Economix Blog: Nancy Folbre: The Green Jobs Numbers

Nancy Folbre is an economics professor at the University of Massachusetts Amherst.

Now, more than ever, prospects for “green jobs” are being treated as a red flag in partisan debate.

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Media Matters, a nonprofit watchdog group, has documented a Fox News report proclaiming that the costs of green jobs exceed the benefits. A recent New York Times article, pointing to lackluster programs in California, concluded that “public efforts to stimulate creation of green jobs have largely failed.” A column by David Brooks in The New York Times was pointedly titled “Where the Jobs Aren’t.”

In reaching for bipartisan support in his jobs speech on Thursday, President Obama avoided the word “green” altogether, though his proposed increase in infrastructure spending could involve investments in improved energy efficiency.

But green jobs still hold considerable promise. While it’s not hard to find examples of programs that haven’t lived up to expectations, considerable evidence demonstrates the actual and potential employment impact of efforts to improve environmental sustainability.

Not that green jobs are easy to define. The Bureau of Labor Statistics is currently in the process of developing an official measure, but employment that either saves energy or increases use of energy generated from renewable sources clearly falls into the category.

In February, the Economic Policy Institute and the Blue-Green Alliance released a comprehensive analysis of the employment impact of American Recovery and Reinvestment Act expenditures aimed in this direction, dominated by efforts to improve energy efficiency in buildings and to promote low-carbon transportation.

The study estimates an increase in direct employment of about 367,000 jobs, while indirect employment effects came to about one million – not a cure-all for an economy with more than 14 million unemployed, but a significant contribution.

The cost per job created varied considerably, and not all programs have moved forward as quickly as they should have. But as a report from Think Progress carefully documents, sensationalized assertions of a million dollars or more spent per job are misleading. Overall, the costs of green jobs creation, whether funded with public or private dollars, are lower than those in most other sectors of the economy, at an average of about $60,000 each. These jobs are likely to last for years, generating private cost-savings and important public benefits.

Retrofits to improve the energy efficiency of our existing building stock offer a particularly high rate of return.

A recent Brookings Institution report calls for broader attention to “clean jobs,” defined as those in establishments that produce or add value to goods and services with an environmental benefit, such as reducing pollution or natural resource depletion.

By this definition, the clean economy is a pretty small slice of the United States economy, accounting for only about 2 percent of all jobs. But it’s now bigger than the dirtiest slice, related to production of fossil-fuel based energy.

The analysis by Brookings of employment trends on the county level between 2003 and 2010 shows that jobs in wind energy and solar photovoltaics represent a small but rapidly expanding part of the larger clean economy.

The report also points to a growing share of private venture capital moving in this direction: 16 percent in 2010, from 2 percent in 1995.

So why not rely entirely on the private sector? The biggest gains from investments in new renewable-energy technologies are not easily captured in private transactions, because they produce environmental services that are largely unpriced. Companies can sell consumers with a conscience a “share” in global greenhouse gas reduction – that’s what the growing business of carbon offsets is all about. But consumers who don’t pay also get the benefits, creating a strong temptation to free ride.

Companies can’t market to the consumers likely to benefit most, because they haven’t yet been born. Conventional fossil fuels are cost-effective now only because the environmental costs are dumped into a global commons that imposes costs on other people and future generations.

Public policies could remedy this problem, by imposing a tax on carbon emissions so that their market price better approximates their social cost. Adopting clean-energy standards would also increase demand for clean and green production, giving private companies greater incentive to invest.

The Brookings report explains that Germany, carrying out such policies, attracted investments from major American corporations including Google, First Solar and Good Energies. Between 2004 and 2009, German employment in renewable energy increased to more than 300,000 from 160,000.

Globally, the green jobs numbers look pretty strong. Unfortunately, in the United States, the possibilities for bipartisan collaboration still look very weak. Flag-waving is so much easier.

Article source: http://feeds.nytimes.com/click.phdo?i=34d29c9f3ea730561612cbf0a31eef71