1 green job created = two private jobs lost

February 26, 2010

In this morning’s Washington Post, Suni Sharan, director of the Smart Grid Initiative at GE from 2008 to 2009, questions the validity of “the assumption that a ‘clean-energy’ economy will generate enough jobs to mitigate today’s high level of unemployment.”

And yet, as he writes, “‘green jobs’ have become a central underpinning of the Obama administration’s rationale to promote clean energy.” He explains that “the near-term expected levels of investment in and adoption of renewable sources of energy mean that net job creation should top out in the tens of thousands, as opposed to the desired hundreds of thousands or more.”

Sharan concludes that “for the purpose of creating jobs, then, a ‘clean-energy economy’ will not offer a panacea” and that “those who take great pains to tout the ‘job-creation potential’ of the green space might just end up inducing labor pains all around.”

He is onto something. However, the reality is much worse. As we know, President Obama has spent much time praising Spain as being a reference for the establishment of government aid to renewable energy. A role model, Spain?

This study, from the Universidad Rey Juan Carlos in Spain shows that the reality is quite different. After examining Spain’s experience with an aggressive wind-power program, the researchers concluded, among other things, the cost of creating a green job in Spain was 571,000 Euros each (so roughly $800,000) and for each green job created 2 private jobs were lost.

The study also makes predictions in case the president pursues his green job policy.

“Therefore, while it is not possible to directly translate Spain’s experience with exactitude to claim that the U.S. could lose at least 6.6 million to 11 million jobs, as a direct consequence were it to actually create 3 to 5 million “green jobs” as promised (in addition to the jobs lost due to the opportunity cost of private capital employed in renewable energy), the study clearly reveals a tendency that means the U.S. should expect such an outcome.”