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The False Promise of Green Jobs
COPENHAGEN "“ Political rhetoric has shifted away from the need to respond to the "generational challenge" of climate change. Investment in alternative energy technologies like solar and wind is no longer peddled on environmental grounds. Instead, we are being told of the purported economic payoffs, above all, the promise of so-called "green jobs." Unfortunately, that does not measure up to economic reality.
The Copenhagen Consensus Center asked Gürcan Gülen, a senior energy economist at the Center for Energy Economics, Bureau of Economic Geology at the University of Texas at Austin, to assess the "state of the science" in defining, measuring, and predicting the creation of green jobs. Gülen concluded that job creation "cannot be defended as another benefit" of well-meaning green policies. In fact, the number of jobs that these policies create is likely to be offset "“ or worse "“ by the number of jobs that they destroy.
On the face of it, green-job creation seems straightforward. Deploying more wind turbines and solar panels creates a need for more builders, technicians, tradespeople, and specialist employees. Voilà: simply by investing in green policies, we have not only helped the climate, but also lowered unemployment. Indeed, this is the essence of many studies that politicians are eagerly citing. So what did those analyses get wrong?
In some cases, Gülen finds that proponents of green jobs have not distinguished between construction jobs (building the wind turbines), which are temporary, and longer-term operational jobs (keeping the wind turbines going), which are more permanent. Moreover, sometimes advocates have assumed, without justification, that the new jobs would pay more than careers in conventional energy.
In other cases, the definition of a "green" job is so fuzzy that it becomes virtually useless. If a sustainability adviser quits a concrete factory and goes to work instead for a renewable energy project, can we really conclude that the number of green jobs has actually increased?
More disturbing is Gülen's finding that some claims of job creation have rested on assumptions of green-energy production that go far beyond reputable estimates. Of course, if you assume that vast swaths of the countryside will be covered in wind turbines and solar panels, you will inevitably predict that a large number of construction jobs will be required.
But the biggest problem in these analyses is that they often fail to recognize the higher costs or job losses that these policies will cause. Alternative energy sources such as solar and wind create significantly more expensive fuel and electricity than traditional energy sources. Increasing the cost of electricity and fuel will hurt productivity, reduce overall employment, and cut the amount of disposable income that people have. Yet many studies used by advocates of green jobs have not addressed these costs at all "“ overlooking both the cost of investment and the price hikes to be faced by end users.
The companies calling for political intervention to create green jobs tend to be those that stand to gain from subsidies and tariffs. But, because these policies increase the cost of fuel and electricity, they imply layoffs elsewhere, across many different economic sectors.
Once these effects are taken into account, the purported increase in jobs is typically wiped out, and some economic models show lower overall employment. Despite a significant outlay, government efforts to create green jobs could end up resulting in net job losses.
Even if that is true, proponents might argue, investment in green jobs is nonetheless a good way to stimulate a sluggish economy. But Gülen shows that there are many other economic sectors, such as healthcare, that could actually create more jobs for the same amount of government investment.
In addition to job creation, some researchers have blithely claimed that all sorts of other economic benefits will accrue from investment in alternative energy, including increased productivity, higher disposable incomes, and lower operating costs for businesses. Here, too, Gülen concludes that the assertions are "not backed up by any evidence and are inconsistent with the realities of green technologies and energy markets."
The fundamental problem is that green-energy technologies are still very inefficient and expensive compared to fossil fuels. Deploying less efficient, more expensive alternative-energy sources will hurt businesses and consumers, not help them.
In order for the whole planet to make a sustainable shift away from fossil fuels, we need to make low-carbon energy both cheaper and more efficient. That requires a substantial increase in research and development into next-generation green-energy alternatives. Today's research budgets are tiny, and that desperately needs to change.
In the meantime, the public should be cautious of politicians' claims that deploying today's inefficient, expensive technology will result in windfall benefits at no cost.
Bjørn Lomborg is the author of The Skeptical Environmentalist and Cool It, director of the Copenhagen Consensus Center, and adjunct professor at Copenhagen Business School.
