The Economist is hosting a green jobs debate between former Green Jobs Czar Van Jones and Andrew Morriss, one of the authors of “The Green Jobs Myth”. The pre-debate vote of reader support for the statement “This house believes that creating green jobs is a sensible aspiration for governments” was close to 50-50, so this one could go either way.
When green jobs are created by the public sector they are at best a coincidental byproduct of other worthy goals. Making green jobs an explicit policy goal means having two contradictory objectives: maximizing efficiency, that is output per dollar, and maximizing jobs, that is maximizing workers per output. If you consider that jobs cost dollars, these goals are almost exactly opposite. The only way they don’t work against each other is the extent to which you can costlessly exchange capital for labor, a rare if non-existent condition. Remember, maximizing workers per output is the same as minimizing output per worker.
The easiest defense of green jobs is to contrast it with doing nothing, The most difficult defense is to contrast it with a gas tax or cap-and-trade. This is where Jones is at his weakest:
Furthermore, governments will need to go beyond a simple cap-and-trade system for global warming pollution. Renewable energy standards and codes for energy efficiency will help build markets. Green banks and new financing tools will use public underwriting to help unleash private capital. And public investments in infrastructure will create a platform for innovative businesses to thrive and hire more workers.
Notice that when contrasted with cap-and-trade, the actions that he argues the government needs to take are completely unrelated to the kind of policies promoted by green jobs fans. For instance, weatherization would not fall under any of these categories, nor would direct subsidies to particular companies or technologies. Unless that’s what he means by “green banks… will use public underwriting” is that “the government will subsidize things”, in which case he hasn’t really made an argument so much as an assertion. Once the cost of pollution is priced into polluting, there is no more externality. What is the remaining justification for government action? He has dodged a very critical question here.
Jones is most successful in arguing that since government intervention in energy markets is inevitable and desirable, they need to explicitly prioritize green technologies, and cannot simply let the market handle it. This is a good argument for why the government should consider the environmental impact of it’s regulatory actions.
As to whether or not green jobs policies are protectionism, he argues that “In this context, policy is not a restraint on trade. It is a driver of innovation”. However, in reality it almost certainly is. When a policy goal is to maximize American jobs, that has the effect of a “Buy American” provision. Here’s one recent example:
…when American stimulus funds subsidized a joint U.S.-China wind-power farm in West Texas, it turned out that Texas stood to get 30 permanent jobs to China’s 3,000. After Sen. Charles Schumer (D., N.Y.) protested, the Chinese agreed to build a wind-turbine factory in Texas.
Clearly, prioritizing American jobs is highly correlated to prioritizing American investments, which is protectionism.
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