by Dr. Roy Cordato
Senior Economist, Emeritas
Weekly John Locke Foundation research division newsletter focusing on environmental issues.
The newsletter highlights relevant analysis done by the JLF and other think tanks as well as items in the news.
1. N&O makes incredible claims about job creation from renewable subsidies
In an editorial (3/20/13), the Raleigh News and Observer claims that recently proposed legislation to dramatically curtail North Carolina’s renewable energy mandate will be a job killer. The only data that the editorial uses to back up its claim is from…well, it appears from the editorial that it is from a group called Environmental Entrepreneurs, but wherever it is from, it is quite massive. Here’s what the paper claims: "the number of solar energy-sector jobs increased by 21,160 while the general economy shed more than 100,000." This is quite amazing given that a recent study funded by the trade association representing the businesses that benefit from the state’s renewable energy subsidies, the North Carolina Sustainable Energy Association or NCSEA, claims that all the subsidies for all the sources of renewables have only created about 4200 distinct jobs, or what the industry hypes as 21,160 "job years created or retained." One would expect that this analysis, given its funding sources, would be a hyped exaggeration (I argue here that from an economics perspective it is actually quite meaningless.), but the number used by the N&O editorial writers is about 5 times the NCSEA’s claimed amount, and it applies to only one of the renewable industries — solar. If the N&O is going to base its argument on such a completely extreme number, it is incumbent upon them to clarify the source and give some sort of explanation of why it is so much larger than the number of jobs that even the main industry shills are claiming to have been created.
As an afterthought, there are two other questions I would ask the N&O. 1) Did they consider the possibility the renewable subsidies that have diverted resources from other sectors of the North Carolina economy might be part of the reason why the state has lost those 100,000 jobs? And 2) if these industries are doing so well and make so much economics sense, why do they need subsidies and mandates that force people to buy their product?
Also, take a look at John Hood’s discussion of these subsides.
2. "Because of the burning of fossil fuels we’re making the planet greener." — Matt Ridley
And, by the way, the use of renewable biofuels is thwarting this trend. If you are doubtful, watch this talk by Matt Ridley for Reason TV.
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