The Liberal Big Green Bubble

Amy Oliver
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Posted: Oct 09, 2011 12:01 AM

By Amy Oliver Cooke and Michael Sandoval

Former Colorado Governor Bill Ritter boasted that Colorado is at the “epicenter of America’s New Energy Economy” and that it would be a “lasting legacy” to our children and all future generations.

This past spring, Ritter, now paid $300,000 to direct Colorado State University’s Center for the New Energy Economy, took to the stage in a national debate to defend the motion, “Clean energy can drive America’s economic recovery.” He bragged about the 57 pieces of legislation he signed to create the “New Energy Economy,” but that wasn’t enough to convince the audience.

Another green zealot State Representative Max Tyler also claimed clean energy to be an economic panacea. In a March 2010 Denver Post guest editorial Tyler wrote that his bill (HB10-1001) to increase Colorado’s renewable energy standard (RES) for investor owned utilities such as Xcel Energy from 20 to 30 percent within the next decade would “create thousands, perhaps tens of thousands, of jobs in the New Energy Economy” without “increasing energy costs.”

He also wrote that the higher RES would “stabilize or even lower” energy costs and “help us continue to balance our state budget”

Both men are wrong.

Energy rates continue to climb. Xcel customers have endured a 21 percent rate increase over the last six years with another 20 predicted over the next six, thus reducing consumers’ purchasing power. Continuing the trend of budget shortfall, the Center on Budget and Policy Priorities projects Colorado’s 2012 budget shortfall to be $450 million, 6.2 percent of the state’s general fund.

And the jobs?  They never materialized. Colorado’s unemployment rate has hovered between 8.3 and 9.3 percent sometimes above and sometimes below the national average.  Of course, if we spend millions of dollars on any one sector of the economy, some jobs will be created, but at a cost that diverts capital resources away from other possibly more productive sectors.

According to a 2009 study from Stanford University Energy Modeling Forum, “analysis…concludes that the advantages of increased jobs from renewable energy are vastly over-stated at costs prevailing today. It will require dramatic break-through in costs if renewable energy is to become a job generator.”

The study concludes with this resounding rebuke of “green job” creation policies:

“Green power, however, does not appear to be a game changer on the job front. When job creation is compared to the cost of each power source option, green jobs are sometimes more and sometimes less than conventional energy jobs. More importantly, strategies that subsidize these investments will be shifting the country’s scarce resources from sectors that would create more jobs (as well as economic value). This conclusion applies even for an economy in a deep recession and where policy wants to stimulate employment.”

The Colorado Department of Labor and Employment (CDLE) recently discovered this to be true as well despite Tyler’s and Ritter’s best efforts.

An interim report from July 2011 details CDLE’s attempt to quantify “green” jobs. Their estimates—based on methods they freely admit are “highly dependent” on subjective measures, prone to self-selection bias, and a “broad definition of what constitutes a green job”—yielded just 61,239 results, or just 2.8 percent of the workforce.

A similar July study by Brookings Institution put Colorado at 2.2 percent, or roughly 51,000 jobs, 20th in the country.

Of those green jobs identified in the survey results, “most,” according to CDLE, actually “pre-date the green economy.” The survey provides no relevant data for this claim, but introduces doubt as to the nature of any perceived growth (relative to other survey results). Why? Preexisting jobs repurposed for the green economy are not job “creations.” A single job in the utility industry having been transformed into a green job—say coal to wind—is still a single job, as no net job increase has occurred in the overall job market.

Brookings’ national estimate of 2.7 “clean economy” jobs, for example, counts more than 350,000 public mass transit and 380,000 waste management jobs, most pre-existing the advent of a “green economy.”

These differing methodologies and definitions of green jobs in the surveys studied have not yielded a clear picture of when the green economy began, what the number of existing green jobs are, how much growth has occurred over time, and, most importantly, any unintended externalities of the green job growth.

A 2007 Pew study stretching all the way back to 1998 concluded that there were 17,000 clean energy jobs in the state at the time, an increase of approximately 2,700 jobs in nine years. Brookings, measuring from 2003-2010, estimated 16,250 jobs were added over seven years, an annual average of 5.6 percent.

The CDLE survey isn’t helpful here either. As a point-in-time survey, the results “cannot be interpreted to determine any relative growth or decline in the number or quality of jobs in Colorado over a period of time.”

