The Green-Jobs Engine That Can't

During the 2008 presidential campaign, Barack Obama promised to transform America's energy economy by creating millions of "green jobs." This new energy economy, Obama explained weeks later, would be an "engine of economic growth" to rival the computer and one, moreover, that we could build "easily."

In a time of economic uncertainty, we can agree on the benefits of green jobs, right? Not quite. If the green-jobs claim sounds too good to be true, that's because it is. Making matters worse, a powerful green-jobs movement has emerged, made up of left-wing antipoverty activists and union leaders, all of them clamoring for a more conventional kind of green: government dollars.

What is a "green job," anyway? The American Solar Energy Society, a leading proponent of the cause, says that green employment isn't reserved for scientists and researchers; the industry also needs "project managers, accountants, assemblers, IT professionals, customer service reps, marketing professionals and account executives." The society acknowledges that no real standards exist for what constitutes a green job. Work in an energy-intensive smelting plant producing steel for a wind turbine, and you might wind up in the green-jobs column, despite the belching pollution.

There's an unavoidable problem with renewable-energy technologies and the policies that promote them: from an economic standpoint, they're big losers. Renewables can't produce the large volumes of useful, reliable energy that our economy needs at attractive prices. Government subsidizes renewables because the free market won't. In many cases, these subsidies amount to little more than welfare for companies and industries with political connections.

WASTED SUBSIDIES

The green subsidies are considerable. The U.S. Energy Information Administration reported in early 2008 that the government subsidizes solar energy at $24.34 per megawatt-hour and wind power at $23.37. Yet even with decades of these massive handouts, as well as numerous state-level mandates for utilities to use green power, wind and solar energy contribute less than one-half of 1 percent of our nation's electricity.

The alternative technologies at the heart of Obama's plan, relying on more such government handouts and mandates, will inevitably raise energy prices—and high power prices are job killers. Industries that make physical products, whether cars or chemicals or paper cups, are energy-intensive and will gravitate to low-energy-cost locales.

Keep in mind, too, that the traditional industries currently supplying Americans with reliable, affordable energy already employ millions of workers. A radical plan to transform our energy economy in favor of renewable energy technologies would put many of those people out of work.

But won't all those new green jobs make up for whatever economic hardship results? That's the contention of New York Times columnist Thomas Friedman. In his recent bestseller, "Hot, Flat, and Crowded: Why We Need a Green Revolution—and How It Can Renew America," Friedman argues that a government-directed green program would rebuild America's strength and bolster our economy for the 21st century—regardless of whether global warming turns out to be a serious problem.

FOOLISH FALLACIES

Friedman, like Obama, sees only the upside. Danish economist Bjorn Lomborg agrees that global warming is real and man-made, but he differs with Friedman's response. "It is foolish to deny climate change," says Lomborg. "But it' s also foolish to deny climate economics, which Friedman does." Lomborg says Friedman's argument "simply fails to address the cost of his proposed solutions, and fails to weigh those costs against the benefits."

Obama and Friedman have become the latest proponents of a common economic fallacy. One version holds that World War II and its aftermath were a boon for the American and European economies, since militarizing in America and rebuilding Europe spurred much-needed economic activity. Economist and New York Times columnist Paul Krugman peddled another version when, shortly after the Sept. 11 attacks, he suggested a possible silver lining: the destruction of the World Trade Center would require new construction and therefore reinvigorate economic activity downtown.

Such thinking was debunked a century before World War II. The 19th-century French economist Frederic Bastiat made an invaluable contribution to modern economics by demolishing the notion that a broken window is a good thing inasmuch as it provides work for the glazier. As Bastiat observed, the money that goes to pay the glassmaker would, had the window never been broken at all, have supported some other productive enterprise. Society as a whole winds up poorer, even if the glassmaker profits.

INDUSTRY LOSES

With his promise of 5 million new green jobs, Obama heaves a brick straight through Bastiat's window. Yesterday's glazier is tomorrow's solar-panel installer. The green-jobs promise amounts to killing jobs in efficient industries to create jobs in inefficient ones—hardly a recipe for economic success. There may be legitimate arguments for taking dramatic steps to fight climate change. Boosting the economy isn't one of them. Higher costs and job losses aren't the only drawbacks of the green-jobs push. We also must contend with a burgeoning activist movement. These unlikely eco-cadres—largely composed of labor union officials and inner-city community organizers—seem less interested in protecting the environment than in agitating for "economic justice" and airing ethnic, racial, and other grievances.

Inner-city Oakland may well be the heart of this new movement. Mayor Ron Dellums has pioneered the Oakland Green Jobs Corps, which began dispersing money in the fall for eligible groups to run green-job-training programs. According to the organization's documents, "The program will have a special focus on providing 'green pathways out of poverty' by recruiting and training people with barriers to employment."

Dellums had help from Oakland-based community activist Van Jones, who played a large role in persuading Congress to pass a Green Jobs Act in 2007 that will soon funnel more than $125 million to antipoverty and environmental groups across the country. Jones is perhaps the leading proponent of harnessing the green-jobs wave to benefit low- or no-skilled candidates, many with troubled backgrounds. One gets the impression that Jones is passionately committed to the environment. He talks up the need for a "green New Deal," for instance, that will "help our Rust Belt cities blossom as Silicon Valleys of green capital."

But a look at the Web sites and reports of the many organizations with which he's been connected suggests that his commitment is less about nature than about welfare—for inner-city residents without the skills or knowledge to compete in a 21st-century economy, and for the poverty organizations that collect the money for government job-training programs.

If Jones and his compatriots in the green-jobs movement truly wanted to help poor minorities, they might start by taking a long, hard look at the history of government-run job-training programs. In terms of money wasted, skills not imparted, and opportunities lost, the history of such programs is abysmal.

LOOK TO PRIVATE SECTOR

It would be comforting to think that Obama has better sense on the green economy than his Oakland counterparts. If he does, he'll recognize that the best way to a greener, more prosperous future would be for the government simply to set goals and parameters for the private sector, and then step aside and let the market work. That might mean instituting a carbon tax or a greenhouse-gas-emissions cap-and-trade program. It might even mean banning new coal plants outright.

What it emphatically does not mean is spreading around yet more taxpayer wealth to uneconomic industries and establishing make-work programs for parolees and high school dropouts.