The Myth of Green Jobs: The European Experience

March 10, 2011

Free Market Foundation

With $2.3 billion in Recovery Act tax credits allocated for green manufacturers, President Obama and other Democratic politicians have high hopes for green technology. But their expectations clash with both economic theory and practical experience in Europe, says Kenneth P. Green, a resident scholar at American Enterprise Institute.

Consider:

The capital needed for one green job in Italy could create almost five jobs in the general economy.

Wind and solar power have raised household energy prices by 7.5 per cent in Germany.

Look at Spain’s experience:

Since 2000, Spain spent 571,138 euro (about $774,000) on each green job, including subsidies of more than 1 million euro (about $1.4 million) per job in the wind industry.

The programmes creating those jobs destroyed nearly 110,500 jobs elsewhere in the economy (2.2 jobs destroyed for every green job created).

Each “green” megawatt installed destroys 5.28 jobs elsewhere in the economy on average.

These costs do not reflect Spain’s particular approach but rather the nature of schemes to promote renewable energy sources, says Green.

Central planners in the United States trying to promote green industry will fare no better at creating jobs or stimulating the economy. Green jobs merely replace jobs in other sectors and actually contribute less to economic growth.

Source: Kenneth P. Green, The Myth of Green Energy Jobs: The European Experience, American Enterprise Institute, February 15, 2011.

For text: http://www.aei.org/outlook/101026

For more on Environment Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=31

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 1 March 2011