Copyright: Project Syndicate, 2011. www.project-syndicate.org For a podcast of this commentary in English, please use this link:http://media.blubrry.com/ps/media.libsyn.com/media/ps/lomborg69.mp3
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Username Password New registration Forgotten password BartekBartek 04:00 10 Feb 11Only some isolated points of critique:
the only reason why other energy sources are still cheaper than wind, solar and so on, is that we don't account for the external costs they cause (global warming, health issues, dependence of fossil fuel imports, supporting unjust regimes in oil extracting countries are only a few of them);green energies of their own don't solve the problem - with increased efficiency of energy use the problems with productivity loss would not be as bad, if still existent at all;Mr Lomborg's standard argument: "Even if that is true, proponents might argue, investment in green jobs is nonetheless a good way to stimulate a sluggish economy. But Gülen shows that there are many other economic sectors, such as healthcare, that could actually create more jobs for the same amount of government investment." - who said that we cannot do both? You cannot always choose the best possibility to invest money (at least in macro scale) and put all the money there. BartekBartek 04:01 10 Feb 11Only some isolated points of critique:
the only reason why other energy sources are still cheaper than wind, solar and so on, is that we don't account for the external costs they cause (global warming, health issues, dependence of fossil fuel imports, supporting unjust regimes in oil extracting countries are only a few of them);green energies of their own don't solve the problem - with increased efficiency of energy use the problems with productivity loss would not be as bad, if still existent at all;Mr Lomborg's standard argument: "Even if that is true, proponents might argue, investment in green jobs is nonetheless a good way to stimulate a sluggish economy. But Gülen shows that there are many other economic sectors, such as healthcare, that could actually create more jobs for the same amount of government investment." - who said that we cannot do both? You cannot always choose the best possibility to invest money (at least in macro scale) and put all the money there. AGK 04:10 10 Feb 11What are you suggesting? To continue subsidize coal and petrol? Or even more useless and expensive CO2 storage? I believe they are perfectly positioned for siphoning more cash. The very purpose of subsidizing the new tech is to make it cheaper and more efficient, to move it no next phase of development when it will become affordable for more and more people. Wind is for offshore, solar+hydrogen storage is for small scale domestic use. Next generation nuclear is for communities. You have been killing alternatives techs for a century and still pretend not to grasp the problem? Wait a bit more and entire industries will go dead. You can choose between controlled approach and.. surprise. And when you get "surprised", the guys you are subsidizing now /I mean coal, petrol and old nuclear/ will be jobless anyway.
RalphMus 06:18 10 Feb 11It is not even necessary to do the sort of detailed study that Gulen seems to have done to realise that green industries do not bring about a net increase in employment.
Expanding a PARTICULAR industry has no effect on total numbers employed. It makes no difference whether the industry is wind turbines, massage parlours, restaurants, steel mills, brothels, you name it. The only constraint on raising employment levels is the inflation that arises if aggregate demand is excessive. And that constraint remains pretty well constant regardless of the mix of industries in any particular country.
But the latter point is a mile above the heads of green enthusiasts (except those with economics degrees or equivalent qualifications or knowledge of economics).
AGK 09:56 10 Feb 11ItÌ?s not the net increase of employment the main motive for subsidizing new techs. It is the need to get our society and economy out of the stasis. The stasis caused by interconnectedness of business and politics. http://www.corporateeurope.org/climate-and-energy/content/2010/12/eu-billions-keep-burning-fossil-fuelsI do believe you can keep going for some time in this direction, but I am sure when the "surprise" do hit you, you will find some rationalization to justify the pointless pouring of billions for obsolete technologies, not to mention the ridiculous ultraexpensive approach to keep coal stations going.. and develop market for CO2 emission. Is it about someone's profit, or is it about someone's stupidity and lack of courage to say no when necessary? Meanwhile somewhere else, OUTSIDE EU the techs are developed. So at the end the Europeans will buy them from abroad /which is not bad in itself/ and will have expensive, useless infrastructure. Better to develop ultra-conductive-hydrogen power grid, then store gas underground. But when the future energy supply situation become clear your pockets will be already pick-pocketed. So, you take care for the net job increase.. for a while.
