On the campaign trail in 2008, then-Senator Barack Obama announced a plan to create five million new “green collar” jobs. Since becoming president, he has repeatedly touted his support for green jobs; for instance, in his 2010 State of the Union address and Earth Day remarks on April 22, 2010. In addition, recent stimulus legislation and appropriations bills have contained provisions to subsidize or promote green job creation.
Unfortunately, there is growing evidence that government support of green industries will cost more jobs than they create.
Spain. President Obama has identified Spain as a model for a new economy driven by green jobs. But a 2009 study from Madrid’s King Juan Carlos University showed that for every green job the Spanish government created, 2.2 jobs were lost as energy-intensive industries either closed down or moved to other countries with lower energy costs:
- The government’s green job push created approximately 50,000 jobs, but resulted in a loss of more than 110,000 jobs in other industries.
- Only 1 in 10 of the new green jobs was permanent.
- Each green job created since 2000 has required about $774,000 in government subsidies. [See the figure.]
Denmark. On Earth Day in 2009, President Obama cited Denmark as another country that has benefited from subsidized green job creation. Like Spain, Denmark’s green industry – primarily wind-powered electricity generation – was heavily subsidized and likely would not have existed without government support. According to “Wind Energy: The Case of Denmark,” a 2009 report by the Center for Political Studies, a Danish think tank:
- The Danish government spent $90,000 to $140,000 to create each wind job.
- About 28,400 people were employed in the Danish wind industry, but only about 1 in 10 were new jobs – the remaining 90 percent were simply positions shifted from one industry to another.
- From 1999 to 2006, the average government-subsidized clean energy technology worker added $10,000 less to the Danish economy than did the average employee in other industrial and manufacturing sectors.
- As a result, Danish gross domestic product was about $270 million less than it would have been if the wind industry work force were employed in other sectors.
Thus, a 2006 report from the Danish Economic Council concludes, “The wind power expansion in the 1990s is an example of a policy that was unprofitable from society’s point of view, even taking the economic advantages that the wind business enjoyed into consideration.”
Read the full NCPA Brief Analysis, “Green Jobs: Hope or Hype Redux.”