Green Jobs Investment Must Not Come at Cost of Other Jobs

March 22, 2010

With our national unemployment rate at 9.7 percent, Americans are concerned about what federal lawmakers and the administration are doing to create jobs.  President Obama has placed a heavy emphasis on “green jobs,” or jobs that are loosely associated with renewable energy sources, energy efficiency, or alternative fuel.  The White House believes so strongly in the job-creating power of the clean energy sector that it recently awarded $2.3 billion in tax credits to encourage companies to create green jobs. 

                         Green Jobs Plan Raises Red Flags
Without question, there is an important role for clean and renewable energy in our nation’s energy future, and we should continue to invest in the ongoing research and development of these technologies.  However, when it comes to job creation, we must proceed in a way that invests taxpayer money wisely and does not harm existing U.S. jobs.   On its face, green job creation appears to be a noble goal.  A closer look reveals the problems associated with green job economics and a mishandling of federal dollars being directed toward this effort.

The president’s green jobs plan consists of heavy government regulations, subsidies, and renewable-power mandates.  Economists have stated that any jobs this plan creates would do so at the expense of other jobs.  By tilting the playing field in favor of wind and solar energy and advanced biofuels, for example, the federal government would penalize other energy industries, including  coal, oil, gas, and nuclear.  These traditional energy industries, which currently employ nearly one million Americans, would suffer lost capital and could be forced to lay off workers.

                         $135,000 to Create Each Green Job
Alternative and renewable energies will play an important part in the future of our country.  However, as we work to jumpstart our economy, green jobs are not a cost-effective way for the federal government to spur growth and to lower unemployment.  The administration argues that the job losses caused by closing power plants would be replaced by new jobs in the clean energy sector.  However, the cost of green job creation is staggering.  Last year’s so-called stimulus bill, which I opposed, provided $2.3 billion for green job grants.  President Obama has said that these grants will create 17,000 new jobs.  If true, this means it will cost the taxpayers more than $135,000 per job created.  This does not account for the interest our nation will incur as a result of this deficit spending.

Another area of concern is how this federal funding will be spent.  Congress has seen evidence that federal dollars directed toward green jobs could actually subsidize job creation overseas.  While American workers may get installation or infrastructure jobs in the clean energy sector, new green manufacturing jobs often go overseas where labor costs are low and environmental regulations are lax.  For example, the Department of Energy (DOE) is reportedly considering spending $450 million in stimulus funds on a wind farm in Texas.   It is troubling that the project’s wind turbines would be supplied by a manufacturer in China, resulting in the creation of 3,000 green jobs for Chinese workers. 
At a recent Senate hearing, two U.S. solar manufacturers asked for increased federal investment in American green jobs, even though the manufacturing side of their businesses relies on overseas workers.  First Solar just completed construction of four solar manufacturing plants in Malaysia, which created a total of 2,000 new jobs for Malaysian workers. The other company, eSolar outsources most of its manufacturing to China. 

                              American Made Energy
We have the resources, the infrastructure, and the skilled workers needed to create jobs, strengthen the economy, and help secure our nation’s energy future.  Rather than relying solely on green jobs to accomplish this task, we should continue focusing on the economic benefits of domestic energy production.  For too long, regulatory restrictions have limited energy producers’ access to our vast resources.  Our nation’s offshore oil and gas reserves, the oil shale in Colorado, Utah, Wyoming, and the Arctic Wildlife Natural Reserve (ANWR) sit virtually untapped.  Yet, there are energy companies prepared to pay billions to the U.S. government for the right to expand domestic energy production in an environmentally safe way.   Industry studies show that fully leveraging domestic energy resources would create hundreds of thousands of Americans jobs. 

Serious investment in our domestic energy resources would strengthen our national security and our economy.  Although clean, alternative energy technologies can be a part of our broader energy portfolio, it would be unwise for the administration to invest in green jobs at the expense of others.