This post will debunk “7 Myths About Green Jobs” and the longer version, Green Jobs Myths [PDF]. The internal inconsistencies and general illogic of these articles are staggering: Progressives will be quoting from them in defense of our positions for years to come (see debunking of Myth 6).
These two articles survey and critique the green jobs literature, including a Center for American Progress (CAP) report on Green Recovery. The authors write, “the CAP report is the product of left-leaning think tanks (sic) in Washington, D.C.” They note CAP is “headed by former Clinton Administration member John Podesta … who served as co-chair of the Obama transition team.”
So it is only fair to note that the myth articles were “produced with support from the Institute for Energy Research,” which itself “has received $307,000 from ExxonMobil since 1998.” The President of IER is Robert Bradley “who previously served as Director of Public Policy Analysis at Enron, where he was a speechwriter for CEO Kenneth Lay,” who was “convicted on fraud and conspiracy charges” on May 25, 2006.
‘Nuff said on that.
The green jobs imperative rests on three legs:
- Action on global warming is inevitable, so countries that act first will reap a competitive advantage.
- We import several hundred billion of dollars of oil each year, so replacing that oil with home-grown energy and home-made technology has multiple economic benefits, including job creation.
- In the near future, the only jobs left will be green. That is because our current system of production is unsustainable — it will destroy a livable climate for the next 1,000 years.
President Obama understands all three of those points, as he has made clear in two recent speeches:
“We can remain the world’s leading importer of foreign oil or we can become the world’s leading exporter of renewable energy. We can allow climate change to wreak unnatural havoc or we can create jobs preventing its worst effects.”
Conservatives hate the notion of green jobs because their entire anti-science, anti-climate, anti-environment message is built around the (false) notion of a trade-off between reducing pollution and jobs.
Conservatives have only one job-creation message: lower taxes for the wealthy. And that strategy failed miserably — indeed catastrophically — as the last several years have painfully demonstrated.
Conservatives no longer have a defensible job creation strategy. And they have explicitly rejected all 3 climate strategies (a market-based incentive price for CO2, higher funding for clean energy, regulations to promote clean energy). So their only remaining message today is a negative one: We must do nothing whatsoever on global warming because it threatens our economy and jobs.
This ideological and messaging straight jacket has led the conservative movement stagnation to such extremes that, for instance, The Heritage Foundation even opposes energy efficiency. The two articles that are the subject of this post are but the latest examples. The abstract to “7 Myths About Green Jobs” says the authors:
” … surveyed this green jobs literature, analyzed its assumptions, and … found that the prescribed undertaking would lead to restructuring and possibly impoverishing our society.”
It is staying on the business as usual path that would certainly impoverish our society immeasurably. To the conservative economists who wrote the report, “restructuring” means pursuing a low carbon, resource-efficient economy and hence avoiding the inevitable collapse of our current Ponzi scheme.
Let me focus on the myths here:
Myth 1: Everyone understands what a “green job” is.
Fact 1: No standard definition of a “green job” exists.
… Committing hundreds of billions of dollars to promoting something lacking a transparent definition cannot be justified.
This argument is so silly as to barely deserve rebuttal. It might surprise the authors to know, for instance, that “national security” lacks a standard, transparent definition and has since its widespread introduction some six decades ago (see Chapter 1 of my book on that specific subject for the Council on Foreign Relations: Defining National Security). And yet somehow we pursue national security and devote hundreds of billions of dollars a year to it.
For the record, my preferred definition is “green jobs are those that do not plunder nonrenewable energy resources and natural capital and/or do not to destroy a livable climate.”
Myth 2: Creating green jobs will boost productive employment.
Fact 2: Green jobs estimates in these oft-quoted studies include huge numbers of clerical, bureaucratic, and administrative positions that do not produce goods and services for consumption.
These green jobs studies mistake any position receiving a paycheck for a position creating value. Simply hiring people to write and enforce regulations, fill-out forms, and process paperwork is not a recipe for creating wealth. Much of the promised boost in green employment turns out to be in non-productive — and expensive — positions that raise costs for consumers. These higher paying jobs that fail to create a more eco-friendly society dramatically skew the results in both number of green jobs created and salary levels of those jobs.
No and no. And no. [Though I am glad that these guys seem to be endorsing the notion of creating a “more eco-friendly Society.”]
These economists are really stuck in a 1970s model of end-of-pipe command-and-control regulation, as opposed to the innovation-driving, market-based approach advanced by President Bush’s father (with SOx trading), progressives, and competitiveness experts like Harvard’s Michael Porter (see “Why the United States REQUIRES a strong climate bill to remain competitive“).
