TILTING AT GREEN WINDMILLS

June 26, 2009

Why is President Obama recommending that America emulate the Spanish model for creating "green jobs" when Spain's unemployment rate is 18.1 percent partly because of spending on such jobs, asks Gabriel Calzada, an economics professor at the Universidad Rey Juan Carlos?

In a new study, Calzada and his team demonstrate how much the green jobs policy hindered Spain's way out of the current economic crisis.  

Key points from the study:

  • Since 2000, Spain has spent €571,138 (about U.S.$804,752.75) to create each green job, including subsidies of more than €1 million (about U.S.$1,408,516.52) per wind industry job.
  • The programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every "green job" created.
  • Principally, the high cost of electricity affects costs of production and employment levels in metallurgy, non-metallic mining and food processing, beverage and tobacco industries.
  • Each "green" megawatt installed destroys 5.28 jobs on average elsewhere in the economy.

Also:

  • The price of a comprehensive electricity rate in Spain would have to be increased 31 percent to being able to repay the historic debt generated by this rate deficit mainly produced by the subsidies to renewable.
  • Therefore, Spanish citizens must cope with either an increase inelectricity rates or increased taxes (and public deficit), as will the United States if it follows Spain's model.

Source: George F. Will, "Tilting at Green Windmills," Washington Post, June 25, 2009; based upon: Gabriel Calzada Alvarez et al., "Study of the effects on employment of public aid to renewable energy sources," Universidad Rey Juan Carlos, March 2009.

For text:

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/24/AR2009062403012.html

 

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