AGK 09:57 10 Feb 11meen.. sorry
AGK 10:25 10 Feb 11than.. sorry again
AGK 10:51 10 Feb 11some industries will go down. it is unavoidable. but it is up to you to decide will it be in at least controlled manner or will catch by surprise. the future will not wait for you to figure out how to avoid it. yes coal is cheap but dirty. you can reduce sulphides and other nasty gases to some degree. but there are radio-actives as well. and huge mines and dross to store somewhere. it will be paid in future. you have to regenerate these lands. CO2 will be absorbed by plants. you will be able to plant trees at places that have to be regenerated or are currently used for biofuel crops, which is even more stupid idea.. but profitable. when profit drives politics..
wildpokerman 05:24 11 Feb 11So it took all of a couple hours for several people to point out the major flaws in his economic analysis.
1. Burning fossil fuels causes extranalities.
2. We WANT to replace older technologies with new ones that require less labor. Assuming that freed up labor can be applied to another endevor eventually we call that economic growth.
Why are you allowing this guy to perform economic malpractice on your site Project Syndicate?
MonsieurVagabond 05:47 11 Feb 11As for job creation in renewables being offset by job losses elsewhere - here's an interesting quote from a piece Gulan himself wrote (available here: http://www.usaee.org/pdf/Nov07.pdf) on the energy industries assesment of it own capacity for job creation:
"One of the recurring themes of the conference was the lack of skilled labor and consequent higher recruitment costs [in the energy market]. This theme was echoed by each of the four speakers in the Human Capital plenary.Jim Hertlein of Boyden outlined how the need to replace 2.5 percent of the energy industry workforce per year (on average) could result in increased employee recruitment and retention costs of $2.3 trillion over the next ten years. Monte King of Shell Oil Company emphasized the need for broad-based industry collaboration with respect to workforce education and training, to ensure that growth is not constrained by a talent shortage. At the same time, Mr. King acknowledged that competition for recruitment will be keen among companies. Chris Ross of CRA International identified the most pressing human capital issue as a leadership challenge. Mr. Ross cited the success of post-merger Valero, whose CEO explicitly did not lay off half the workforce, but rather used the full employee complement to drive forward cost reductions across the organization. As a result, Valero is today better-positioned people-wise than its competitors for future capacity expansions.Al Escher of Schlumberger provided a succinct summary of the situation when he said that the human capital challenge will only be met when large numbers of highly qualified people choose to spend a majority of their career in the energy industry."
Rather than skilling new employees for the current energy market could we not focus on skilling individuals for a renewable energy market and kill two birds with one stone. That way we replace one ageing workforce with a young different workforce, skilled to deal with our climate needs and can gradually begin the process of dimishing our reliance on traditional energy markets.
Gulan also summarises another part of the conference which is interestingt:
"According to Bob Tippee, editor-in-chief of the Oil & Gas Journal, there is no receptive audience to hear more accurately and fully reported energy news. He believes that this is mainly the fault of the industry but it can be fixed. Energy education matters because it can improve the politics of energy. Currently, the perception is that energy happiness = conservation + alternatives. Why are we at this confused and unrealistic state? Because scales and costs of energy needs and projects are not well understood, or worse, misunderstood. Wishful ambitions such as energy independence, zero environmental cost, and revenge against oil companies dominate discussions. Alternatives are being oversold. Educating the public is necessary but does the public want to be educated?"
Gulan seems wedded to traditional energy market analysis (although admittedly he can hardly be blamed for holding the views of expressed in a conference he was summarising). I guess my point is that he is no expert on the potential of the renewables and environmentally friendly market, being strictly a specialist in tradtional markets.
Falainothiras 09:34 11 Feb 11By the way, how is research going concerning the recycling of Polymers?
To the extent of my knowledge wind turbines are not exactly repaired but old malfunctioning parts are being replaced. You do understand that, while Green energy is good and all, in 15 to 20 years we will be chocking on Polyester garbage with no way to dispose of.
Feel free to correct my position if my comment is wrong in any way.
