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Government-funded Study Shows Net Loss of Jobs From CO2 Policies

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Unread 05.10.10, 11:41 AM
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Government-funded Study Shows Net Loss of Jobs From CO2 Policies

On 05.10.10 07:00 AM posted by David Kreutzer

For his sake, let’s hope that Bruce Arnold at the Congressional Budget Office doesn’t get Gabriel Calzada treatment from the American Wind Energy Association and the National Renewable Energy Laboratory.

To freshen your memory, Gabriel Calzada is the economist at the King Juan Carlos University who got out his calculator and analyzed the green job situation in Spain—the same Spain whose job-crushing subsidies are supposed to be a model for our green recovery. The professor found that subsidizing green energy costs more traditional jobs than are created in the green sector. More than two jobs were lost for every single green job created by subsidies.

Because his scholarship raised important red flags, it caused quite a stir in the policy debate. Such a stir that it appears the American Wind Energy Association (funded by the wind-power industry) helped coordinate a smear job on Calzada by the tax-payer-funded National Renewable Energy Laboratory.

Googling “Gabriel Calzada” will provide many links to pages quoting the supposed rebuttal by the NREL. What the NREL and AWEA can’t rebut is that Spain’s unemployment rate exceeds all its European neighbors and just passed 20 percent. Further, the deteriorating economic situation is leading Spain to reduce or cancel those very subsidies that are supposed to help the economy. They are admitting the fraud, at least implicitly. That is, the cost of the subsidies exceeds the benefit to the economy. When the times get tough, it’s time to stop pretending.

Which takes us to Bruce Arnold. In his recent “CBO Economic and Budget Issue Brief: How Policies to Reduce Greenhouse Gas Emissions Could Affect Employment,” Arnold points out the negative impact of CO2-cutting policies like cap and trade or carbon taxes,
In particular, job losses in the industries that shrink would lower employment more than job gains in other industries would increase employment, thereby raising the overall unemployment rate.”

So the CBO says pretty much what Calzada said about the green stimulus—there isn’t one. Carbon cuts lead to net job losses. The CBO author, Arnold, goes further and notes that those who keep their jobs will get reduced pay,
The increases in prices caused by a tax or a cap-and-trade program would cause workers’ real (inflation-adjusted) wages to be lower than they would otherwise be. Nearly all workers would choose to remain in the workforce and accept those wages.”

This sounds like a twist on that old Lite Beer ad, “Which is it: fewer jobs or less pay? It’s both!” No green job gain, no green stimulus. Of course, this is just what we’ve been saying. For example see:

• “A Renewable Electricity Standard: What It Will Really Cost Americans,”

• “What Boxer-Kerry Will Cost the Economy,”

• “Impact of CO2 Restrictions on Employment and Income: Green Jobs or Gone Jobs?,”

Though other regulator agencies have also noted the economic hit from carbon caps, it will be interesting to see what the NREL does with this new brief from the CBO.

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