Reporting on the economics of climate change in this country is terrible, as made clear in the searing new report by leading journalist Eric Pooley (see How the press bungles its coverage of climate economics — “The media’s decision to play the stenographer role helped opponents of climate action stifle progress”).
The NYT economics reporter, David Leonhardt, made a big splash last week with his big piece on the stimulus, “The Big Fix.” But like many economics reporters, he is both poorly informed and thoroughly confused about clean energy — and most every other aspect of energy, as his extended discussion of green jobs makes clear:
Sometimes a project can give an economy a lift and also lead to transformation, but sometimes the goals are at odds, at least in the short term. Nothing demonstrates this quandary quite so well as green jobs, which are often cited as the single best hope for driving the post-bubble economy. Obama himself makes this case. Consumer spending has been the economic engine of the past two decades, he has said. Alternative energy will supposedly be the engine of the future – a way to save the planet, reduce the amount of money flowing to hostile oil-producing countries and revive the American economy, all at once. Put in these terms, green jobs sounds like a free lunch.
Green jobs can certainly provide stimulus. Obama’s proposal includes subsidies for companies that make wind turbines, solar power and other alternative energy sources, and these subsidies will create some jobs. But the subsidies will not be nearly enough to eliminate the gap between the cost of dirty, carbon-based energy and clean energy. Dirty-energy sources — oil, gas and coal — are cheap. That’s why we have become so dependent on them.
The only way to create huge numbers of clean-energy jobs would be to raise the cost of dirty-energy sources, as Obama’s proposed cap-and-trade carbon-reduction program would do, to make them more expensive than clean energy. This is where the green-jobs dream gets complicated.
No, no, and no. Leonhardt would seem to be completely unaware of the fact that in 2008 U.S. wind energy grew by record 8,300 MW. It was responsible for 42% of all new U.S. electricity generation installed last year. In fact, two weeks ago, Fortune reported:
The wind industry now employs more people than coal mining in the United States. Wind industry jobs jumped to 85,000 in 2008, a 70% increase from the previous year, according to a report released Tuesday from the American Wind Energy Association. In contrast, coal mining employs about 81,000 workers.
The 35,000 jobs the wind industry added in 2008 are almost certainly the single biggest source of new jobs created in the entire energy industry last year.
And they were all created by government incentives and state renewable standards. So much for Leonhardt assertion that he knows the “only way to create huge numbers of clean energy jobs.” He apparently doesn’t follow the renewable energy industry at all — or even bother to do a simple Google search. So why is he writing about it?
By the way, does he really not even have a clue that for the last few years including most of 2008, oil, gas, and coal were anything but cheap? You’d think a leading economics reporter for the paper of record who would at least know the price of the things he writes about. You’d think.
The rest of the piece spins off into an alternative universe, as he continues:
For starters, of the $700 billion we spend each year on energy, more than half stays inside this country. It goes to coal companies or utilities here, not to Iran or Russia. If we begin to use less electricity, those utilities will cut jobs.
Huh? He was talking about how the stimulus couldn’t create jobs in the alternative energy sector without a carbon price. Now he is worrying about the country actually using less electricity, which no one involved in the stimulus is talking about.
The modest amounts of energy efficiency in the stimulus would certainly create jobs retrofitting buildings and making energy-efficient equipment. But it wouldn’t cause an absolute reduction in electricity demand that Leonhardt is trash-talking.
This is just a straw man, pure and simple.
Worse, did you notice how he glossed over entirely the hundreds of billions of dollars a year that US consumers and businesses spend on energy that leave the country and end up in the hands of OPEC? Congress and Obama have been aggressively pursuing more fuel-efficient vehicles and alternative fuel vehicles, both of which hold the potential to reduce the money flowing out of the country for oil and use some of it to pay for American made technologies and hence create domestic jobs.
Why is the economics reporter for the NYT peddling an argument that is essentially indistinguishable from that of conservative think tanks (see The intellectual bankruptcy of conservatism: Heritage even opposes energy efficiency and “Oh My God, They Admitted It”)?
Leonhardt presses on:
Just as important, the current, relatively low price of energy allows other companies — manufacturers, retailers, even white-collar enterprises — to sell all sorts of things at a profit. Raising that cost would raise the cost of almost everything that businesses do. Some projects that would have been profitable to Boeing, Kroger or Microsoft in the current economy no longer will be. Jobs that would otherwise have been created won’t be.
Again, it is Leonhardt who thinks the only way to create renewable energy jobs is through the government boosting energy prices. And again, he seems painfully unaware that energy prices have been rising all by themselves up for a number of years (see “Power plants costs double since 2000 — Efficiency anyone?“).
And it apparently never occurred to him that the government might help companies use energy more efficiently, so that their energy bills did not rise even as energy prices and electricity rates do rise — even though California has been doing that for three decades now (see “Energy efficiency is THE core climate solution, Part 1: The biggest low-carbon resource by far“).
As Rob Stavins, a leading environmental economist, says, “Green jobs will, to some degree, displace other jobs.” Just think about what happened when gas prices began soaring last spring: sales of some hybrids increased, but vehicle sales fell overall.
When you run out of your own ignorant comments, that’s when it is time to quote a card-carrying voodoo economists, a MEOW (Mainstream Economist who Opines on Weather) who thinks it’s not possible or even a good idea for government policies to address two issues (jobs, energy/environment) at the same time, a man who can’t walk and chew gum at the same time.
Just think about what happens when oil prices soar over the next decade because we have run out of the cheap stuff (see “Normally staid IEA says oil will peak in 2020“). The sales of the big vehicles are going to collapse no matter what the government does. The only question is whether the government can help spur Detroit to build the only vehicles anybody will want to buy when gasoline is $5 a gallon and higher.
The ungreen jobs are doomed to disappear because they are unsustainable and are destroying a livable climate for our children and the next 50 generations. So the issue isn’t whether green jobs will be the biggest single source of new jobs in the coming decades. That is a done deal. The issue is whether the green jobs will be created in this country or in places like Europe and Japan and China where economists and economics reporters don’t waste a lot of time trying to convince the public they are a bad investment.