So should we dismiss this study as fraudulent because the author, a professor of economics at a Spanish university, is a libertarian and risk sending our already battered economy into a period of higher deficits and higher unemployment or should we wait until there are further studies to determine how many jobs will be lost by converting to green technology alongside Obama's promises of how many will be created?
We should dismiss this story because if you actually read the study, you will find that the author does not actually define which jobs were "lost" due to the green industry, or why.
Here is the general description of jobs that were supposedly "lost", directly from the study:
In fact, if you look at the charts and data presented, you find that the study ended in 2008, a year where millions of jobs were lost generally worldwide.
In addition, the study blames green technology for rising energy costs, which it blames for job losses.
In fact energy costs rose world-wide during the period described at a dramatic rate, which would explain the rise in cost of energy in general.
In fact, is you look at the relative costs of wind power, for instance, over time, (On page 20 of the study) you will find that the rise in cost from 2000 to 2008 (6 euros per kilowatt to 10 euros per kilowatt) is a much
slower rise in cost than power from other sources.
Oil rose in cost from a low of about $25.00 in 2000 to a high of 135.00 in 2008.
So, wind power costs rose by 60%, but during the same period oil power rose by over 400%.
The study itself points to rising energy costs as a "job killer" supposedly responsible for many of the job losses. There's a link in the Reuter's story that leads to the actual study:
Link
This is just from me reading the actual data, by the way, rather than relying on someone else's opinion...
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.
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. 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, 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.
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.
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.
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.
