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White House Response to AIM “Green Jobs” Coverage Misunderstands “Market Forces”

In a tweet [1] sent by White House media official Jesse Lee in direct response to AIM’s coverage [2] of the Politico report [3] on the elusive “green jobs” the President has promised, the press office sent “a few folks who disagree.”



The first item was an image of President Obama at a photo-op with workers at a solar energy plant. The second item is more interesting. Lee tweeted an article [6] written for CNBC by “freelance journalist” Rob Reuteman which claimed that “everyone seems to agree there will be many more [green jobs] in the coming decades.” Reuteman claims that “market forces” in addition to regulatory mandates are creating such jobs.

Reuteman notes that “twenty-nine states have ordered their utilities to produce up to 30 percent of power through renewable energy in the next couple decades.” This is a mandate, not a market force.

Reuteman reports that the stimulus program “earmarked more than $70 billion in direct spending, tax breaks, and loan guarantees…most of it for ‘green energy.’” This too is not a market force but state intervention.

Reuteman then finds his first “market force,” noting that a for-profit university in Colorado offers a degree in “Wind Energy Technology.” This is the same “Wind Energy Technology” that Sen. Lamar Alexander (R-TN) noted [7] receives “25 times as much [in subsidy] per megawatt-hour as…all other forms of electricity combined.”

Citing a report [8] by IHS Global Insight for the United States Conference of Mayors, Reuteman claims that “4.2 million green jobs over the next 30 years” will be created.  This translates to 140,000 jobs per year, or approximately [9] the minimum number of jobs that must be created in one month to keep the unemployment rate from rising. It is worth noting that the Global Insight report was published in October 2008, before the effects of the September 2008 financial calamity were widely known. Additionally, the study assumes that legislatures will not only continue to enact “Renewable Portfolio Standards” which mandate that “renewables” will constitute a certain proportion of total electricity generation but also raise the mandated targets. Reutman has not found his “market forces.”

Reuteman also reports that the stimulus provided significant amounts of money to community colleges to train students in “green job” skills. This again is clearly a “legislative mandate” and a state intervention.

In conclusion, Reuteman can only claim vindication on half his thesis. If legislative mandates continue to subsidize “green” technologies, jobs will be created in those sectors. However, his claim that the private market will switch to the technologies Reuteman prefers is unsupported: The only “incentives” he can demonstrate are state and federal subsidies, not customer preference. Reuteman and Lee may be noble in their desire for a world in which windmills are plentiful and migratory bird deaths are legion, but they must be honest about the costs of their dream.