Monday, February 21, 2011

The Myth of Green Energy Jobs: The European Experience

By Kenneth P. Green

Energy and Environment Outlook, American Enterprise Institute, February 2011

With $2.3 billion in Recovery Act tax credits allocated for green manufacturers, President Barack Obama and other Democratic politicians have high hopes for green technology. But their expectations clash with both economic theory and practical experience in Europe. Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy. Wind and solar power have raised household energy prices by 7.5 percent in Germany, and Denmark has the highest electricity prices in the European Union. Central planners in the United States trying to promote green industry will fare no better at creating jobs or stimulating the economy.

Key points in this Outlook:

•The Obama administration, its allies in Congress, and the environmental community champion the benefits of green technology and the creation of green jobs to alleviate unemployment.
•Green jobs merely replace jobs in other sectors and actually contribute less to economic growth.
•Experiments with renewable energy in Europe have led to job loss, higher energy prices, and corruption.


Both economic theory and the experience of European countries that have attempted to build a green-energy economy that will create green jobs reveal that such thinking is deeply fallacious. Spain, Italy, Germany, and Denmark have all tried and failed to accomplish positive outcomes with renewable energy. Some will suggest that the United States is different, and that US planners will have the wisdom to make the green economy work here. But there is no getting around the fact that you do not improve your economy or create jobs by breaking windows, and US planners are no more omniscient than those in Europe.

Related: Economist: Green energy cannot be defended as a source of jobs

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