loss in jobs by going green? The Chinese seem to think that going green will cut jobs and hurt their economy, so do the Indians. China has vowed never sacrifice their economic growth to reduce carbon emissions while India has gone a step further in calling the trade off between carbon caps and economic growth “morally wrong.” Both seem to hold a jobs and prosperity come first stance. Come to think of it, a study performed by researchers at Spain’s Universidad Rey Juan Carlos shows that for every job created in that nation’s renewable energy industry, 2.2 jobs were destroyed elsewhere in the economy. A tad ironic given that Spain is the President’s preferred example of how our green future will go.
Consider also that an MIT study of the effects of a cap-and-trade system like the one President Obama envisions showed that a family of four would pay an additional $1600 to $4900 year in increased costs due to higher energy prices. According to Congressman Joe Barton (R-TX), "The debate is not about whether cap-and-trade legislation will raise energy costs; the only dispute is by how much. With a cap-and-trade scheme like that proposed by Chairmen Waxman and Markey, households can expect energy cost increases up to $3,128 per year. Your electricity bill will increase by 77% to 129%. Filling up your gas tank will cost anywhere from 60% to 144% more. The cost of home heating oil and natural gas will nearly double."
These increases will hit business as well, be passed on to the customers in the form of higher prices, sales will decrease—as they usually do under such circumstances—the bottom line will begin to suffer and so cuts will be made and jobs will be lost. The math is simple and the outcome predictable.
The Myth of the Green Future: The University of Illinois Study
What does that all mean? What it boils down to is that the Administration’s vision for a green economy does not fit with the reality experienced by other countries or the lessons of either current events or history. Some have looked at it rationally and have decided that it would cause more harm than good to their societies, and those who have tried it have lost more than they have gained. This indicates that Obama is basing his programs on a number of green myths that have cropped up over the years.
According to Andrew P. Morriss, Professor of Law and Business at the University of Illinois; William T. Bogart, Dean of Academic Affairs and Professor of Economics at York College of Pennsylvania; Andrew Dorchak, Head of Reference and Foreign/International Law Specialist at Case Western Reserve University School of Law; and Roger E. Meiners, Professor of Economics and Law University of Texas-Arlington:
A rapidly growing literature promises that a massive program of government mandates, subsidies, and forced technological interventions will reward the nation with an economy brimming with “green jobs.” Not only will these jobs improve the environment, but they will be high paying, interesting, and provide collective rights. This literature is built on mythologies about economics, forecasting, and technology.
In their study, Green Jobs Myths, they go on to identify the following seven myths associated with green jobs and a green economy in general:
Myth 1: There is such a thing as a “green job.” There is no coherent definition of a green job. Green jobs appear to be ones that pay well, are interesting to do, produce products that environmental groups prefer, and do so in a unionized workplace. Yet such criteria have little to do with the environmental impacts of the jobs. To build a coalition for a far reaching transformation of modern society, “green jobs” have become a mechanism to deliver something for every member of a real or imagined coalition to buy their support for a radical transformation of society.
Myth 2: Creating green jobs will boost productive employment. Green jobs estimates include huge numbers of clerical, bureaucratic, and administrative positions that do not produce goods and services for consumption. Simply hiring people to write and enforce regulations, fill out forms, and process paperwork is not a recipe for creating wealth. Much of the promised boost in green employment turns out to be in non-productive (but costly) positions that raise costs for consumers.
Myth 3: Green jobs forecasts are reliable. The forecasts for green employment optimistically predict an employment boom, which is welcome news. Unfortunately, the forecasts, which are sometimes amazingly detailed, are unreliable because they are based on questionable estimates by interest groups of tiny base numbers in employment, extrapolation of growth rates from those small base numbers, and a pervasive, biased, and highly selective optimism about which technologies will improve. Moreover, the estimates use a technique (input-output analysis) that is inappropriate to the conditions of technological change presumed by the green jobs literature itself. This yields seemingly precise estimates that give the illusion of scientific reliability to numbers that are simply the result of the assumptions made to begin the analysis.
