The Heritage Foundation recently sponsored a forum on the idea that new corporate subsidies to produce energy from non-carbon based fuels–wind and solar–will help us out of the recession by creating “green jobs.” The panel featured three economists, Gabriel Calzada, King Juan Carlos University, Spain; Robert Murphy, The Institute for Energy Research; and William T. Bogart Professor of Economics, York College (PA).
None of the three argued that these subsidies would not create jobs in the industries targeted by the subsidies. That’s a no-brainer. Jobs could be created in any industry, including pyramid building, if the government decided to heavily subsidize it. They also all agreed that the real question, typically ignored by the eco-Keynesians proposing this shell game, is how many jobs would be destroyed in the process. Since the government cannot put anything into the economy that it does not first take out of that same economy there is no reason to believe that net new jobs would be created. In fact, since there is certainly going to be a loss in efficiency in reshuffling the deck, a net loss of jobs should be expected.
As Gabriel Calzada pointed out in his presentation, Spain, which the advocates for a new eco-industrial complex point to as the model of how to create green jobs, is losing over twice as many jobs as it’s creating with its subsidies. Calzada wonders why in the world the US, with just under a 9 percent unemployment rate, would be looking to Spain with over an 18 percent unemployment rate as a model for how to create jobs.
Anyway, the Heritage program is definitely worth watching.
