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Gabriel Calzada Álvarez speaks to the U.S. Congress about 'green jobs'

Gabriel Calzada Álvarez, Associate Professor at Universidad Rey Juan Carlos (King Juan Carlos University) in Madrid, delivered this testimony before U.S. House Select Committee on Energy Independence and Global Warming. In March 2009 Álvarez and two colleagues from the University, released their study on the Spanish experience with “green jobs”. An excerpt of his testimony is provided below. The full testimony can be accessed by clicking on the link at the bottom of the page.

SUMMARY

President Obama has made clear his intention to follow Europe's lead in employing state intervention in the economy to "create" what are called "green jobs", specifically as a path out of the current economic troubles. Europe's experience actually suggests that this is precisely the wrong approach, and I appreciate the opportunity to comment for your hearing record on our research which put these claims to the test using official data.

Our study sought to answer the seminal question-what was the price of Spain's attempt to lead the world in a clean energy transformation. Our research shows that that price was very high. Here are some highlights from our study:

  • For every 1 green job financed by Spanish taxpayers, 2.2 jobs were lost as an opportunity cost.
  • Only 1 out of 10 green job contracts were in maintenance and operation of already installed plants, and most of the rest of the working positions are only sustainable in an expansive environment related to high subsidies.
  • Since 2000, Spain has committed €571,138 ($753,778) per each "green job,"
  • Those programs resulted in the destruction of nearly 110,500 jobs.
  • Each "green" megawatt installed on average destroyed 5.39 jobs elsewhere in the economy, and in the case of solar photovoltaics, the number reaches 8.99 jobs per megawatt hour installed.

Spain has already attempted to lead the world in a clean energy transformation. But our research shows that Spain's policies were economically destructive.

When the president of a country with a relatively low unemployment rate like the US decides to learn how to create jobs from a country like Spain with the highest unemployment rate among developed countries, it should be in a field where that country has a a demonstrable track record of job creation. Unfortunately, this is not the case of job creation in Spain through public support for the renewable energy.

Spain might have some original and efficient policies to show the rest of the world but unfortunately renewables aid is not one of them.

Bubbles Burst

In Spain, we are witnessing the logical conclusion of an unsustainable policy of government subsidies and mandates of uneconomic forms of Energy. The bubble is bursting. In this case, it is a bubble created by government policies requiring more and more revenue best described so well by former British Prime Minister Lady Margaret Thatcher: "the problem with socialism is that eventually you run out of other people's money." That is what is happening in Spain's renewable energy business today.

And while small and localized bubbles have occurred throughout history because of many individuals making the same bad decision, the magnitude of potential problems is tremendously amplified when those decisions are sanctioned and encouraged by government largesse and misguided interventions in the market. Governments have a bad track record of picking winners and losers in markets, and in fact, generally pick economic losers because it lacks the necessary incentives to avoid mal-investment and loss of capital. This eventually results in the withdrawal of political and economic support for the government's created market. The bubble bursts.

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Calzada Pdf Congress Copy

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SEP 24 2009
http://www.windaction.org/posts/26329-gabriel-calzada-alvarez-speaks-to-the-u-s-congress-about-green-jobs
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