- Banned
- #41
Since you read the study instead of just relying on some one else's opinion of it, you understand that your quote doesn't actually come from the study but is widely claimed in articles about the study. The actual quote from the study is:
Principally, the high cost of electricity affects costs of production and
employment levels in metallurgy, non-metallic mining and food processing,
beverage and tobacco industries.
Page 8, numbered point 9:
"Principally, the high cost of electricity affects costs of production and
employment levels in metallurgy, non-metallic mining and food processing,
beverage and tobacco industries."
http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf
But since you read the study instead of relying on some one else's opinion about it, you understand that the high cost of electricity is not relevant to the study's calculation that for every green job created 2.2 other jobs were destroyed.
Also from the study, page 9, point 16:
"The high cost of electricity due to the green job policy tends to drive the
relatively most electricity-intensive companies and industries away, seeking
areas where costs are lower. The example of Acerinox is just such a case."
Since the cost of electricity was significantly LOWER than in countries from green sources than from oil or other sources, as I pointed out, this statement is patently false.
Using government statistics, the study compares the amount of investment necessary to create a green job with the amount of investment needed to create, on average, a job in the rest of the economy and it found that the investment needed to create one green job would have created 2.2 jobs if it had been otherwise invested in the economy. Essentially the study argues that the opportunity cost of creating one green job is 2.2 other jobs.
I understand that economic conditions at any particular time may mean the number could be higher or lower than 2.2
Conditions which the study failed to take into account, at all. Conveniently.
but the fact that it costs more than twice as much, according to Spanish government figures, to create one green job as to create one job in the rest of the economy, it seems likely that a rapid, large scale conversion to green energy such as Spain has had will produce a net loss of jobs for the economy.
Initial investments in new fields of industry tend to be expensive. That is the nature of R&D, and the nature of setting up new industries, period. Costs become cheaper as the field expands.
The study argues that exactly where in the economy these jobs will be lost will depend on how the enormous cost of the green conversion is paid for. This would have to be done by some combination of raising electricity rates, raising taxes or continuing to pay interest on the accumulating debt.
Except, again, the electiricty rates listed in the study did not rise as fast as electricity rates from oil.
The person who wrote the study seems to be intentionally ignorant of external factors.
I wonder why that might be?
According to
the National Energy Commission, the price of a comprehensive energy rate (paid by
the end consumer) in Spain would have to be increased 31% to begin to repay the
historic debt generated by this deficit.
And, if they kept relying on other forms of energy, prices would have risen 400%, with the price of oil, during the same period.
This would mean the bulk of the jobs lost would be in the most energy intensive industries. If taxes were raised consumption and investment would be reduced throughout the economy and jobs would be lost throughout the economy. Continuing deficits and a growing debt, of course, will eventually mean either higher taxes of fewer services to pay for the interest and may cause some private sector businesses to pay higher interest rates, so in this case, too, jobs would be lost throughout the economy.
The study also warns that Spain's forced conversion to green energy is producing a bubble that may eventually lead to a period of higher unemployment and perhaps a recession when the goal of producing 20% of Spain's electricity through green energy is reached and all the jobs involved in manufacturing and building the capacity to produce green energy are lost.
Of course, there's no reason to think the US experience would be exactly like Spain's, but on the other hand, there's no reason to think it would be entirely different, so imo, it would be prudent to demand a detailed economic analysis of the costs and benefits we might see from a rapid, large scale government subsidized conversion to green energy such as Obama seems to want before going ahead with it.
In summary, the author of the study seems to ignore the effect of external forces on the Spanish Economy, and does not compare the rise and fall of the economy with relative rises and falls in the rest of the world's economies.
And since there were radical swings in most world economies during this period, this is a fatal error in the methodology of the study.