More Questions Than Answers As House Committee Unveils Outline of “Green Jobs” Stimulus

IER

16 years ago

FOR IMMEDIATE RELEASE
January 15, 2009
CONTACT:
Brian Kennedy (202) 346-8826
Chris Tucker (202) 346-8825

Hundreds of billions of taxpayer dollars spent on creating “green jobs” to renovate government buildings, weatherize houses – silent on economic stimulus that could be gained through responsible energy exploration

Washington, DC – The chairman of the House Appropriations Committee offered up the first indication of what the president-elect’s “green jobs” stimulus may look like today, as Rep. David Obey (D-Wisc.) released the outlines of a plan that seeks to address America’s “energy shortcomings” by spending billions to renovate government buildings, purchase “alternative buses and trucks,” and strip away lead paint.

This week, the Institute for Energy Research (IER) released a comprehensive analysis of the purported benefits of government “green jobs” like the ones found in Obey’s outline. The study found the likely result would be a net loss in U.S. jobs, a sizeable increase in the price Americans pay for their energy, and a deepening of our current economic crisis.

IER president Thomas J. Pyle issued the following statement:

“As the IER study released this week makes abundantly clear, the campaign to sell government ‘green jobs’ as a cure for our economic ills relies on misguided assumptions, unsound data, and false hope. Today, we were finally given a chance to see how much all of this might cost the taxpayer – and on what it might actually be spent. Unfortunately, whether we’re spending billions of taxpayer dollars to install new light fixtures in a government building, or stripping down paint in another – none of that can even begin to compare with the stimulative impact that producing more of our nation’s abundant energy resources could immediately provide. A genuine economic stimulus plan would’ve included a strategy for leveraging those resources on page one. This is not such a plan.”

According to a fact sheet released by the Appropriations Committee, the “green jobs” stimulus plan soon to be considered in the House is likely to include the following:

$32 billion in new government spending on the electrical grid;

$16 billion for repairs to public housing;

$6 billion to weatherize lower-income homes;

$10 billion for public transit spending, claiming it can save 4.2 billion gallons of gasoline a year (the public transit lobby, the American Public Transportation Association, only claims a 1.4 billion gallons a year savings [http://www.apta.com/media/releases/070109_energy_report.cfm]);

$31 billion in new spending on government agencies that will “lead to long term energy cost savings”; and

$19 billion for environmental programs.

Among the key findings of Green Jobs: Fact or Fiction?:

“[Obama’s green jobs plan] would likely increase consumer energy costs and the costs of a wide array of energy-intensive goods, slow GDP growth and ironically may yield no net job gains. More likely, [it] would result in net job losses.”

“Although each report [in defense of ‘green jobs’] is unique, a common characteristic is that they all rest on incomplete economic analysis, and consequently greatly overstate the net benefits of their policy recommendations.”

“[The Center for American Progress] estimates that this “fiscal stimulus” will result in the creation of two million jobs. Yet the CAP methodology treats the $100 billion as manna from heaven; it does not consider the direct and indirect adverse effects (including job destruction) of imposing higher costs on a wide array of energy-intensive industries and thereby raising prices for consumers.”

“The government doesn’t create wealth simply by taking $100 billion from one group of firms and handing it over to a different group …”

“After broadly defining the renewable industry, the Council of Mayors study goes on to paint a picture of expanding markets that can only grow further. In reality, with the single exception of wind, U.S. power production from renewables has stagnated for the past fifteen years.”

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

#####