Myth 4: Green jobs promote employment growth . Green jobs estimates promise greatly expanded (and pleasant and well-paid) employment. This promise is false. The green jobs model is built on promoting inefficient use of labor, favoring technologies because they employ large numbers rather than because they make use of labor efficiently. In a competitive market, factors of production, including labor, earn a return based on productivity. By focusing on low labor productivity jobs, the green jobs literature dooms employees to low wages in a shrinking economy. Economic growth cannot be ordered by Congress or by the U.N. Interference in the economy by restricting successful technologies in favor of speculative technologies favored by special interests will generate stagnation.
Myth 5: The world economy can be remade based on local production and reduced consumption without dramatically decreasing human welfare . The green jobs literature rejects the benefits of trade, ignores opportunity costs, and fails to include consumer surplus in welfare calculations to promote its vision. This is a recipe for an economic disaster, not an ecotopia. The twentieth century saw many experiments in creating societies that did not engage in trade and did not value personal welfare. The economic and human disasters that resulted should have conclusively settled the question of whether nations can withdraw into autarky. The global integration of wind turbine production, for example, illustrates that even green technology is not immune from economic reality.
Myth 6: Mandates are a substitute for markets. Green jobs proponents assume that they can reorder society by mandating preferred technologies. But the responses to mandates are not the same as the responses to market incentives. There is powerful evidence that market incentives induce the resource conservation that green jobs advocates purport to desire. The cost of energy is a major incentive to redesign production processes and products to use less energy. People do not want energy; they want the benefits of energy. Those who can deliver more desired goods and services by reducing the energy cost of production will be rewarded. There is no little evidence that successful command and control regimes accomplishing conservation.
Myth 7: Wishing for technological progress is sufficient. The preferred technologies in the green jobs literature face significant problems in scaling up to the levels proposed. These problems are documented in readily available technical literatures, but resolutely ignored in the green jobs reports. At the same time, existing technologies that fail to meet the green jobs proponents political criteria are simply rejected out of hand. This selective technological optimism/pessimism is not a sufficient basis for remaking society to fit the dream of planners, politicians, patricians, or plutocrats who want others to live lives they think other people should be forced to lead.
The study’s authors conclude that:
To attempt to transform modern society on the scale proposed by even the most modest bits of the green jobs literature, such as the Conference of Mayors report, is an effort of staggering complexity and scale. To do so based on the combination of wishful thinking and bad economics embodied in the green jobs literature would be the height of irresponsibility. We have no doubt that there will be significant opportunities to develop new energy sources, new industries, and new jobs in the future. Just as has been true for all of human history thus far, we are equally confident that a market-based discovery process will do a far better job of developing those energy sources, industries, and jobs than could a series of mandates based on imperfect information.
The Bottom Line
Like Keynesian economics and many other approaches to issues facing the nation, this global warming-driven green energy economics doesn’t work. The technology is not there and to depend on its development within a certain time frame while simultaneously cutting back on proven technology is the height of foolishness. Adding to the costs of energy while in the midst of a job-killing recession is likewise foolish since that would only exacerbate existing problems. Yet the proponents of the green economy know all that. So why do they persist? This is, as the authors of the University of Illinois study state, an attempt to transform modern society. Specifically, it is an attempt to transform American society at the expense of business and the consumer into something that it has never been—a European-style socialist state, using the environment as a means to make such a transformation palatable to the people. This is not science, it is politics, red in tooth and claw.
That said, there is nothing wrong with being green, caring about the environment; recycling, using wind or solar power, cleaning up our messes, planting trees; or protecting animals, waterways, prairies, forests, coastlines—it’s all good. The world we live in is very important and we have already overdeveloped far too many of our wild places, polluted too many of our rivers and pumped far too many chemicals into our atmosphere. There are plenty of good ways we can make the earth cleaner that will not drive workers out of their jobs, entrepreneurs out of their businesses or taxpayers out of their minds. If you can make your business—and your fortune—doing it, so much the better.
These things, however, will take a back seat to the kind of heavy-handed regulation and taxation that this Administration, this Congress, and the global warming crowd in general, are pushing on the American people. Are you ready to pay for their vision of a transformed society? Can you afford to? Can your customers afford to?
I will leave you with those questions. Think about them and if the answer is that you cannot, call you senators and congressmen and let them know what a bad idea this cap-and-trade, green economy business really is.