A “green jobs” movement won’t help our recovery from COVID-19
Under a commission chaired by billionaire and former presidential candidate Tom Steyer, California hopes to lead the way. Like many on the political left, Steyer supports a “Green New Deal” that would restart the economy by creating “green jobs” in fields like alternative energy and conservation.
Unfortunately, ideas to build a green economy through command and control efforts in the wake of the COVID-19 epidemic are impossible, unwise and won’t even affect the transformation needed to deal with climate change.
While important, the energy sector comprises a small share of the economy, about 5.8 percent of spending and four to six percent of jobs by the most recent estimates (all job numbers that follow are pre-COVID-19).
While definitions are malleable, “green jobs” represent less than a third of a sector still dominated by fossil fuels––no more than two percent of total employment nationally.
Even doubling this wouldn’t make serious dent in unemployment rates now approaching 20 percent.
In California––home to about 12 percent of the population and 20 percent of “green” jobs––the number of such jobs has remained stuck at about 500,000 despite relatively healthy overall job growth (at least prior to COVID-19) and billions in subsidies.
Many “green jobs” are constrained by geography and macroeconomic realities. Flat windy states like Oklahoma, Kansas, and Iowa, for example, have a huge advantage as places to install wind turbines, while the low-skill, high pollution manufacturing needed to make simple solar cells is better done offshore closer to raw material mining sites.
Even if it were possible, however, building up employment based on “green jobs” wouldn’t be wise. One of the reasons that trendy renewables like solar and wind power still provide only 3.6 percent of their electricity is precisely because they require so much more labor than their fossil fuel competitors.
There are 370,000 jobs in wind and solar power while the entire coal industry needs fewer than 80,000 people to provide nearly quarter of all power in the United States. Some of this difference comes from the fact that coal plants are shutting while we’re building new solar and wind facilities, but this huge gap in per-worker productivity still isn’t economically sustainable. The renewables most favored by environmental groups––wind and solar––will only prove practical for a large share of electricity production when energy companies can produce more power with fewer employees.
This is the main reason a “green economy” plan directed by a central authority is unlikely to achieve its primary objectives.
Environmental policy––understood properly––focuses on reducing pollution in an economically efficient manner; this means fewer workers in many cases.
Labor policy, on the other hand, focuses on encouraging people to work in the place where their labor can be most efficiently used.
Trying to create jobs in a few predetermined sectors––particularly those that will do the best for society if they are highly efficient––will likely make it even harder to achieve scale in those very sectors.
Worse still, the misallocation of resources that results may make it harder for society to pay both the costs of switching to new fuels and the steps necessary to adapt to climate change.
No doubt, confronting the serious challenge of climate change requires a switch away from fossil fuels. But building out the green energy sector will happen most quickly and efficiently if we remove burdensome regulations, enable fair market prices and let the economy flourish overall.
Doing so still won’t be cheap but the right steps––based on proven free market principles––can work.
A centrally planned “green jobs” effort tries to do too much at once and, in the end, will accomplish little.