Studies challenge job creation via overhaul of energy

Bob Tippee
Editor

A centerpiece of the Obama administration's proposal to overhaul US energy markets—the promise of an employment surge from "green jobs"—has come under attack.

Two recent studies strengthen doubt that wasteful spending is a way to bolster employment.

A study published by University Rey Juan Carlos of Madrid examines the experience of Spain, which has followed the European Union pattern of subsidizing renewable energy in quest of green jobs. The Obama administration's aggressive energy initiatives emulate that model.

Results aren't encouraging, say authors Gabriel Calzada Alvarez, Raquel Merino Jara, Juan Ramon Rallo Julian, and Jose Ignacio Garcia Bielsa.

They don't hesitate to relate Spain's experience to the US initiative.

"The study's results demonstrate how such 'green jobs' policy clearly hinders Spain's way out of the current economic crisis, even while US politicians insist that rushing into such a scheme will ease their own emergence from the turmoil," the authors say.

From an analysis of data for Spain generated by the Monitoring and Modeling Initiative on Targets for Renewable Energy, partly funded by the European Commission, the study draws this conclusion:

"For every renewable-energy job that the state manages to finance…the US should expect a loss of at least 2.2 jobs on average, or about 9 jobs for every 4 created, to which we have to add those jobs that nonsubsidized investments with the same resources would have created."

A University of Illinois paper, meanwhile, examines literature projecting massive creation of high-quality green jobs via government subsidization of renewable energy and concludes that it's "built on mythologies about economics, forecasting, and technology."

Authors are Andrew P. Morriss of the University of Illinois College of Law, William T. Bogart of York College of Pennsylvania, Andrew Dorchak of Case Western Reserve University Law Library, and Roger E. Meiners of the University of Texas at Arlington.

The Spanish study can be found on the web site of the Juan de Mariana Institute, of which the lead author is director, at www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf. An abstract of the University of Illinois paper appears at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1358423.

(Online Apr. 9, 2009; author's e-mail: bobt@ogjonline.com)


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