Green jobs will make the economy grow, or so the often repeated mantra goes.
Actually there are fewer green jobs in Delaware now than in 2003 (750 in 2003, 650 in 20111) and significant job growth appears to be unlikely.
Furthermore, green jobs incentives will cost as much as $500 a year in higher electricity bills diverting money from other uses! So someone else loses a job because you don’t go out as often or don’t buy a new piece of furniture.
Eight independent studies2 relating experiences from Germany, Spain, Denmark, Italy, the United Kingdom, and California indicate each green job will cost between one and eight jobs elsewhere. Those jurisdictions are all a decade further down the experience curve than Delaware and are all in the process of trimming subsidies and renewable energy targets.
These green jobs also come with large government start up subsidies. While a typical non-green job requires an investment of $15,000, new jobs producing electric cars at the old General Motors plant will receive $275,000 a job and Bluewater Wind will receive $4.8 million a job in federal government subsidies3.
There is no real definition of what constitutes a “green” job but they can be generally assumed to include jobs associated with the production and installation of solar cells, wind turbines, electric vehicles and their batteries, bio-fuels, and small hydropower systems.
These products require government supported research and subsidies to consumers in order to survive in a free market economy. Sometimes jobs related to increasing energy efficiency are also included. Considering the United States has been improving efficiency at a rate of 1.8% a year4 and produces three times the amount of goods and services for the same amount of greenhouse gas emitted in 1949, jobs related to efficiency are not new.
Proponents of the green economy are betting on significant job growth from the solar and wind industry and from new technologies. We disagree and here is why:
Solar installation capacity does not need to grow much to meet the requirements of the Delaware Renewable Portfolio Standard. Half the cost of solar is in the production of solar modules and these are likely to be produced in other countries such as China5.
Delaware is not really suitable for onshore wind and offshore wind will be at least twice as expensive as onshore wind. Federal subsidies for large wind turbines are scheduled to end at the end of 2012 and are not likely to be extended. If they were, just the tax credits for the NRG/Bluewater Wind offshore project would add almost $1 billion to the unsustainable federal deficit. The current contract between Bluewater Wind and Delmarva Power appears to be significantly under-priced and approval of a higher price appears unlikely6.
The old General Motors Newport plant is scheduled to begin building electric cars in 2012. We wish the project well in creating up to 2000 jobs. However, the car appears to be over-priced, late to market, and with no well established distribution or service network compared to the already introduced Nissan “Leaf” and General Motors “Volt”. A recent study by automotive industry expert, J. D. Powers, predicts the plug in vehicle market will be very small for the foreseeable future7.
Published by the Caesar Rodney Institute
Center for Energy Competitiveness
There may be one silver lining if the electric car project keeps the plant open long enough for someone else to buy it for standard vehicle production.
Research projects are underway at the University of Delaware, and private firms such as Dupont. Some projects are focused on technologies that have a low probability of technical success such as battery research and improved solar cells. Others pursue technologies that, if successful, are unlikely to result in jobs in Delaware such as bio-fuels and improved wind turbine transmission gearing as these industries are located in other states.
One exception may be a Delaware based start-up company, HydroCoil Power, Inc. They have created a novel micro-turbine for extracting electricity from low head, medium flow water sources and they plan to keep production in Delaware. So far, all funding has been through private sources and the company appears to be on a path to success.