Obama’s green jobs bust

Last week’s underwhelming jobs report prompted the Obama administration to caution that one should “not read too much” into such numbers. One can sympathize with the administration’s statistical agnosticism. After all, with a record that includes 41 straight months of 8 percent or worse unemployment, Obama can’t credibly claim to have done much to spur job growth. Nowhere is that failure more resounding than with his signature job-creation program — so-called “green jobs.”

After touting green jobs as the wave of the future, the president and his Congressional allies made sure that the $800 billion stimulus package set aside $70 billion for green-energy projects. Now the results are in, and Obama’s green jobs bet has been a bust. Estimates from the National Renewable Energy Laboratory, an adjunct of the Department of Energy, show that of the nearly $9 billion that has so far been spent on green jobs, the government created just 910 new, long-term jobs. For those keeping count, that works out to a cost to taxpayers of $9.8 million per job. So dismal is the return on this investment that the Obama administration has taken to reclassifying jobs only tenuously associated with green projects — everything from construction jobs used to install infrastructure for wind and solar operations to janitors who clean those facilities — as “green jobs.”

As if Obama’s record on domestic job creation wasn’t sufficiently damning, much of the funding allocated for green jobs has gone abroad. American University’s Investigative Reporting Workshop points out that of the first $2 billion spent on renewable energy projects like wind energy companies, as much as 80 percent flowed overseas to places like China. By far the largest payment went to a bankrupt Australian company that used Japanese-made turbines to build a wind farm in Texas. The government spent yet another $20 million to “help clean energy projects in Africa get started.” Obama’s campaign likes to mock Mitt Romney as an “outsourcer-in-chief,” but its green jobs scheme seems to be primarily effective in transferring American money into foreign projects. Democratic Senator Chuck Schumer — hardly an anti-Obama partisan — aptly sums up the administration’s dubious achievement: “Very few jobs here, lots of jobs in China.”

Considering the abject and expensive failure of green jobs, one might well wonder how this pet cause of the environmental left became national policy. As we show in our new book, The New Leviathan, it is certainly not because the economic arguments for green jobs are so compelling. Despite the promise attributed to green jobs by Obama, they have a mythic basis, namely that government can “create” jobs using regulatory fiat by subsidizing innovations — in this case non-fossil-fuel energy and energy-efficient technologies — for which there is not yet sufficient demand in the free market. The paucity of demand can be explained by the fact that green energy sources remain far less efficient and far more expensive than fossil fuels.

Green jobs are also economically counterproductive, destroying jobs in the private sector. This is because in order to make the green energy industry competitive, government must subsidize it and tax consumers and businesses to do so — just as it did with the economic stimulus. But in favoring green industries, government diverts labor, capital, and materials from economically efficient and productive industries. The experience of European countries with green jobs is instructive. Spain’s subsidies of renewable energy have led to the destruction of two private-sector jobs for every “green job” the government creates. In Italy, green jobs were so expensive that for every green job created, five to seven were lost in the general economy. America’s experiment with green jobs is turning out to be similarly disappointing.