Now it is true that some fraction of the green jobs are not production-line jobs — green companies need secretaries and CFOs, too. But it is just silly to say any significant fraction of the green jobs are just paperwork processors.
How silly is this argument? In Myth 4, the authors claim “the green jobs described in the literature actually encourage low-paying jobs in less desirable conditions.”
That’s right, these economists are simultaneously arguing on the one hand that we shouldn’t try to create green jobs because they are “higher paying jobs” and on the other hand we shouldn’t try to create green jobs because they are “lower paying jobs.” I think it was Harry Truman who said, “Give me a one-armed economist!“
[Note to self: Have we finally answered the Zen question — What is the sound of one hand clapping? It is the sound of a useful economist.]
It might be added that nongreen companies like ExxonMobil create lots of jobs that do not produce goods or services for consumption, such as lobbyists and economists working for conservative think tanks. But I digress.
Myth 3: Green jobs forecasts are reliable.
Fact 3: The green jobs studies made estimates using poor economic models based on dubious assumptions.
… Moreover, the estimates use a technique (input-output analysis) that is inappropriate to the conditions of technological change presumed by the green jobs literature itself. This yields seemingly precise estimates that give the illusion of scientific reliability to numbers that are actually based on faulty assumptions.
They cannot be serious. At best, this is an argument for spending more money on better modeling — and I’m quite confident that better modeling of technological change would show that more green jobs were created by progressive policies, not fewer (but we’ll have to wait for a progressive economist to document that).
But in reality this is the most laughable argument of the bunch. Conservatives thrive on economic analyses that don’t model technological change well (see “Wrong Again 2: Delayers cry wolf with same old Garbage In, Garbage Out economic model“).
I defy anyone to name even a single major study by a conservative organization or fossil fuel company critiquing action on global warming, specifically a cap-and-trade bill, that uses an economic analysis adequately models technological change. Certainly the Energy Information Administration’s NEMS model, which is probably the one most widely used, simply inputs a variety of arbitrary technology assumptions, including ones that limit the growth of key clean energy technologies like wind.
I look forward to quoting the sentence highlighted above in a future critiques of conservative economic analyses, which give new meaning to the terms “illusion of scientific reliability” and “faulty assumptions.”
Myth 4: Green jobs promote employment growth.
Fact 4: By promoting more jobs instead of more productivity, the green jobs described in the literature actually encourage low-paying jobs in less desirable conditions. Economic growth cannot be ordered by Congress or by the United Nations (UN). Government interference in the economy — such as restricting successful technologies in favor of speculative technologies favored by special interests — will generate stagnation.
Green jobs estimates promise greatly expanded (and pleasant and well-paid) employment. This promise is false. The green jobs model is built on promoting inefficient use of labor. The studies favor technologies that employ large numbers of people rather than those technologies that use labor efficiently. In a competitive market, the factors of production, including labor, are paid for their productivity. By focusing on low productivity jobs, the green jobs literature dooms employees to low wages in a shrinking economy. The studies also generally ignore the millions of jobs that will be destroyed by the restrictions imposed by governments on disfavored products and technologies.
Exactly backwards in every respect. First, the jobs in unsustainable industries are doomed because they are … unsustainable and contributing to humanity’s self destruction (see “When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green“).
Second, pollution is harmful waste and inefficient use of energy is inherently unproductive. Renewable energy and energy efficiency are inherently more productive than what they replace. As but one example, the heat lost by U.S. electricity generators today equals all of the energy the country of Japan uses for every purpose. Thus cogeneration or a combined heat and power is inherently more productive and less wasteful (see “Recycled Energy — A core climate solution“).
Ultimately, our country can become much more efficient in its use of energy, and that is a big productivity booster (see “Energy efficiency is THE core climate solution, Part 1: The biggest low-carbon resource by far“). I will blog more on this later.
The wind industry now employs more people than coal mining in the United States. Wind industry jobs jumped to 85,000 in 2008, a 70% increase from the previous year, according to a report released Tuesday from the American Wind Energy Association. In contrast, coal mining employs about 81,000 workers.
The 35,000 jobs the wind industry added in 2008 are almost certainly the single biggest source of new jobs created in the entire energy industry last year.
These ain’t low-paying jobs.
Myth 5: The world economy can be remade by reducing trade and relying on local production and reduced consumption without dramatically decreasing our standard of living.
Fact 5: History shows that individual nations cannot produce everything its citizens need or desire. People and countries have talents that allow specialization in products and services that make them ever more efficient, lower-cost producers, thereby enriching all people.
This is a strawman and reductio ad absurdum. First off, again, it is the failure to prevent catastrophic global warming that will dramatically decrease our standard of living for 1000 years to come.