But compared to a 2007 American Solar Energy Society estimate commissioned by the Governor's Energy Office (along with Xcel Energy and Red Rocks Community College) that claimed more than 91,000 green jobs, the CDLE report actually would indicate a loss of 30,000 jobs, for a four-year decline of 30 percent, or an annual job loss of 9.2 percent.

That’s not good news for Ritter, who came into office in 2007 and exited earlier this year.

Colorado isn’t the only state suffering a green industry malaise. The jobs haven’t materialized anywhere on the scale promised in recent years. Already three years into his 10-year plan for 5 million new “green collar” jobs, Obama would need to add hundreds of thousands of jobs per year in this sector alone to reach his goal.

The CDLE reported statistics consistent with other states that had completed green jobs reports in 2009. Oregon and Michigan both showed 3 percent each, Washington clocked in at 3.3 percent, and Kansas bottomed out with 1.5 percent of the total workforce classified as “green.” Missouri fared slightly better, boasting a green jobs total of 4.8 percent.

For comparison, the survey cited a Pew research study, also conducted in 2009, whose findings showed approximately 770,000 green jobs (clean energy and green economy) nationwide.

Even the more generous “green goods and services” definition provided by the Bureau of Labor and Statistics could only muster 2.15 million green jobs. With the total number of jobs in the U.S. economy standing at roughly 139 million, that’s a paltry 1.5 percent. Brookings’ pegged the total slightly higher, at 2 percent.

Even small, state-subsidized growth in the green jobs sector has been tempered by expensive taxpayer-footed failure elsewhere. One of the president’s most highly touted projects, California-based Solyndra, a solar-panel manufacturer, terminated 1,100 employees despite a $535 million loan guarantee from the Department of Energy. The company is now the center of a political firestorm focusing on “sweetheart” financing for political cronies, an FBI raid, Congressional hearings, the examination of the entire solar industry’s economic viability, and the nature of the DOE loan program itself.

Another high-profile failure—Evergreen Solar—received $58 million in state subsidies from the state of Massachusetts in 2007, but laid-off 800 workers in March 2011 and filed for bankruptcy just last month.

These aren’t merely companies that went out of business as part of a competitive marketplace. Their government-issued subsidies were not enough to prop up potentially questionable “investments” of taxpayers’ money in firms that might not fit the definition of a going concern. As Hot Air’s Ed Morrissey said, “government doesn’t pick winners and losers.  They pick losers in order to create the perception that they are competitive with the winners.”

It’s one thing for venture capitalists to risk their own treasure, it’s another for governments to dole out millions in subsidies on risky ventures simply to artificially raise employment growth in ideologically desirable sectors.

Other solar technology manufacturers that received tens of millions in taxpayer subsidies have closed up shop or moved to China. Most recently, Colorado-based Advanced Energy laid off 5 percent of its work force and moved part of its production to China in order to be more profitable.

Congress, which has been doling out taxpayer money for job creation in the green industry, can’t define what constitutes a green job.  In testimony in the House Committee on Oversight and Government Reform, Chairman Rep. Darrell Issa (R-CA) recently questioned Dr. Keith Hall, Commissioner of the Bureau of Labor Statistics of the U.S. Department of Labor, on what counts as a “green job.” One example was a bus driver (see that Brookings report mentioned earlier).  Hall acknowledged that any job in mass transit is considered a “green job.” So a bus driver in 2008 was just a bus driver. In 2011, that same bus driver is now a green job even though no new net job was actually created.

Actual green job creation—not just job transformation—has cost the taxpayers plenty. In Seattle, a $20 million “Weatherize Every Building” program promised 2,000 jobs, delivering just 14. That’s $1.4 million per job.

Ironically, in a piece by Investor’s Business Daily, the very federal regulations supported by labor unions and green activists (such as the Davis-Bacon and National Environmental Policy acts), have stalled any green jobs surge, according to the DOE.

As The New York Times concluded on August 18, 2011, “Federal and state efforts to stimulate creation of green jobs have largely failed, government records show.”

It appears we can add one more government record—the CDLE green jobs report—to that pile. If Colorado is the “epicenter” then the rest of America should run away fast from anyone trumpeting the New Energy Economy.

Amy Oliver Cooke is the founder of Mothers Against Debt (www. Mothersagainstdebt.com). She is also the director of the Colorado Transparency Project for the Independence Institute and writes on energy policy.  She can be reached at amy@i2i.org. Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.


 

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