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  • Our Jobless Green Future

    This past summer we took the Center for American Progress to task for putting their name on a “study” purporting to show how how many “green collar jobs” $100 billion in government spending on “green investments” would create. At the time, we argued that all of CAP’s green job creation numbers were worthless since they ignored all the jobs that would be destroyed by the taxing and regulation needed to subsidize those green jobs.

    Now a new study out of Spain, the very country President Barack Obama cites as an example of his green job future, demonstrates just how right we were. The Wall Street Journal reports:

    The study, released last month by researchers at Universidad Rey Juan Carlos, uses data from the Spanish government and European Union to demonstrate that each job created in Spain’s renewables industry costs as much as 2.2 jobs elsewhere in the economy.

    Not only did Spain’s green energy policies cost jobs, they also created a green energy bubble that is bursting just like the housing bubble that has crippled our economy:

    What hasn’t been reported in much detail from the Juan Carlos study is the way Spanish renewable-energy policy created an enormous investment bubble that may already be bursting. In many ways, this is the most important element of the report.

    Since 2004, Spain’s Socialist government has essentially guaranteed a huge return on any investment in solar, wind or hydro. It’s done so by requiring electricity distributors to buy all renewable energy produced in the country, at prices that at times have been 10 times higher than market rates. This is known as a “feed-in price,” and it has cost Spanish energy customers an extra €28.6 billion this decade.

    Initially, the government set a regulated price for solar power of 575% of market rates for small producers and “only” 300% for larger ones. The result was a series of inefficient solar farms small enough to get the higher subsidy but often owned by the same companies. And not just by power companies: “builders, real estate companies, hotel groups and even truck manufacturers” got in on the action.

    In 2007 the government finally tweaked the subsidy schedule to level the playing field for larger solar producers. Yet within four months, regulators realized that the mandated prices were still so generous that 85% of all solar-powered generating capacity due by 2010 was already in place. To rein in the market, Madrid passed still another law that sharply reduced incentives to build new solar capacity.

    Firms had one year to get in under the old system, and, boy, did they work overtime to make it: Government data indicate that 83% of Spain’s solar capacity was installed in those 12 months. That jump came after solar capacity had already grown by 118% in 2005, 308% in 2006, and 458% in 2007. In all, solar-power capacity in Spain grew by more than 20,000% from 2004 to 2008, a rate surpassed perhaps only by Zimbabwe’s inflation.

    If that’s not a bubble, we don’t know what is. And while it will be a few months longer before the effects of the new, stricter solar regime can be measured, it’s not hard to predict sluggishness — if not an outright bust.

    Madrid’s chosen method of curtailing solar-power growth is to set a quota for new installations, one that equals about 15% of the growth seen in 2008. That means the jolly green job fairy will soon be leaving: Two-thirds of the roughly 50,000 jobs created in renewables have been in construction, manufacturing and installation — exactly the kind of growth that couldn’t be maintained, and which Madrid is explicitly trying to curb now. Trade unions say the new law has already led to 15,000 solar job losses in just a few months — and that was before the 480 that BP cut.

    Some people might be tempted to conclude from Spain’s experience that renewable-energy policies must simply be drawn up more tightly to avoid this kind of boom and bust. They’d be wrong.

    Spanish policy shows that green dreams like renewable energy are achievable only through massive transfers of money from productive sectors to those seeking to get rich quick thanks to government mandates. And that the few jobs created greatly depend on maintaining impossible levels of growth. Even in Mr. Obama’s Washington, you can’t print enough greenbacks to pay for these green jobs.

    Posted in Energy [slideshow_deploy]

    4 Responses to Our Jobless Green Future

    1. jr., Michigan says:

      duh! green jobs=no paychecks.

    2. TJ, Georgia says:

      When will some realize that there will be no energy jobs when the oil runs out, no energy jobs if the foreign country's we depend on turn off the spigot, no energy jobs if we have to go to war with those countries, etc.

      How long will some go one making excuses for oil companies and foreign oil. Enough already.

      Sooner or later someone has to end our dependence on foreign oil. Someone has to make the tough decision.

      Rather than thinking of ways to complain about the inevitable, why not focus on ways to make renewable energy, U.S. resources a work.

    3. Pingback: Are polar ice caps really melting due to global warming? « Wintery Knight Blog

    4. Mickey,Tennessee,USA says:

      Oil will never run Out,Sir,how was it made in the 1st place?, decaying organisms. What will our is the ablity for a world to run on debt. The US undre Wilson's Progressives movement that restrains government from giving away control of our money supply to a private banking cartel,gave way for the abilty to manipulate congress to service their needs as congress sat by and service their needs,be it political or finacial.If a company does not "get with the program" they get crushed. I wish you would read Beind the Curtain:by Martain Armstrong. To green energy, there is small place where it should be studied on scales that will not take goverment money,but private money & if it where so damn great more private money would be in it! A recent volcano released more green house gases than all human activity before the 1st coal fire plant was created.America is in debt up to their eyeballs by the creation of easy money & more regulations to extend that credit,this is insane. We are using 18th century economic theory for 21st century problems that are world wide.As this gov grows so will the power within it, to destroy the great ideals for the political favers owed by both the president & congress. Common sence is no where to found in DC or the sorry lobbist for big farmers,investment bankers,the FED and the "Men Behind the Curtain"! If You want to know what this has to about green jobs or cap & trade plus higher taxes,look to the members of congress that indirectly will gain market vaule in such a scheme to fleece Americans more after the last bust!

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