Part of President Obama’s platform to jumpstart the country’s lagging economy is the creation of “green” jobs through renewable energy initiatives, citing Spain as an early leader in these endeavors. Now a study by an economics professor in Madrid reports that every renewable job created by the Spanish government destroyed an average of 2.2 other jobs. Each “green” megawatt installed in Spain destroyed 5.39 jobs in non-energy sectors, the study found.
While conservative bloggers ran with the information saying the green energy push will end up costing millions of jobs in the United States, others like the Wall Street Journal’s Environmental Capital blog question the objectivity of the study’s author and say the study is fuzzy on which jobs were actually wiped out in Spain – click here to read the WSJ’s environmental capital blog.
Released in March 2009, the study found that only one in 10 jobs created in Spain were of a permanent nature, with two-thirds consisting of temporary jobs in construction, fabrication and installation jobs; one-quarter were positions in administration, marketing and projects engineering; and only one of 10 was related to more permanent operations and maintenance of renewable power systems.
The study predicted, “If U.S. subsidies to renewable producers achieve the same result, the U.S. could lose 6.6 million to 11 million jobs while it creates 3 million largely temporary ‘green jobs.'”
The research director for the “Study of the effects on employment of public aid to renewable energy sources” was Professor Gabriel Calzada. In addition to his position at Juan Carlos University, he is the founder and president of the Fundacion Juan de Mariana, a libertarian think tank founded in 2005. He’s also a fellow of the Center for New Europe, a Brussels-based libertarian think thank that “in recent years apparently accepted funding from Exxon Mobil,” according to WSJ.
Calzada wrote in the study’s executive summary, “The arguments for Spain’s and Europe’s ‘green jobs’ schemes are the same arguments now made in the U.S., principally that massive public support would produce large numbers of green jobs. The question that this paper answers is ‘at what price?'”
The study calculated that, since 2000, Spain spent EUR 571,138 (USD $774,000) to create each “green job,” including subsidies of more than EUR 1 million (USD $1.3 million) for each wind industry job. Calzada wrote, “Creating those jobs resulted in the destruction of nearly 113,000 jobs elsewhere in the economy, or 2.2 jobs destroyed for every ‘green job’ created.”
He added, “Spain’s experience reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.”
WSJ’s Environmental Capital blog noted, “But the study doesn’t actually identify those jobs allegedly destroyed by renewable-energy spending. What the study actually says is that government spending on renewable energy is less than half as efficient at job creation as private-sector spending. Specifically, each green job required on average 571,000 euros, compared with 259,000 euros in ‘average capital per worker’ in the rest of the economy.”
The study said, “The money spent by the government cannot, once committed to ‘green jobs,’ be consumed or invested by private parties and therefore the jobs that would depend on such consumption and investment will disappear or not be created,”
While WSJ said that made sense on paper, it countered that it still didn’t explain how it translated into outright job destruction. It noted that Spain’s support for renewable energy came out of existing tax revenues — there were no special levies on corporate activity designed to underwrite clean energy.
“The money the government has spent on clean energy may have edged out other government spending, but it’s hard to see how it could have edged out private-sector spending, especially when the Socialist government there has reduced corporate income-tax rates, most recently this past January,” WSJ added.