Justifying Green Spending
Posted July 6, 2010 at 11:29 am 
Filed in: 
I was struck by the headline of a recent article in the Guardian last week: “Obama hands $2bn to solar energy firms: Subsidies for green companies aimed at creating 5,000 jobs.”
The money will fund the construction of one of the world’s largest solar plants in Arizona, as well as two smaller plants in Colorado and Indiana. Supporting these expenditures, President Obama overwhelmingly emphasized the fact that they would create jobs, treating their energy-related payoffs almost as footnotes. Newspaper articles all touted the fact that the spending would create jobs, and the president’s press statement was flooded with quotes such as the following:
“I’ve seen once-shuttered factories humming with new workers who are building solar panels and wind turbines; rolling up their sleeves to help America win the race for the clean energy economy.”
While handouts to solar companies do indeed have a number of valid justifications, it seems that creating jobs at a cost $400,000 per job should not be one of them, let alone President Obama’s primary reason for the investment. The discord between rhetoric and reality becomes even starker upon considering that of the estimated 5,000 jobs that will be created, only 1,600 are permanent, while the remainder are temporary construction jobs.
While clean, affordable energy is crucial to support the 21st century economy, it will not be a “clean-energy economy.” In contrast, the economy will be largely based on other industries that provide greater percentages of our jobs, such as health care and social assistance (12.9%), retail trade (11.5%), and educational services (9.8%). The energy industry, of course, does create meaningful employment, but it simply does not stack up to the others.
However, to overemphasize this fact is to miss the larger point, that affordable energy is needed to facilitate activity in other sectors of the economy, which depend on it to be profitable. As such, in spending on clean energy, the President must be careful to see the forest from the trees: Our goal should not be to spend money on energy to create energy jobs, but rather should aim to create affordable energy with limited externalities.
In assessing President Obama’s plan to generate job growth for recovery from the economic recession, it is useful to remember that job loss didn’t cause the recession, but vice versa. One major force that drove our country into recession was the fact that oil prices reached $147 per barrel in 2008. Indeed, energy price spikes have preceded each of the Nation’s recessions since World War II. Thus, rather than investing in energy to create short-term jobs, Obama must keep the end-goal in mind: clean energy, rather than clean energy-jobs, will facilitate economic recovery.
Previous Post
