Common Tragedies

Thoughts on Environmental Economics

Question of the day

Posted by Rich Sweeney on June 4, 2008

If we really can create new, high paying jobs with government policy, and if voters really think this is a good thing to do, then why do the advocates of such a policy need to hide behind the auspices of tackling global warming?

As Kevin Doyle recently wrote on Grist, “the drumbeat of interest in green-collar jobs just keeps getting louder.” Too loud, in my opinion. I say this not because I hate green collar jobs (I work in one, I think), but because I’m concerned first and foremost with tackling climate change, and fear that this ill-considered, possibly misleading rhetoric about green jobs could end up doing more harm than good. I’ve written about the encroachment of the “make work bias” on environmental policy before, so I’m not going to repeat everything here (For more info, John Whitehead has been the most consistent and cogent green jobs skeptic. See here, here, and here for starters). Instead I’ll just list the causes of my apprehension about the viability of a marriage between jobs and climate change. Thoughts on all the arguments/ questions in this post would be appreciated.

1. Creating jobs isn’t categorically desirable. Daniel summarized Bryan Caplan’s point on this issue in my previous post.

You want to create jobs? Just ban all modern farming equipment and force everyone to grow their own food. Rather than 5 people being able to grow the food for every 100, it will take 90…. This would create millions of jobs, but I don’t see many voters getting behind this one.

2. Green jobs <> new jobs. Far too often green jobs advocates take evidence that climate policy will increase employment in a given sector, and report it as if this translates into a net increase in jobs economy wide. In reality, ex ante, it’s unclear what the net effect would be. Today’s Wonk Room report on the new PERI/ Center for American Progress study is a good example. The researchers actually only looked at the workers/ industries that would benefit from climate legislation. Ideally, assuming you thought employment was a relevant metric, this would be compared to the cost to workers who would be harmed by the same policies.

The fact is that some workers will lose their jobs once we put a price on carbon. If they didn’t, the policy wouldn’t be working. Now we can almost certainly offset these costs with targetted training and transfer programs, but the short run effects on jobs is ambiguous, which is why it’s dangerous for advocates of tackling climate change to tie these two issues so closely together. Which brings me to my final point.

3. We don’t need to talk about “green jobs” in order to pass comprehensive climate legislation. Both parties’ candidates for the fall support cutting carbon emissions substantially in the coming decades (although, in typical “maverick” style, McCain appears to oppose many of the steps necessary to achieve this goal). Economists of all stripes are in almost universal agreement that rising carbon emissions are the result of a market failure, and that this failure can be corrected by pricing the right to emit. The EU, which is far more concerned with labor outcomes than the US, is about to enter the second phase of its carbon trading program and ten northeastern states are slated to begin capping and trading electricity sector emissions next January (RGGI). While Lieberman-Warner will probably die (which, in my opinion is a good thing), there are a host of other, much less flawed, bills being worked up in both Houses as I write this. It took a long time, but we’ve come this far knowing that truth and scientific evidence where on our side. Lets not compromise all the progress we’ve made by writing green checks our policies can’t cash.

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