AUTHOR INFO Bjørn Lomborg Bjørn Lomborg is the author of The Skeptical Environmentalist and Cool It, head of the Copenhagen Consensus Center, and adjunct professor at Copenhagen Business School. MOST READ MOST RECOMMENDED MOST COMMENTED Did the Poor Cause the Crisis? Simon Johnson Global Risk and Reward in 2011 Nouriel Roubini New Rules for the Global Economy Dani Rodrik India at the UN High Table Shashi Tharoor Five Steps Forward in 2011 Michael Spence A New World Architecture George Soros No Time for a Trade War Joseph E. Stiglitz Did the Poor Cause the Crisis? Simon Johnson Avatar and Empire Naomi Wolf America's Political Class Struggle Jeffrey D. Sachs The False Promise of Green Jobs Bjørn Lomborg Why Egypt Should Worry China Barry Eichengreen Intelligent Economic Design J. Bradford DeLong The End of China's Surplus Martin Feldstein Why Did Economists Not Foresee the Crisis? Raghuram Rajan ADVERTISEMENT PROJECT SYNDICATEProject Syndicate: the world's pre-eminent source of original op-ed commentaries. A unique collaboration of distinguished opinion makers from every corner of the globe, Project Syndicate provides incisive perspectives on our changing world by those who are shaping its politics, economics, science, and culture. Exclusive, trenchant, unparalleled in scope and depth: Project Syndicate is truly A World of Ideas.
Project Syndicate provides the world's foremost newspapers with exclusive commentaries by prominent leaders and opinion makers. It currently offers 50 monthly series and one weekly series of columns on topics ranging from economics to international affairs to science and philosophy.
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Only some isolated points of critique:
Only some isolated points of critique:
What are you suggesting? To continue subsidize coal and petrol? Or even more useless and expensive CO2 storage? I believe they are perfectly positioned for siphoning more cash. The very purpose of subsidizing the new tech is to make it cheaper and more efficient, to move it no next phase of development when it will become affordable for more and more people. Wind is for offshore, solar+hydrogen storage is for small scale domestic use. Next generation nuclear is for communities. You have been killing alternatives techs for a century and still pretend not to grasp the problem? Wait a bit more and entire industries will go dead. You can choose between controlled approach and.. surprise. And when you get "surprised", the guys you are subsidizing now /I mean coal, petrol and old nuclear/ will be jobless anyway.
It is not even necessary to do the sort of detailed study that Gulen seems to have done to realise that green industries do not bring about a net increase in employment.
Expanding a PARTICULAR industry has no effect on total numbers employed. It makes no difference whether the industry is wind turbines, massage parlours, restaurants, steel mills, brothels, you name it. The only constraint on raising employment levels is the inflation that arises if aggregate demand is excessive. And that constraint remains pretty well constant regardless of the mix of industries in any particular country.
But the latter point is a mile above the heads of green enthusiasts (except those with economics degrees or equivalent qualifications or knowledge of economics).
ItÌ?s not the net increase of employment the main motive for subsidizing new techs. It is the need to get our society and economy out of the stasis. The stasis caused by interconnectedness of business and politics. http://www.corporateeurope.org/climate-and-energy/content/2010/12/eu-billions-keep-burning-fossil-fuelsI do believe you can keep going for some time in this direction, but I am sure when the "surprise" do hit you, you will find some rationalization to justify the pointless pouring of billions for obsolete technologies, not to mention the ridiculous ultraexpensive approach to keep coal stations going.. and develop market for CO2 emission. Is it about someone's profit, or is it about someone's stupidity and lack of courage to say no when necessary? Meanwhile somewhere else, OUTSIDE EU the techs are developed. So at the end the Europeans will buy them from abroad /which is not bad in itself/ and will have expensive, useless infrastructure. Better to develop ultra-conductive-hydrogen power grid, then store gas underground. But when the future energy supply situation become clear your pockets will be already pick-pocketed. So, you take care for the net job increase.. for a while.
meen.. sorry
than.. sorry again
some industries will go down. it is unavoidable. but it is up to you to decide will it be in at least controlled manner or will catch by surprise. the future will not wait for you to figure out how to avoid it. yes coal is cheap but dirty. you can reduce sulphides and other nasty gases to some degree. but there are radio-actives as well. and huge mines and dross to store somewhere. it will be paid in future. you have to regenerate these lands. CO2 will be absorbed by plants. you will be able to plant trees at places that have to be regenerated or are currently used for biofuel crops, which is even more stupid idea.. but profitable. when profit drives politics..
