California’s unemployment rate remains stubbornly high, at 12.6
percent. That’s 2.7 percentage points above the national average. The
persistence of unemployment also is something Californians haven’t seen
since the Great Depression. The May 30 Sacramento Bee reported:
To a degree not seen in recent recessions, unemployment has become a drawn-out affair.
About 6.7 million Americans have been
unemployed for at least 27 weeks, including nearly 880,000
Californians. The ranks of the state’s long-term unemployed more than
doubled in the past year and now account for about 40 percent of all
those out of work, according to the Employment Development Department.
Are "green jobs" the answer?
"Green jobs" are those associated with producing a cleaner
environment, such as manufacturing solar panels, which reduce
dependence on electricity produced by coal and fossil-fuel generation
plants; or high-mileage hybrid cars depending partly on battery power,
such as Toyota’s popular Prius.
One of the major arguments for passing AB32, the Global Warming
Solutions Act of 2006, was that it would create California jobs in new
industries in which the Golden State then would take a global lead,
much as our companies led in computers and medical devices. AB32
mandates cutting greenhouse gas emissions in the state by 25 percent by
Gov. Arnold Schwarzenegger made such arguments when he signed AB32 in 2006:
Some have challenged whether AB32 is
good for businesses. I say unquestionably it is good for businesses.
Not only large, well-established businesses, but small businesses that
will harness their entrepreneurial spirit to help us achieve our
He said something similar recently at a May 12 meeting on green jobs at the University of California, Davis. The symposium‘s
title itself speaks of green jobs creation: "E3: Economic Prosperity,
Energy and the Environment – A Roundtable to Set the Agenda on Clean
and Sustainable Paths to Economic Prosperity."
Our policies that have been put in place
have created jobs, it has increased the productivity in the green
sector. We have seen it, if it is solar, if it is building solar
panels, installing solar panels, if it is building solar plants, if it
is the technology in battery development, if it is electric cars. We’re
the only state that really is producing now electric cars. You have the
only state right now, we have hydrogen cars here. And there is a
tremendous amount of job growth because of all that.
A major problem in discussing green jobs is defining exactly what
they are, David Zetland told me; he’s Wantrup Fellow in Natural
Resource Economics and Political Economy at the University of
California, Berkeley, and editor of the Aguanomics.com Web site on water policy.
"The government doesn’t know what is a green activity," he said.
"Even if they did know, they can’t say that one solution is preferable
to another because it’s hard to know the real impact of each green
activity. Finally, politicians and bureaucrats are often persuaded –
bribed – to favor one solution over another."
He said that, when green jobs are subsidized, "then everybody will
want to be classified green. The unions will want a law requiring solar
panels to be installed by union workers, who will be paid $35 an hour,
instead of $18 an hour for non-union labor. This will stimulate demand
for union labor. But you will get fewer put in at a much higher price,
which also lengthens the payback period for recovering installation
costs through lower monthly bills."
Another problem with solar panels is that many are manufactured in
China, which has less stringent environmental controls on its
factories. So all that’s happening, Zetland said, is that subsidized
solar panels made in high-pollution Chinese plants will replace
electricity being generated in America or Canada by relatively clean
natural gas, nuclear and hydro power plants.
It is true that solar companies are growing in America. But for now, notes CalFinder, a site for Nationwide Home Solar Power Contractors and Information:
There are a slew of notable solar
manufacturers around the world including BP Solar, Shell Solar, Kyocera
Solar, Mitsubishi Solar, and GE Solar, which are offshoots of larger
corporations. There is a noticeable lack of US companies among the list
of top solar manufacturers, although several companies have divisions
based in the United States. This is not to say that the US is a slouch
in the solar industry. The main reason the US is behind in
manufacturing is that other countries like Germany and China were
faster and more aggressive in subsidizing the solar industry.
Nonetheless, the US market is growing as fast as anywhere and is a
leader in the thin film, building integrated PV [photovoltaic] sector.
In general, Zetland said, "Subsidies can be manipulated; the vast majority of them are."
He said that one example could be a gardener who cuts lawns, spewing
pollution into the air from his lawnmower for $30,000 a year in pay. He
then is turned into a Landscape Architect "xeriscaper," who replaces a lawn with rocks, gets his pay subsidized up to $50,000 a year, and gets counted in the "green job" category.
"So someone doing a green job may be getting paid to do a job that
he would do anyway," Zetland said. "That subsidy is wasted because it
didn’t change anyone’s behavior."
A big problem with subsidies is that there’s an added cost: that of
the government bureaucracy that distributes the tax money. "The
government doesn’t operate at zero cost," Zetland said. "They need
people to collect and distribute money. And the more complicated the
distribution, the more discretion required, and the more employees
needed to do the job. More employees means that the cost of subsides is
The Prius example
About five years ago when I was on the editorial board of the Orange County Register, we met with then-Insurance Commissioner John Garamendi, since lieutenant governor and now a U.S. representative. He was so proud to boast that he was driving a Prius, then as now a status symbol among the green set.
But Zetland said, "Look at the life cycle of the Prius. It’s an
environmental disaster. Unless you drive 100,000 miles a year, the
batteries" create more pollution than the car saves in reduced energy
use. "It’s better to drive an old car that gets 20 mpg than scrap it
for a new Prius."
Building a Toyota Prius causes more environmental damage than a Hummer that is on the road for three times longer than a Prius.
As already noted, the Prius is partly driven by a battery which
contains nickel. The nickel is mined and smelted at a plant in Sudbury,
Ontario. This plant has caused so much environmental damage to the
surrounding environment that NASA has used the ‘dead zone’ around the
plant to test moon rovers. The area around the plant is devoid of any life for miles.
When you pool together all the combined
energy it takes to drive and build a Toyota Prius, the flagship car of
energy fanatics, it takes almost 50 percent more energy than a Hummer –
the Prius’s arch nemesis.
Through a study by CNW Marketing called
"Dust to Dust," the total combined energy is taken from all the
electrical, fuel, transportation, materials (metal, plastic, etc) and
hundreds of other factors over the expected lifetime of a vehicle. The
Prius costs an average of $3.25 per mile driven over a lifetime of
100,000 miles – the expected lifespan of the Hybrid.
The Hummer, on the other hand, costs a
more fiscal $1.95 per mile to put on the road over an expected lifetime
of 300,000 miles. That means the Hummer will last three times longer
than a Prius and use less combined energy doing it.
Zetland brought up an economic precept: "If you want to do two
things, don’t use one tool." In this case the two things are: 1) create
jobs and 2) improve the environment. If you want to create jobs, he
said, government should "make it cheaper to hire people," such as by
reducing taxes and regulatory burdens.
But if it wants to improve the environment, then it should
"subsidize green or penalize brown," for example, by the emissions
standards on cars that have been implemented since the early 1970s
across America, and since the 1960s in California, helping clean our