Floyd Reports

Every other sentence spoken at Harry Reid’s National Clean Energy Summit 5.0 in Las Vegas earlier this month was about “green jobs.” The sentences in between were about how it is absolutely imperative current state and federal grants, loan guarantees, tax credits ,and mandates for utilities to buy renewable power must be made permanent or else risk losing “green jobs.”

Granted, there were a few mentions of melting ice caps, droughts, rainstorms, and early cherry blossoms in D.C. — even though the United States is responsible for only 18 percent of the world’s carbon emissions and only 40 percent of that from electric power generation.

“There should be no one in this room who doubts the importance of reducing our reliance on fossil fuels,” Sen. Reid said in introducing his clean energy conference, “not only because it is good for the environment, but because it is good for the economy and good for national security. We’ve already seen how incentives, funding, and public-private partnerships have spurred job creation and innovation in this most critical sector. This has been a ray of sunshine during the Great Recession. So it’s easy to see the logic, the urgency and the opportunity of clean energy revolution.”

That is the Big Green Lie.

The Nevada Journal, a publication of the Nevada Policy Research Institute, recently reviewed 12 renewable energy projects in the state and found they received $1.3 billion in federal subsidies and loan guarantees since 2009. Those projects eventually will produce 288 full-time jobs — a cost of $4.6 million each. NV Energy has 44 such “green” projects, with eight producing power now.

The problem with this stimulus spending, as economist Arthur Laffer pointed out in a recent Wall Street Journal article, is: “For every additional government dollar spent, there is an additional private dollar taken. All the stimulus to the spending recipients is matched on a dollar-for-dollar basis every minute of every day by a depressant placed on the people who pay for these transfers. Or as a student of the dismal science might say, the total income effects of additional government spending always sum to zero.”

Actually, as Laffer later demonstrates, the sum is usually less than zero and reduces GDP.

There are examples already available. The United Kingdom launched an ambitious wind project in Scotland. A study by Verso Economics found that the annual diversion of 330 million British pounds resulted in the destruction of 3.7 jobs for every “green” job created.

Similar results occurred in Germany, Denmark, and Spain. A Spanish economist estimated that for every “green job” created by wind and solar, the rest of the economy lost 2.2 jobs.

The other job-killing aspect of “green” power is in the ongoing cost. The commissars of Carson City have dictated that by 2025, fully 25 percent of the state’s electricity must come from renewable sources. NV Energy is meeting and exceeding its current 15 percent renewable portfolio standard.

The company is signing 20-year contracts with wind, solar, biomass, and geothermal generators at prices double and triple that of fossil fuel generation, with 1 percent annual increases. (Additionally, the power company must shoulder the cost of maintaining rapid-start-up fossil fuel plants or buy power on the open market when the sun doesn’t shine and the wind doesn’t blow.) This will result in concomitant increases in power bills for residents and businesses, even though Nevada already has the second highest power costs in the West, just behind California.

To use an overly simplified example of what will transpire, as households adjust their budgets to account for higher power bills, choices will have to be made about spending. A family might choose to dine out less often.

For the local restaurant, this will mean a decline in revenue, which would necessitate trimming expenses such as waiters and cooks. Meanwhile, the business too is paying higher power bills, which would necessitate trimming expenses elsewhere such as waiters and cooks.

Feel free to substitute any other business built on discretionary spending, perhaps your job.

A Cato Institute book titled “The False Promise of Green Energy” calls the promise of “green jobs” false. The authors say the quest for “green” promotes inefficient use of labor and capital. “The green energy/jobs literature dooms everyone to live in a shrinking economy. Economic growth cannot be ordered by Congress or the United Nations. Interference in the economy by restricting successful technologies in favor of speculative technologies favored by special interests will generate stagnation.”

That is why it is a Big Green Lie.

Thomas Mitchell is a long-time Nevadan. You may share your views with him by emailing thomasmnv@yahoo.com. Read additional musings on his blog at http://4thst8.wordpress.com/

Photo Credit: Cheryl Biren (Creative Commons)