January 13, 2009
Brian Kennedy (202) 346-8826
Chris Tucker (202) 346-8825

Green Lantern: New Study Shines Bright Light on Potential Harm to Economy and Job Losses of Obama’s Green Jobs Plan

IER experts Michaels and Murphy find “green jobs” plan would cost our country jobs, increase price Americans pay for their energy

Washington, DC – One week away from inaugurating a new president, a comprehensive new study authored by the Institute for Energy Research (IER) confronts, explains, and methodically refutes the increasingly popular notion that government-directed efforts to create millions of “green jobs” can cure our nation of its economic ills.

In Green Jobs: Fact or Fiction?, IER senior fellow Robert Michaels and economist Robert Murphy consider the conclusions of four recent analyses on the subject – all of which project a clear, unconditional economic windfall from diverting billions in taxpayer resources to commissioning jobs that, by their very definition, cannot withstand the rigors of the marketplace.

Drs. Michaels and Murphy dissect the assumptions at the center of those findings, and eventually conclude that a massive government program aimed at creating “green jobs” – at the exclusion of all others – would result in a net loss in U.S. employment opportunities, a sizeable increase in the price Americans pay for their energy, and a deepening and continuation of our current economic condition.

IER president Thomas J. Pyle issued the following statement:

“With the release of this study, it’s our sincere hope that a rational discussion on the merits of the president-elect’s ‘green jobs’ plan can finally begin in earnest. Such a plan, according to this analysis, would result in a net loss in U.S. jobs, a net increase in the price consumers pay for energy, and a further protraction and deepening of our current economic downturn.

“With an economy in peril and millions of Americans out of work, it stands to reason that any plan that promises to create millions of new jobs would be welcome news to the American people. But before we fundamentally restructure our economy, and turn over to the federal government unprecedented authority over its day-to-day operations, we ought to decide whether the supposed cure to what ails our economy is worse than the actual disease itself. This study takes the first meaningful step toward answering that question. We hope others follow.”

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.”

NOTE: As IER analysis has shown, it takes as much as $100,000 in taxpayer resources to create a single so-called ‘green’ job – a fact not accounted for in any of the studies analyzed by IER scholars.

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.


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