The Homa Files

Excerpted from the Wall Street Journal, “Does Green Energy Add 5 Million Jobs? Potent Pitch, but Numbers Are Squishy”, by Jeffery Ball, November 7, 2008

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Calls for a clean-energy system in the U.S. have long met with sticker shock. Now, the cost of making the transition–hundreds of billions of dollars–is being touted as a selling point.

Barack Obama and his energy advisers have been making the case that a multibillion-dollar government investment in everything from wind turbines to a “smart” electrical grid is just what’s needed to help revive the economy.

The lure is millions of government-subsidized “green jobs”, as Obama argued that spending $150 billion over the next decade to boost energy efficiency would help create five million jobs.

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The green-jobs argument rests on the notion that big capital investments in new-energy technology today will be more than offset by savings in reduced fossil-fuel costs.

The added allure of clean-energy spending as economic stimulus is that the industry is relatively young and growing fast. It is just starting to build its basic infrastructure — wind turbines, solar panels and a more-sophisticated electric-transmission grid. Several studies estimate that $1 invested in renewable energy or energy efficiency would yield up to four times as many jobs as $1 invested in oil and gas, whose basic infrastructure has been around for years.

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Critics say analyzing only new green jobs misses half the story.

“It’s not looking at the other side of the coin: You are spending more money for your energy,” says Anne Smith, a vice president at CRA International. The consulting firm wrote a report for the coal-mining industry in April that concluded that, under a bill to cap global-warming emissions, gains in green jobs would be “more than offset” by job losses elsewhere in the economy. That bill failed, but Obama has said he supports capping emissions.

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The job creation number cited by Obama has its roots in several green-jobs studies. Each projected different numbers, because each made different assumptions. Robert Pollin, a professor at the University of Massachusetts, Amherst, who co-wrote another study, questions the job target touted by the Obama campaign, saying it would cost much more. Pollin’s study said that $100 billion spent over two years could produce two million green jobs.

Even Mr. Pollin’s study assessed only the number of jobs that might be added if the government spent more money on clean energy. It didn’t count jobs that might be lost elsewhere in the economy if the country shifted to costlier sources of energy.

The Apollo Alliance, a San Francisco coalition of environmental and labor groups, also released a study in September. It concluded that five million green jobs could be had with an investment of $500 billion–more than three times Mr. Obama’s number.

Edit by DAF

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Full article:
http://online.wsj.com/article/SB122601449992806743.html

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