Last Friday, Van Jones debated Andy Morriss, Law Professor at the University of Illinois in The Economist on the topic of green jobs. Surprisingly, Morriss says, there’s one thing we can all agree on:
Van Jones and I agree that ‘the private sector, not the government, can and must be the main driver in creating green jobs.’ We agree that government subsidies for coal, oil and nuclear power are a serious problem.
With the exceptions of their sentiments on corn-based ethanol and the need for innovation, the agreement stops there. Van Jones’ solution to the problem of existing subsidies is piling more on instead of peeling them back. Morriss refutes, “Far from leveling the playing field, these new subsidies dwarf the old ones: solar and wind receive subsidies of over $23/Mwh compared with the $0.44/Mwh for conventional coal and $0.25/Mwh for natural gas.”
Worse, even with massive subsidies wind and solar make up a very small fraction of America’s energy supply. It’s plausible for renewable energy sources to help meet America’s growing energy demands, but it should be done absent of taxpayer assistance.
Morriss goes on to give readers an important lesson in public choice and why once we go down the green jobs road, it will be very difficult to stop:
Special interests have the advantage because the benefits received are concentrated and valuable enough to make hiring lawyers and lobbyists to manipulate the legislative and regulatory processes worthwhile. The general public, on the other hand, loses too little on each subsidy to motive a lobbying trip to Washington. As I noted in my opening, we see this in Mr Jones’ field of alternative energy: the wasteful, environmentally damaging corn-based ethanol programme now deeply entrenched in our regulatory system is the result of the 1990s versions of the arguments for green energy Mr Jones makes now.”
Jones’ assertion that renewable energy creates more jobs and thus is good economic policy is a common claim made by advocates of green jobs legislation. He says, “There are simply more jobs per dollar and per kilowatt hour in producing clean energy and rebuilding for efficiency than there are in producing dirty energy and wasting energy.”
This logic supports Morriss’ argument than it does Jones’. It proves that clean energy sources are an inefficient use of human capital and these resources could be more useful in other sectors of the economy. NPR recently ran a piece called “The Jobs Of Yesteryear” which shows pictures and provides descriptions of obsolete occupations that disappeared because of improvements in efficiency and technology. Examples include an iceman and pinsetters at a bowling alley. If the goal were simply to create jobs we could rid the world of mechanical equipment and hire workers to dig our ditches. But the result would be a less prosperous United States and a lot of lost value creation which would ultimately destroy more jobs than it created. The same holds true for green jobs.
The stimulus money used to improve energy efficiency and weatherize buildings is failing to create the clean energy jobs the White House said it would – costing tens of thousands of taxpayer dollars per job created. Further, studies from the National Black Chamber of Commerce, The Brookings Institutite, the Energy Information Administration, the Congressional Budget Office, the Environmental Protection Agency, and The Heritage Foundation all agree that overall net effect of a cap and trade policy (aka: the ultimate green jobs plan) will be lost income, consumption and employment. The debate within these studies is the magnitude of the losses.
Van Jones said he shares “Mr Morriss’ preference for market-based solutions” but his entire arguments suggests quite the opposite.