Green Jobs: Innovative or Wasteful?
Obama's energy, jobs plan ahead
The creation of jobs tops the political agenda. But the methods by which the two parties hope to achieve that is a source of contention.
When President Obama delivers on Thursday his revived plan to bolster the economy, he will reiterate that the construction of green jobs remains integral but that success will not be immediate. Just as computers and the internet have edged their way into American lives, the clean technology sector will do the same. As the economy regains its muster, there will be room for such innovation -- the kind of creativity that can be exported around the world.
“If we don't lead, we will have to trade importing oil for importing clean technology,” says Vice President Joe Biden, in a speech. “Innovation and energy will go on whether or not we join, and no nation which expects to be a leader of other nations can fall behind.”
Those green businesses are now dependent on tax breaks and subsidies. And that’s money that the conservatives in Congress say the nation just doesn’t have. The paradox that the Obama administration faces is how to grow the sustainable sector while still funding key projects at adequate levels.
The Congressional Budget Office just released its analysis of how well the federal stimulus plan has performed in the second quarter of this year. Generally, it says that when compared to how the economy would have done without such a stimulus, CBO estimates that Gross Domestic Product has risen between .8 percent and 2.5 percent more.
It adds that those policies have reduced the unemployment rate between .5 percent and 1.6 percent from what it otherwise would have been. And, the stimulus increased the number of people employed between 1 million and 2.9 million.
It projects that the Obama plan will increase gross domestic product next year by .3 percent while increasing employment levels between 400,000 and 1.1 million, as opposed to without a stimulus. In due course, many more jobs will come, making the investment look increasingly attractive.
Critics will suggest dividing the total stimulus by the number of jobs created. Doing so, they say, will show that it may have cost hundreds of thousands to create a green job -- jobs that in some cases that were simply redirected from elsewhere.
The latest whipping boy as far as wasted government monies is California-based Solyndra. It just declared bankruptcy but not before it collected a $535 million loan guarantee. The U.S. Department of Energy is defending the award, saying that the private investors risked $1 billion on the solar manufacturer.
But are renewable energy jobs overhyped? A 2009 study from Madrid’s King Juan Carlos University found for every green job the government creates, 2.2 jobs are lost in competing industries. That is because factories will downsize to compensate for higher energy costs.
Oil, coal and natural gas have dominated their respective markets because they are “superior” to anything else -- not because of their subsidies, says Ken Green, a scholar with the American Enterprise Institute. “If that were the case for wind and solar -- that they were superior -- those technologies would already be widely adopted but in fact, they are not.”
The Obama administration’s take is much different. While green projects have lingered for decades, the commitment to expand them is recent. Some government-funded ventures will fail. But the White House is pointing to 40 other solar businesses that it says are on pace to create more than 60,000 jobs.
From where else might new jobs come? A Clean Energy Standard, which is challenging this country to produce 80 percent of its energy by 2035 from the renewable sector as well natural gas, nuclear and “clean coal” -- all pursuits requiring federal funds. Another idea: Retrofitting homes and businesses to make them more energy efficient. The country would then get double the benefits: cleaner communities and more jobs, says the Center for American Progress.
“We continue to believe the clean energy jobs race is one that America can, must and will win,” says Dan Leistikow, public affairs head for the Energy Department.
While the private sector has the capital, it is not spending it and therefore the federal dollars are still needed, the administration reasons. But that notion conflicts with the desires of the opposing party, which is not only demanding more budget cutting but also reducing taxes and streamlining regulations. A compromise would seem to be in the offing. But with the presidential election around the corner, don’t count on it.
EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
Follow Ken on www.twitter.com/ken_silverstein