Second, the principal “trade” that progressives want to reduce is our dangerously unsustainable importation of 60% of our oil from mostly non-democratic countries at a cost of several hundred billion dollars a year. And yes we want to do that with local production like American-made high-efficiency cars and American-made electricity running plug-in hybrids.
Quite separate from global warming, we are facing imminent peak oil (see “Merrill: Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015” and “Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!” and “IEA says oil will peak in 2020“). The only Saudi Arabias of oil left are home-grown energy efficiency and renewable energy. Failing to embrace them quickly, means $200 a barrel oil is right around the corner — a new McKinsey study makes the same point here.
Myth 6: Government mandates are a substitute for free markets.
Fact 6: Companies react more swiftly and efficiently to the demands of their customers/markets, than to cumbersome government mandates.
Green jobs supporters want to reorder society by mandating preferred technologies and expenditures through government entities. But the responses to government mandates are not the same as the responses to market incentives. We have powerful evidence that market incentives prompt the same resource conservation that green jobs advocates purport to desire. For example, the rising cost of energy is a major incentive to redesign production processes and products to use less energy. People do not want energy; they want the benefits of energy. Those who can deliver more desired goods and services by reducing the energy — and thus the cost of production — will be rewarded. On the other hand, we have no evidence to support the idea that command and- control regimes accomplish conservation.
This argument is so internally inconsistent as to raise the question of whether the authors even understand what they are saying, even understand that they are making the progressive case for us.
First off, my response to Myth Two already addressed this tired red-herring that progressives are promoting 1970s model of end-of-pipe command-and-control regulation, rather than innovation-driving, market-based strategies, including emissions trading of the kind the first President Bush enacted.
Second, let’s be very clear on exactly what the authors are saying, since I for one expect to be quoting them in the future:
We have powerful evidence that market incentives prompt the same resource conservation that green jobs advocates purport to desire. For example, the rising cost of energy is a major incentive to redesign production processes and products to use less energy.
But this is precisely the same argument that progressive advocates of green jobs make! We want to use this very market incentive — making dirty energy more expensive. That is the whole point of a cap-and-trade. So I’m glad these conservative economists acknowledge that higher costs for dirty energy are “a major incentive to redesign production processes and products to use less energy” — although they seem a tad confused about the direction of energy prices in the last several months, since they write about “the rising cost of energy.
It is standard economics that the best way to deal with any pollutant is to have its price reflect its damage to human health and well-being. That is what progressives support. The two sentences quoted above offer a ringing endorsement for the progressive strategy.
Myth 7: Wishing for technological progress is sufficient.
Fact 7: Some technologies preferred by the green jobs studies are not capable of efficiently reaching the scale necessary to meet today’s demands.
The green jobs literature’s preferred technologies face significant problems in scaling up to the levels they propose. These problems are well documented in readily available technical literature, yet are resolutely ignored in the green jobs reports. At the same time, existing viable technologies that fail to meet the green jobs supporters’ political criteria are simply rejected out of hand. This selective technological optimism/pessimism is not a sufficient basis for remaking society to fit the dream of planners, politicians, or special interests who think they know best, despite empirical evidence to the contrary.
At the risk of repeating myself, this argument is so internally inconsistent as to raise the question of whether the authors even understand what they are saying.
It is only conservatives who are “wishing for technological progress” — advancing rhetorical positions that they don’t back up with real policy (see “Bush climate speech follows Luntz playbook: “Technology, technology, blah, blah, blah” and Bush wanted to destroy the future of coal as much as the industry did, Futuregen was “nothing more than a public relations ploy,” House study finds).
Progressives support a variety of policies to achieve technological progress and market penetration of clean energy — market incentives, R&D, innovation-driving regulations, and so on — all of which conservatives strongly oppose (see “Hill conservatives reject all 3 climate strategies“).
The scientific and technological literature makes clear that with the right policies, the key energy-efficient and renewable energy technologies most certainly do scale:
- Absolute MUST Read IPCC Report: Debate over, further delay fatal, action not costly
- Must read IEA report, Part 1: Act now with clean energy or face 6°C warming. Cost is NOT high — media blows the story
- IEA report, Part 2: Climate Progress has the 450-ppm solution about right
- McKinsey 2008 Research in Review: Stabilizing at 450 ppm has a net cost near zero.
The authors are unhappy that “the green jobs literature almost completely dismisses nuclear power generation.” Of course, as I have argued at length, nuclear power has a far graver scale issues than most other low-carbon energy solutions — including the fact that it relies on a nonrenewable fuel (see “An introduction to nuclear power“).
I’m not sure there is much more to be said about this analysis, whose internal inconsistencies and general illogic are staggering.