A Google search for “millions of green jobs” yields 380,000 references. Every week there’s another report showing how, if the US plays its public policy cards right, we’ll soon be producing most of our energy from “clean,” renewable wind and solar sources, driving around in electric cars that will deliver power back to the grid, and living in super-energy-efficient homes. And, by the way, all of this will create millions of jobs for equipment installers and repairers, and the US will enjoy a renaissance in manufacturing where it will once again be a world leader with more millions of high paying jobs making the kit this new green energy economy will demand.
Promoting this utopian green vision is convenient “lifeboat talk” for many in the political establishment, designed to encourage a dejected public at a time when the economy is barely growing, standards of living are falling and jobs are continuing to migrate overseas. Worse, in an effort to force the pace at which this grand vision will become reality, tens of billions of dollars of taxpayer money in grants, loan guarantees, and tax credits have been shoveled into frequently speculative technologies and even more risky individual companies
Precisely because the vision of “millions of green jobs” now equates to billions of dollars in grants and subsidies to support their development, all sorts of organizations with heavily vested interests are conducting “research” into how many green jobs will be created if a certain set of public policies is implemented. Needless to say, the definition of a green job has been stretched every which way to suit the particular agenda of whatever organization is doing the research.
This has led to some truly extraordinary projections and statistics. A particularly fanciful study was conducted by the American Solar Energy Society in 2009. It examined the number of green jobs that will be created in the US in renewable energy and energy efficiency by 2030 and found that the largest categories of green jobs created in these industries will be accountants and cashiers. Presumably, if I work stacking shelves in Safeway with organic food products and CFLs, I have a green job, whereas a few years ago I didn’t because the store only sold regular foods and incandescent lightbulbs.
A recent book, “The False Promise of Green Energy”, does a fine job of debunking the long list of fallacies inherent in this bogus research on “millions of green jobs” – much of it paid for with government grants – purporting to lay out the economic benefits of plowing huge sums of taxpayer money into efforts to create them.
The models examined in the book are all over the lot in terms of the range, nature and timing of the “green jobs” that can be created by various public policy options, and most are based on extremely questionable assumptions that fly in the face of historical economic reality. The book also highlights other fallacies associated with the overhyped green jobs concept, with a particular focus on renewable energy. For example:
1. It’s financially unfeasible to scale energy production from renewable sources using existing or foreseeable technology to a level where it makes a major difference anytime soon in how we power our economy.
2. Even if that were possible, the notion that the equipment would be largely manufactured in the US is fantasy. China and other low labor cost nations have mastered the business of manufacturing just about everything else that was made in the US 40 years ago. Why won’t they do it in the energy equipment space?
3. The private sector can’t figure out how to get a respectable ROI in the renewable energy space so the industry in the US only exists on the back of extensive taxpayer subsidies. Government’s track record of picking winners in entire technologies, let alone in individual companies, is lousy. In any case, does anyone seriously believe we can outspend China in a renewable energy subsidy competition!?
The recent high-profile bankruptcies of several energy technology companies funded with large amounts of taxpayer money illustrate these problems and show that this type of flawed government policy is imposing a tax on all of us that is no less unacceptable than raising income tax rates across the board. And will it really generate many jobs? How many of you would bet that Tesla Motors, to which the DOE has loaned $465 million to produce cars costing north of $50K, will ever match GM in terms of employment?
Dave Gold, a partner in Access Venture Partners has long argued in his Green Gold Blog that government shouldn’t be involved in the business of investing in specific technologies, let alone individual companies: he says it’s bad policy and bad politics. Like “The False Promise”, Gold argues that the role of government on the one hand is to invest in basic research on which no one else will take a flyer (think NASA-related research) and, on the other, to level the economic playing field: e.g. eliminate subsidies to ALL forms of energy production and cleantech, and put a tax on things we don’t like such as gasoline consumption and plastic bags. Then get out of the way and let the private sector figure out how best to allocate resources to specific technologies and companies.
Green jobs thinking is greatly overblown. The notion that the US should pursue a policy of channeling huge amounts of public funds into the development of renewable energy and related cleantech is seriously flawed, particularly in light of our massive and increasing national debt and the fact that Congress seems incapable of organizing a whelk stall, let alone an energy policy. Whelk Stall? Look it up.
Graham Russell is Founder & Principal at Trupoint Advisors, which helps companies achieve strategic success through sustainable business initiatives. www.trupointadvisors.com. Russell writes and speaks on the subject of sustainable business and teaches sustainability in the University of Colorado Denver MBA program.