The danger of the "green jobs" argument

“Green jobs” is, for better or worse, becoming the rallying cry and focal point of the fight over climate change legislation in Congress. I’ve generally had reservations over this approach because:

1. The point of the climate bill is climate, not jobs, and it is hard to do both at the same time
2. I worry that the green jobs argument is being oversold
3. If the case that the bill will create jobs is shown to be flawed, it tremendously weakens the public argument for the bill (even though it loses none of its urgency)

Given that preamble... Tyler Cowen links to a study on the cost of green jobs in Spain. Here are some choice quotes from the study:

Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

The study calculates that since 2000 Spain spent €571,138 to create each “green job”, including subsidies of more than €1 million per wind industry job.

And here is Tyler’s commentary:

To be sure, there are very real benefits from limiting climate change. But if it takes more jobs to produce "green energy," that is a net cost to the economy, not a benefit... We're dealing now with something beyond the Keynesian short run and so those extra jobs are a drain of resources from elsewhere. If you wish, sub out the word "energy" and sub in the word "agriculture" and then reevaluate the sentence from the vantage point of 1900. Would it truly create net jobs -- much less good jobs -- to trash tractors and industrial fertilizer? The ideal situation would be a technology where very few jobs were required to create and distribute the nation's energy supply.

The idea that directed government spending is important to private sector job creation in the long term flies in the face of most capitalist ideology and economic theory. It is, in effect, economic populism with socialist implications (and with all due respect to socialism, I don't think that's what most American voters would aim for if the argument were laid out transparently). But the green jobs meme is so attractive politically, given the state of the economy, that it’s lured lawmakers like a Siren... and I worry how things will turn out once the economic evidence is examined in the light of day.

Tyler also links to Bastiat's candlemakers' petition against the sun, which is both quite funny and quite apropos.