Reality and Obama's Big Green Budget Boondoggle

News reports indicate (even if they often try to bury) that President Obama’s supposed austerity moves include massive increases over already-inflated spending levels for ‘green energy’ boondoggles. These are very economically harmful.

To support this move, the Senate Environment and Public Works Committee, via its subcommittee chaired by the politically candid Bernard Sanders, will hold a hearing this afternoon touting ‘Green Jobs and Trade’.

After I was first contacted about testifying I prepared remarks which, though I am not appearing, I have submitted. Someone has to say these things before we triple- or quadruple-down on the ethanol debacle, a mess from which we are unlikely to extricate ourselves even after the harm becomes known. That’s what creating then richly feeding constituencies will do.

Below is a truncated version of points made in the opening and first section, ‘China Syndrome’ (with citations omitted). The remarks include other sections — Not ‘New’, Not of ‘the Future’; Green ‘Census’ Jobs and the Green-Jobs Bubble; The German Model; The Broader European Experience; Spain; Expensive Waste; and an appendix of Recent Developments in Other EU “Green Economy” Programs — all of which you can read here:

The Committee today is considering the idea that the United States might become a world leading exporter of politically selected technologies and that this path might be blazed by mandating or otherwise expanding government (taxpayer) support schemes for those goods.

[E]xperience shows that this is highly unlikely, if very likely to cause great harm.

‘Green jobs’ generally refers to a series of support schemes ensuring more man-hours per unit of energy produced. That is, ensuring more expensive, less efficient energy. This has obvious economic impacts, none of them positive. That makes the recently coined argument that these schemes are actually, somehow, the way out of the economic downturn more curious.

Congress should view ‘green jobs’ as the new ‘shovel-ready jobs’. It simply is not as advertised.

Even strong supporters of these programs nonetheless say things like Harvard economist Edward L. Glaeser recently wrote in the New York Times, that “it always was a mistake to think that clean energy was going to be a jobs bonanza,” and “We shouldn’t pretend that cheaper solar energy will end up employing millions of our less-skilled citizens.”

Then there is “Michael Eckhart, president of the American Council on Renewable Energy [who said China has] ‘won manufacturing… Game over, exit the stadium'”.

But do not worry. “[H]e said there are U.S. jobs in installing and maintaining solar panels in the United States.” That acknowledges that the U.S. will not somehow become a world leading exporter of renewables by mandating their use here, and indeed it belies the public sales pitch for massive ‘green jobs’ schemes. It does, however, reaffirm what scrutiny of even those studies claiming net job gain from green jobs schemes reveals: not only will they not replace lost jobs in America, they won’t replace the additional jobs their support schemes cause to be lost.

China Syndrome

About China, it seems that “The White House calculates that there is enough public anxiety about the U.S. slipping in competition with China, India and other emerging nations that voters could rally behind calls for investing in future growth.”

… China is not making solar panels for domestic installation, but in fact refuse to adopt the kind of scheme called for here to allegedly make us competitors with the Chinese in making them. So by making many but hardly using the machines, China proves the obvious: one need not mandate or force the use of something to be a leader in making and exporting them.

China therefore is [making the contraptions…] to satisfy western governments’ near obsession with politically dictated energy sources; their crash program into wind is largely driven by the same reasons. If western governments abandon this emphasis you will see China’s wind and solar industries largely if not entirely re-purposed in near-record time.

As the Scientific Alliance (UK) wrote in a recent update:

…China is taking the lead in the sense of using its low-cost manufacturing base to produce photovoltaic cells and wind turbines for highly subsidised markets in the West. European taxpayers are helping to expand the China’s manufacturing sector at the expense of their own, while China itself continues to invest heavily in coal-fired and nuclear power stations.”

In fact, experience indicates that mandating their use here is one more harmful move making it ever less likely they will end up being made here, because of the higher cost of energy ‘renewables’ necessitate.

But to follow this argument and believe that we will win the supposed great windmill race, or become the world leader in making them, is to believe that my buying a million copies of Windows will make me Bill Gates.

The answer to the rhetorical question proffered by certain policymakers — “do we want to buy all of our windmills and solar panels from China?” — is not to mandate their use here. We will always find ourselves buying from the low-cost producer, and just as the Germans have discovered with solar, that will rarely if ever be us. The answer is instead to decide against mandating or coercing their use here in the first place.