A new study by an economics professor at Juan Carlos University in Madrid says Spanish government spending on green energy to boost job creation kills on average 2.2 jobs for every green-collar job it creates. The carnage could be even worse, the study says, if job destruction from companies fleeing Spain’s higher energy prices were included.
That got conservative commentators excited. National Review’s Planet Gore, for instance, notes that following that math, the U.S. could stand to lose at least 6 million jobs if the Obama green-jobs push is successful.
Now, Spain’s job-creation record is far from stellar—the country has had double-digit unemployment since the restoration of democracy thirty years ago, and today has a 14% jobless rate. Renewable-energy leadership has not been a panacea, as much as the current premier hopes it will pull Spain out of the current crisis.
But the study doesn’t actually identify those jobs allegedly destroyed by renewable-energy spending. What the study actually says is that government spending on renewable energy is less than half as efficient at job creation as private-sector spending. Specifically, each green job required on average 571,000 euros, compared with 259,000 euros in “average capital per worker” in the rest of the economy.
So how does that translate into outright job destruction? It’s simply a question of opportunity cost, the paper says: “The money spent by the government cannot, once committed to “green jobs”, be consumed or invested by private parties and therefore the jobs that would depend on such consumption and investment will disappear or not be created.”
On paper, that makes sense. But Spain’s support for renewable energy came out of existing tax revenues—there were no special levies on corporate activity designed to underwrite clean energy.
The money the government has spent on clean energy may have edged out other government spending, but it’s hard to see how it could have edged out private-sector spending, especially when the Socialist government there has reduced corporate income-tax rates, most recently this past January.
And just where did that study come from? Professor Gabriel Calzada is the founder and president of the Fundacion Juan de Mariana, a libertarian think tank founded in 2005. He’s also a fellow of the Center for New Europe, a Brussels-based libertarian think thank than in recent years apparently accepted funding from Exxon Mobil.