It is said that there is a scientific consensus on global warming. There isn’t, but there is an economic consensus that policies based on global warming alarmism hurt the economy by making energy more expensive. This inconvenient truth makes it unlikely that American voters would go along with climate policies, so politicians in the White House and Congress are now pitching a policy known as “green jobs,” a slick marketing campaign designed to mask the true costs of the climate policies they advocate. Don’t believe the hype. Green jobs are a sham, just like climate alarmism.
Consider President Obama’s marquee climate strategy, a cap-and-trade scheme that he says would transform America’s economy. The President’s cap-and-trade works by raising the price of hydrocarbon energy sources—coal, oil, and natural gas—in order to make alternative energy sources—wind, solar, and biofuels—more attractive to investors.
To be sure, a cap-and-trade scheme would increase demand for alternative energy, thereby creating jobs in businesses that manufacture solar panels
and wind turbines. But those gains would come at the expense of industrial
suppliers and users of energy, which would pass along higher production costs
to consumers. Demand would plummet, markets would contract and those businesses
would have to shed jobs.
This trade-off is known among economists as the “broken
window fallacy.” At first glance, smashing a window might seem as though it
adds to the economy, because it employs a window repairman. Yet the owner of
the window must pay for the damage, which means he has fewer resources to pay
for other things, whether hiring an assistant or buying a new suit. In the end,
the window smasher makes everyone worse off.
But that’s not all. Not only does cap-and-trade yield no net
gain to the economy, but when you factor in efficiency losses due to higher
energy costs, job losses almost certainly exceed job gains.
This is no secret to the Obama administration. Last April,
Peter R. Orszag, who now serves as the president’s top budget expert, told
Congress, “The higher prices that would result from a cap on CO2 emissions
would reduce demand for energy and energy-intensive goods and services and thus
create losses … for workers in the sectors of the economy that supply such
products.” This is from a man who has the president’s ear.
Obama also wants to spend billions in taxpayer money to
subsidize green industries to create green jobs. Yet this would benefit the
economy only insofar as these investments are a productive use of capital.
Indeed, taxpayer money spent on green jobs comes out of the market economy,
which otherwise would have allocated those resources more efficiently to
produce goods and services consumers actually want.
The government’s track record in energy investment does not
inspire confidence that these resources would be used wisely. Government is run
by bureaucrats and regulators, not venture capitalists. That’s why the federal
government has wasted so much money in the past on failed energy initiatives
such as hydrogen fuel cells and synfuels.
Rather than produce a technological breakthrough, Obama’s
clean-energy subsidies are more likely to become a pork-barrel fund for
legislators to reward constituent companies and universities. Is it any wonder
that, according to a recent article in Politico, there are now four climate
lobbyists for every member of Congress? The green energy trough promises
billions of dollars, and everyone wants a piece of the action.
As for those millions of “green” jobs, the only jobs
government can create are those for bureaucrats and regulators. Under Obama’s
cap-and trade scheme, the government would
have to grow significantly to monitor and control billions
of tons of greenhouse gas emissions from thousands of businesses across
America. According to the Institute for Energy Research, the government would
need 600,000 new employees to administer Obama’s climate policies.
And for what? It takes only one person to read a
thermometer. Global temperatures have not increased in almost a decade, despite
a steady increase in global greenhouse gas emissions. In his documentary, “An
Inconvenient Truth,” Al Gore claims, “There is one relationship that is more
powerful than all the others and it is this: When there is more carbon dioxide,
the temperature gets warmer.” Well, emissions have gone up, yet temperatures
have stayed the same. Where’s the warming?
Many powerful politicians are promoting policies to fight
climate change as an economic opportunity to create millions of so-called green
jobs. President Obama made green jobs an important component of his plan to
stimulate the American economy. United Nations General Secretary Ban Ki-moon
says that they are the key to a global economic recovery.
In fact, policies to address the supposed threat of global
warming hurt the economy by creating more pink slips than green jobs. In short,
they are all pain for no gain.