Study of the Effects on Employment of Public Aid to Renewable Energy Sources
Bottom Line: U.S. President Obama and other policymakers have cited Europe in general and Spain in particular as a model for how government support can advance renewable energy and create multitudes of “green jobs.” Yet, the subsidization efforts by government to pursue such a path actually destroy a variety of other jobs across the economy. The research here concludes that in Spain 2.2 jobs are lost for every 1 green job created by the government.
Europe’s current policy and strategy for supporting so-called “green jobs” and renewable energy dates back to 1997. The journey has now become one of the principal justifications for U.S. green jobs proposals. Yet, an examination of Europe’s experience reveals these policies to be terribly economically counterproductive.
In recent years, Spain provides a reference for the establishment of government aid to renewable energy. The arguments for Spain’s and Europe’s green jobs schemes are the same arguments now made in the U.S., principally that massive public support would produce large numbers of green jobs.
The question becomes: green jobs, but “at what price?”
The present analysis concludes that for every renewable energy job that Spain’s government manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created.
Importantly, these are 2.2 jobs lost that non-subsidized investments with the same resources would have created.
At minimum, therefore, this study’s evaluation of the Spanish model cited as one for the U.S. to replicate in quick pursuit of green jobs serves as a very serious note of caution.
Far from what has typically been presented, the reality then is that such green jobs promotion schemes also offer considerable negative employment consequences that must be further examined.
Read the full study here.
Spanish Jobs Lost per Installed MW of Capacity
Findings:
• The Spanish model cited as one for the U.S. to replicate in quick pursuit of “green jobs” serves a note of caution.
• From 2000-2007, Spain spent €571,138 to create each green job.
• On average, this created a net loss of 2.2 jobs for every 1 green job created.
• Worse, for new renewable power capacity, each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy.
Read the full study here.
