Gov. Jennifer Granholm has been drinking the “green jobs” Kool-aid,
recently announcing that she is creating an energy department and
naming an energy czar to pursue “alternative” energy and “create
thousands of jobs.” Yet in these times of economic distress, the
governor’s priorities are misplaced.
protection comes at a price—after all, someone has to pay to keep air
and water clean. However, politicians like Granholm claim that clever
government policies can result in environmental protections that
simultaneously grow the economy.
If something sounds too
good to be true, it is. Environmental protection still comes at a
price, and Granholm’s green jobs initiative threatens Michigan’s ailing
The governor claims that “progressive policies
that encourage renewable energy development” would boost Michigan’s
green economy. And she’s partly right: Regulations that force green
energy on consumers and producers would boost business for politically
favored alternative energy companies, such as manufacturers of wind
turbines and solar panels. Increased demand, in turn, would create jobs
at these green companies.
But at the same time, businesses
that supply or use large amounts of conventional energy—such as
traditional manufacturers—would face decreased demand for their
products and would therefore lose employees. Indeed, more jobs would be
lost at these firms than would be “created” at the environmentally
correct ones. Granholm’s “progressive” energy policy might create a net
gain for Michigan’s green economic sector, but it would create a net
loss for the economy.
Granholm promises that Michigan will
“celebrate job announcements,” if it “continues to provide workers with
the training they need” in environmentally friendly services. Again,
she is partly right: Government can create green jobs by spending
taxpayer money on training people to install light bulbs and solar
panels so that consumers can meet energy efficiency regulations.
the governor really wants is for the state government to pick winners
and losers in Michigan’s energy market. This will not yield efficient
outcomes. Taxpayer money spent on creating “green jobs” comes out of
the market economy, which otherwise would have allocated those
resources more efficiently to produce goods and services that consumers
actually want. Government pushing “green” goods and services on
consumers carries a direct cost, which can be measured in taxpayer
dollars, as well as an indirect cost, in forgone economic productivity.
Finally, Granholm argues that Michigan must “expand the
funding available for research and development” in environmentally
friendly energy technologies in order to capitalize on the green
Again, she is mistaken, because
government has never been good at choosing the most promising emerging
technologies. 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, like hydrogen fuel
cells and synfuels.
Rather than produce a clean energy
technology breakthrough, Granholm’s clean energy initiative is more
likely to become a pork barrel fund for Michigan legislators to have at
their disposal to reward constituent schools and companies.
Yeatman is an energy policy analyst at the Competitive Enterprise
Institute, a free-market research center in Washington, D.C.