So it took all of a couple hours for several people to point out the major flaws in his economic analysis.
1. Burning fossil fuels causes extranalities.
2. We WANT to replace older technologies with new ones that require less labor. Assuming that freed up labor can be applied to another endevor eventually we call that economic growth.
Why are you allowing this guy to perform economic malpractice on your site Project Syndicate?
As for job creation in renewables being offset by job losses elsewhere - here's an interesting quote from a piece Gulan himself wrote (available here: http://www.usaee.org/pdf/Nov07.pdf) on the energy industries assesment of it own capacity for job creation:
"One of the recurring themes of the conference was the lack of skilled labor and consequent higher recruitment costs [in the energy market]. This theme was echoed by each of the four speakers in the Human Capital plenary.Jim Hertlein of Boyden outlined how the need to replace 2.5 percent of the energy industry workforce per year (on average) could result in increased employee recruitment and retention costs of $2.3 trillion over the next ten years. Monte King of Shell Oil Company emphasized the need for broad-based industry collaboration with respect to workforce education and training, to ensure that growth is not constrained by a talent shortage. At the same time, Mr. King acknowledged that competition for recruitment will be keen among companies. Chris Ross of CRA International identified the most pressing human capital issue as a leadership challenge. Mr. Ross cited the success of post-merger Valero, whose CEO explicitly did not lay off half the workforce, but rather used the full employee complement to drive forward cost reductions across the organization. As a result, Valero is today better-positioned people-wise than its competitors for future capacity expansions.Al Escher of Schlumberger provided a succinct summary of the situation when he said that the human capital challenge will only be met when large numbers of highly qualified people choose to spend a majority of their career in the energy industry."
Rather than skilling new employees for the current energy market could we not focus on skilling individuals for a renewable energy market and kill two birds with one stone. That way we replace one ageing workforce with a young different workforce, skilled to deal with our climate needs and can gradually begin the process of dimishing our reliance on traditional energy markets.
Gulan also summarises another part of the conference which is interestingt:
"According to Bob Tippee, editor-in-chief of the Oil & Gas Journal, there is no receptive audience to hear more accurately and fully reported energy news. He believes that this is mainly the fault of the industry but it can be fixed. Energy education matters because it can improve the politics of energy. Currently, the perception is that energy happiness = conservation + alternatives. Why are we at this confused and unrealistic state? Because scales and costs of energy needs and projects are not well understood, or worse, misunderstood. Wishful ambitions such as energy independence, zero environmental cost, and revenge against oil companies dominate discussions. Alternatives are being oversold. Educating the public is necessary but does the public want to be educated?"
Gulan seems wedded to traditional energy market analysis (although admittedly he can hardly be blamed for holding the views of expressed in a conference he was summarising). I guess my point is that he is no expert on the potential of the renewables and environmentally friendly market, being strictly a specialist in tradtional markets.
By the way, how is research going concerning the recycling of Polymers?
To the extent of my knowledge wind turbines are not exactly repaired but old malfunctioning parts are being replaced. You do understand that, while Green energy is good and all, in 15 to 20 years we will be chocking on Polyester garbage with no way to dispose of.
Feel free to correct my position if my comment is wrong in any way.
Project Syndicate: the world's pre-eminent source of original op-ed commentaries. A unique collaboration of distinguished opinion makers from every corner of the globe, Project Syndicate provides incisive perspectives on our changing world by those who are shaping its politics, economics, science, and culture. Exclusive, trenchant, unparalleled in scope and depth: Project Syndicate is truly A World of Ideas.
Project Syndicate provides the world's foremost newspapers with exclusive commentaries by prominent leaders and opinion makers. It currently offers 50 monthly series and one weekly series of columns on topics ranging from economics to international affairs to science and philosophy.
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