Green-job future a fraud

 

JUNE 1, 2010

By JOHN SEILER

California’s unemployment rate remains stubbornly high, at 12.6 percent. That’s 2.7 percentage points above the national average. The persistence of unemployment also is something Californians haven’t seen since the Great Depression. The May 30 Sacramento Bee reported:

To a degree not seen in recent recessions, unemployment has become a drawn-out affair.

About 6.7 million Americans have been unemployed for at least 27 weeks, including nearly 880,000 Californians. The ranks of the state’s long-term unemployed more than doubled in the past year and now account for about 40 percent of all those out of work, according to the Employment Development Department.

Are “green jobs” the answer?

“Green jobs” are those associated with producing a cleaner environment, such as manufacturing solar panels, which reduce dependence on electricity produced by coal and fossil-fuel generation plants; or high-mileage hybrid cars depending partly on battery power, such as Toyota’s popular Prius.

One of the major arguments for passing AB32, the Global Warming Solutions Act of 2006, was that it would create California jobs in new industries in which the Golden State then would take a global lead, much as our companies led in computers and medical devices. AB32 mandates cutting greenhouse gas emissions in the state by 25 percent by 2020.

Gov. Arnold Schwarzenegger made such arguments when he signed AB32 in 2006:

Some have challenged whether AB32 is good for businesses. I say unquestionably it is good for businesses. Not only large, well-established businesses, but small businesses that will harness their entrepreneurial spirit to help us achieve our climate goals.

He said something similar recently at a May 12 meeting on green jobs at the University of California, Davis. The symposium’s title itself speaks of green jobs creation: “E3: Economic Prosperity, Energy and the Environment — A Roundtable to Set the Agenda on Clean and Sustainable Paths to Economic Prosperity.”

Opposing the November 2010 initiative to effectively repeal AB32, which is called the California Jobs Initiative, the governor insisted:

Our policies that have been put in place have created jobs, it has increased the productivity in the green sector. We have seen it, if it is solar, if it is building solar panels, installing solar panels, if it is building solar plants, if it is the technology in battery development, if it is electric cars. We’re the only state that really is producing now electric cars. You have the only state right now, we have hydrogen cars here. And there is a tremendous amount of job growth because of all that.

 

What’s green?

A major problem in discussing green jobs is defining exactly what they are, David Zetland told me; he’s Wantrup Fellow in Natural Resource Economics and Political Economy at the University of California, Berkeley, and editor of the Aguanomics.com Web site on water policy.

“The government doesn’t know what is a green activity,” he said. “Even if they did know, they can’t say that one solution is preferable to another because it’s hard to know the real impact of each green activity. Finally, politicians and bureaucrats are often persuaded – bribed – to favor one solution over another.”

He said that, when green jobs are subsidized, “then everybody will want to be classified green. The unions will want a law requiring solar panels to be installed by union workers, who will be paid $35 an hour, instead of $18 an hour for non-union labor. This will stimulate demand for union labor. But you will get fewer put in at a much higher price, which also lengthens the payback period for recovering installation costs through lower monthly bills.”

Another problem with solar panels is that many are manufactured in China, which has less stringent environmental controls on its factories. So all that’s happening, Zetland said, is that subsidized solar panels made in high-pollution Chinese plants will replace electricity being generated in America or Canada by relatively clean natural gas, nuclear and hydro power plants.

It is true that solar companies are growing in America. But for now, notes CalFinder, a site for Nationwide Home Solar Power Contractors and Information:

There are a slew of notable solar manufacturers around the world including BP Solar, Shell Solar, Kyocera Solar, Mitsubishi Solar, and GE Solar, which are offshoots of larger corporations. There is a noticeable lack of US companies among the list of top solar manufacturers, although several companies have divisions based in the United States. This is not to say that the US is a slouch in the solar industry. The main reason the US is behind in manufacturing is that other countries like Germany and China were faster and more aggressive in subsidizing the solar industry. Nonetheless, the US market is growing as fast as anywhere and is a leader in the thin film, building integrated PV [photovoltaic] sector.

Manipulation

In general, Zetland said, “Subsidies can be manipulated; the vast majority of them are.”

He said that one example could be a gardener who cuts lawns, spewing pollution into the air from his lawnmower for $30,000 a year in pay. He then is turned into a Landscape Architect “xeriscaper,” who replaces a lawn with rocks, gets his pay subsidized up to $50,000 a year, and gets counted in the “green job” category.

“So someone doing a green job may be getting paid to do a job that he would do anyway,” Zetland said. “That subsidy is wasted because it didn’t change anyone’s behavior.”

A big problem with subsidies is that there’s an added cost: that of the government bureaucracy that distributes the tax money. “The government doesn’t operate at zero cost,” Zetland said. “They need people to collect and distribute money. And the more complicated the distribution, the more discretion required, and the more employees needed to do the job. More employees means that the cost of subsides is higher.”

The Prius example

About five years ago when I was on the editorial board of the Orange County Register, we met with then-Insurance Commissioner John Garamendi, since lieutenant governor and now a U.S. representative. He was so proud to boast that he was driving a Prius, then as now a status symbol among the green set.

But Zetland said, “Look at the life cycle of the Prius. It’s an environmental disaster. Unless you drive 100,000 miles a year, the batteries” create more pollution than the car saves in reduced energy use. “It’s better to drive an old car that gets 20 mpg than scrap it for a new Prius.”

Impact Lab notes:

Building a Toyota Prius causes more environmental damage than a Hummer that is on the road for three times longer than a Prius. As already noted, the Prius is partly driven by a battery which contains nickel. The nickel is mined and smelted at a plant in Sudbury, Ontario. This plant has caused so much environmental damage to the surrounding environment that NASA has used the ‘dead zone’ around the plant to test moon rovers. The area around the plant is devoid of any life for miles.

When you pool together all the combined energy it takes to drive and build a Toyota Prius, the flagship car of energy fanatics, it takes almost 50 percent more energy than a Hummer – the Prius’s arch nemesis.

Through a study by CNW Marketing called “Dust to Dust,” the total combined energy is taken from all the electrical, fuel, transportation, materials (metal, plastic, etc) and hundreds of other factors over the expected lifetime of a vehicle. The Prius costs an average of $3.25 per mile driven over a lifetime of 100,000 miles – the expected lifespan of the Hybrid.

The Hummer, on the other hand, costs a more fiscal $1.95 per mile to put on the road over an expected lifetime of 300,000 miles. That means the Hummer will last three times longer than a Prius and use less combined energy doing it.

Complications

Zetland brought up an economic precept: “If you want to do two things, don’t use one tool.” In this case the two things are: 1) create jobs and 2) improve the environment. If you want to create jobs, he said, government should “make it cheaper to hire people,” such as by reducing taxes and regulatory burdens.

But if it wants to improve the environment, then it should “subsidize green or penalize brown,” for example, by the emissions standards on cars that have been implemented since the early 1970s across America, and since the 1960s in California, helping clean our air.

John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog.com. His email: [email protected].