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Renewable Energy: The Road Less Traveled for a Reason

Posted By Nicolas Loris On April 7, 2009 @ 1:16 pm In Energy | Comments Disabled

President Obama has been touting green energy investment and green jobs since his campaign trail [1], but he really kicked it into another gear once the economy tanked, calling the green stimulus a cure to the recession and to climate change. During his push for stimulus bill support, President Obama said the following [2]at a windmill plant in Ohio:

If we don’t act now, because of the economic downturn, half of the wind projects difficult because of the capital intensive nature of these projects for them to move forward if they can’t get loans, if they can’t get access to credit.

And think about that. Think about all the businesses that wouldn’t come to be, all the jobs that wouldn’t be created, all the clean energy that we wouldn’t produce. And think of what’s happening in countries like Spain, Germany and Japan, where they’re making real investments in renewable energy. They’re surging ahead of us, poised to take the lead in this new industry.

This isn’t because they’re smarter than us, or work harder than us, or are more innovative than we are. It’s because their governments have harnessed their people’s hard work and ingenuity with bold investments — investments that are paying off in good, high-wage jobs — jobs they won’t lose to other countries.”

But is Spain’s model really one we want to replicate? While it’s true Spain’s government has had one of the most aggressive green jobs policies in the world, it has come with significant cost. According to a new study from King Juan Carlos University in Madrid, for every “green job” created 2.2 jobs in other sectors have been destroyed. Furthermore, Spain’s government spent $758,471 to create each green job; Spain’s government used $36 billion in taxpayer money to invest in wind, solar, and mini-hydro from 2000-2008.

To make matters worse, the many of the green jobs created were temporary [3]:

Despite its hyper-aggressive (expensive and extensive) “green jobs” policies it appears that Spain likely has created a surprisingly low number of jobs, two thirds of which came in construction, fabrication and installation, one quarter in administrative positions, marketing and projects engineering, and just one out of ten jobs has been created at the more permanent level of actual operation and maintenance of the renewable sources of electricity.”

The full report, which includes 24 key points well worth reading, can be found here [3].

One more thing. President Obama mentioned something about not losing jobs to other countries. Maybe he’s right about the temporary green jobs he’s creating, but we can’t forget about decisions businesses are forced to make when faced with higher input costs, says author and economist Gabriel Calzada [4]:

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. Microsoft and Google moved their servers up to the Canadian border because they benefited from cheaper energy there.”

To sum it up: Government subsidies that distort the market and ultimately must be paid back by means of borrowing and/or higher taxes. More expensive energy. Net job losses.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/04/07/renewable-energy-the-road-less-traveled-for-a-reason/

URLs in this post:

[1] since his campaign trail: http://www.cfr.org/publication/16627/obamas_speech_on_renewable_energy.html?breadcrumb=%2Fbios%2F11603%2Fbarack_obama%3Fpage%3D3

[2] the following : http://www.clevelandleader.com/node/8587

[3] temporary: http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf

[4] says author and economist Gabriel Calzada: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2PHwqAs7BS0

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