Doubts have been raised by a western U.S. business organization about the Obama administration’s green jobs goals based on the results of a Spanish university economist’s study that contends Spain’s government-subsidized program has destroyed 2.2 jobs for every new green job created. The Western Business Roundtable said this should cause the Obama administration to think twice about citing Spain as a “model” for what the United States should do.
Released in March, the “Study of the Effects on Employment of Public Aid to Renewable Energy Sources” by Professor Gabriel Calzada, an economist at Juan Carlos University in Madrid, said that “at minimum” the research results serve as “a note of caution” to U.S. policymakers that “the reality is far from what has typically been presented” and that such programs as Spain has provided have had far-ranging negative impacts on other employment and economic development.
The push from the Obama administration has been to create up to 5 million jobs in the alternative energy sector (renewables and energy efficiency) as a means of stimulating the economy nationally and globally. But Calzada’s study contends there is a price to pay overall, and it could be the destruction of more nongovernment-subsidized jobs that otherwise would be created through private investment.
The business roundtable, which serves as a lobbying group for CEOs and other senior executives cutting across numerous industries, cited the Spanish study’s calculation that since 2000, Spain spent about $774,000 to create each green job, including subsidies of more than $1.3 million per wind industry job. This resulted in the destruction of 113,000 jobs elsewhere in the economy, or 2.2 jobs destroyed for every new green job created, according to Jim Sims, a former U.S. congressional staffer in the energy/environmental area who heads the Colorado-based business organization.
“Spain’s experience (cited by President Obama as a model) reveals with high confidence, by two different methods, that the United States should expect a loss of at least 2.2 jobs on average, or about nine jobs lost for every four created, to which we have to add those jobs that nonsubsidized investments with the same resources would have created,” the report said.
Calzada said Obama is correct in citing Spain as the global leader in government-subsidized alternative energy-sector jobs, mostly related to the construction and production of electricity. And Spain and the rest of Europe uses the argument of economic stimulus as the reason for pushing the green job development. However, the report purports to answer the question of “At what price?”
“This study’s results demonstrate how such ‘green jobs’ policy clearly hinders Spain’s way out of the current economic crisis, even while U.S. politicians insist that rushing into such a scheme will ease their own emergence for the turmoil,” Calzada said.
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