Last month Politico reported that the alternative energy sector had upped its lobbying efforts from $2.4 million in 1998 to $30 million in 2009. So what is the renewable power industry getting for its investment? Studies like this one by Navigant Consulting, Inc. for the Renewable Electricity Standard-Alliance for Jobs. The RES Alliance study found that “that a 25% by 2025 national RES would result in 274,000 more renewable energy jobs over no-national RES policy.”
Which is great news if you own a renewable electricity business. But what if you’re not? What if you manufacture widgets and you need inexpensive power to stay in business? The RES Alliance study tells you nothing about what happens to those jobs. It never even tries.
The reality is that Renewable Electricity Standards will cause energy prices to go up and that those higher energy prices will lead to job losses throughout the economy. Just ho many jobs will RES destroy on net? The Heritage Foundation’s Center for Data Analysis crunched the numbers and found that an RES would reduce employment by more than 1,000,000 jobs.
The idea that forcing Americans to pay artificially high energy prices thanks to renewable electricity standards is a classic example Frederic Bastiat broken window fallacy. In 1850 Bastiat wrote:
Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? … Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
