Green jobs: environmental red tape cancels out job creation

In the midst of a recession, costly environmental legislation is not an easy sell. For that reason, the Obama Administration and congressional proponents of an aggressive environmental agenda have tried to recast their policies as a boost to - rather than a drain on - the economy. From the stimulus package to pending global warming legislation to the Senate's upcoming jobs bill, the latest mantra is green jobs - employment to be created by imposing various environmental measures.

But the reality is that these efforts increase federal spending and exert new government control over the private sector. They are thus more likely to harm the economy and reduce the prospects for net job growth. Genuine job creation can be achieved not through more environmental red tape but less - in particular by allowing more domestic energy production.

What is a green job?

Generally, jobs related to renewable energy sources, energy efficiency, battery-powered or other alternatively fueled vehicles, and public transportation comprise most of what are currently considered green jobs. But there is no clear definition of a green job.

For example, proponents of green jobs are split over whether jobs in the nuclear industry - which generates electricity with virtually no air pollution or greenhouse gas emissions but generates nuclear waste - should count as green jobs.

The definition is further complicated by the fact that some jobs are only occasionally green. For example, workers who produce steel or cement are counted as having green jobs to the extent their products go into making wind turbines - but not when they go into coal-fired power plants.

And the definition can change over time. For example, jobs that go into producing fuel ethanol from corn were widely considered green a few years ago, but today many environmental activists have had second thoughts about the merits of this alternative energy source.

In truth, the definition of a green job is highly subjective and can depend every bit as much on fads and fashions and political correctness as on any objective criteria. Of course, now that federal money is involved, various special interests are vying to characterise themselves as "green."

Can green jobs reduce unemployment?

Not when they require significant government assistance. When the President and Congress talk about green jobs, they are talking about ones created via federal tax breaks, subsidies, or outright mandates. For example, wind- and solar-generated electricity (PDF 94.5KB) already enjoys subsidies nearly 50 times higher per unit of energy output than ordinary coal and 100 times higher than natural gas.

Green-job subsidies siphon resources and jobs away from other parts of the economy. A study of alternative energy in Spain (PDF 623KB) estimates that the cost of such subsidies for wind and solar prevents 2.2 such private-sector jobs for each green job created.

Mandates (such as those in place requiring the use of ethanol in gasoline and proposed ones to set federal renewable electricity standards) kill jobs by raising energy costs. The only reason these alternative energy sources need to be mandated in the first place is that they are too expensive to compete otherwise. Thus, in addition to forcibly supplanting traditional energy jobs, renewable energy mandates raise energy costs and thus destroy jobs, especially in energy-intensive manufacturing.

President Obama has done many media events at wind turbine factories, boasting about the green jobs at each. However, for every federally created green job seen, there are unseen jobs that are destroyed.

What has the experience with green jobs shown?

Before the US expands its green jobs agenda, a look at the experiences of those nations that have already gone further down that road would be instructive.