President Obama has framed part of his recovery plan around the creation of new jobs. He has used Spain and other European countries’ green jobs creation endeavors as models. However, a recent study by researchers at Spain’s King Juan Carlos University questions whether "green jobs" are worth the public investments. Lead author, Gabriel Calzada Alvarez, uses Spain’s investments in such jobs during the past decade as a case study to demonstrate that sustainable energy investment destroys jobs and the economy. I think there are numerous flaws in Calzada’s study. He falsified data, factored in taxes levied upon businesses even through no additional taxes were levied, ignored factors other economists cite as the cause like Spain's humongous real estate bubble bursting and worst of all-- the fact that Spain's current unemployment is lower now than before the green jobs program was implemented. The man is not a credible researching, he is an admitted climate denier.
Let's Look at How Calzada Reached His Conclusions
When you look at a complex issue, with many variables, and do not take into consideration those variables, you almost always inevitably end up with extremely skewed results. For instance, applying Spain’s experience to the United States, might be a faulty approach because at this time the US does not have the same incentive structures that were instituted by Spain. This is particular true if the numbers used are incorrect. Brad Johnson of the Work Roomhas also pointed out that the number of green jobs cited in the study as resulting from Spain's renewable energy program are way off. Official estimates are 188,000, yet Calzada only lists 50,000 jobs.
Spain's Current High Employment Level is Still Lower Than It Was Before The Green Jobs Programs Were Implemented
Spain historically has had very high unemployment rates since the restoration of democracy thirty years ago, while the US has not. In fact, since the green jobs program has been initiated in Spain, unemployment has been much lower than before it was put Even now, unemployment is lower then it was before the green jobs program was launched. Before the green jobs program was put in place, going back to 1980, there are eighteen years when unemployment was higher in Spain than it is now, with unemployment rates ranging between (24% and 15%). The highest years were between 1993 and 1997 with employment ranging between 24% and 20%. However between 2001 and 2007, unemployment has ranged between 10.5 and 8.5%) still pretty high,but historically low for Spain. The current US unemployment numbers at its highest levels in decades, is lower than Spain's lowest unemployment numbers.
Additionally, the author never identifies which jobs are destroyed by green jobs, or how that process of job destruction occurs. To attribute recent unemployment numbers only to green jobs promotion, seems to me to be a questionable approach. The study fails to establish any type of cause and effect. Spain might have lost those jobs even if they did not have a green jobs program; or it is possible that the green jobs program may have prevented even more jobs from being lost.
Two weeks ago, José María Roig Aldasoro, Regional Minister of Innovation, Enterprise and Employment Government of Navarre rebutted Calzada's claims in a letter arguing that that green investment "has created wealth, employment and technological development" in Spain. Navarre is a small region of Spain that is well-known throughout the world for its development in renewable energies. After 20 years of development, 65% of the electrical energy consumed in Navarre originates from renewable energies.
Aldasoro breaks down the actual history of green job creation in Navarre:
– 1994: Unemployment at 12.8%, first wind farm erected.
– 1998: Unemployment at 10%, 100 installed megawatts of wind power.
– 2001: Unemployment at 6.8%, two R&D and worker-training centers are opened.
– 2007: Unemployment of 4.76%, total of 100 new renewable-energy companies created, representing 5% of total GDP."
Spain's Bursting Real Estate Bubble is Likely The Major Cause of Job Loss
Many economists not connected to ExxonMobil or The Heartland Institute attribute much of Spain's job losses to the bursting of its real estate bubble. As recently as two years ago, Spain was creating a third of all new jobs in the European Union. Most of these jobs were a result of its booming construction sector. (Sound eerily familiar?) Real estate accounted for almost 18% of Spain's gross domestic product last year, contributing to 3.6% annual growth. Once interest rates rose, the housing bubble burst, and the jobs disappeared. Canada, the UK and the US also experienced a bursting of their real estate bubble which led to rising unemployment. If green jobs caused job losses in Spain and not the real estate bubble bursting as occurred in the US, the UK, Canada and other places, then he needs to explain how Spain is different than other countries with real estate bubbles that burst, and how green job creation impacts the real estate and construction industries. Economists predicted the outcomes of these real estate bubbles a few years ago. None of them cited any green jobs policy as a major factor.
The Two-Tiered Labor Market Is a Secondary Cause of Job Loss in Spain
Another cause of the job losses in Spain is its two-tiered labor market. Young people in Spain have fixed term contracts, so it's easy to fire them, whereas older people have contracts worded so that it is very difficult to fire them. As a result, one in three adults under 25 are unemployed. These short-term contract legalities and their impact on firing was not addressed in Calzada's study, however, a number of economists have cited it as a factor in the job losses.
No Additional Taxes Were Levied Against Business To Finance The Green Jobs Program
The Brattleboro Reformer has pointed out a flaw in Calzada's heavy use on the idea of "opportunity cost." Opportunity cost is the true cost of something is what you give up to get it--- or as The Brattleboro Reformer explains it..." that a dollar spent on green jobs is a dollar that can't be consumed or invested by the private sector. Thus, a job that depends on consumption might disappear or not be created." As the Brattlebore Reformer points out, this doesn't apply in Spains's case.
Keith Johnson, lead writer of The Wall Street Journal Blog, Environmental Capital points out that that Spain’s support for renewable energy came out of existing tax revenues and that the Spanish government has reduced corporate income-tax rates, most recently this past January. While renewable energy spending might have prevented spending in other areas, the author does not explain how government Thus, a job that depends on consumption might disappear or not be created." As the Brattlebore Reformer points out, this doesn't apply in Spains's case.spending prevented or discouraged industry from spending. He also explains that the study doesn’t actually identify those jobs allegedly destroyed by renewable-energy spending, but simply tells you what the Spanish government is spending.
Nuno Cardoso, a commenter on my blog, pointed out another issue not previously raised.
For all the renewable energy sources (solar, wind, wave), the initial investment is upwards of 95% of the total costs, whereas maintenance and operational costs are residual. In this respect renewables are similar to nuclear power, and unlike coal or oil-based power plants, where a large portion of the costs is the fuel itself. This explains much of the enormous costs per green job: the benefits for the investing country only start to become visible many years after the investment has been made. Also, was the value of the produced energy, being the primary goal of the investment, taken into account? Another thing that certainly wasn't mentioned in the study was that Spain reached a peak of 40% in wind power this last March. I wonder how many barrels of oil weren't imported as a result of that?
Who is Calzada
Let look at the author of the study. Who is Calzada. Gabriel Calzada is a founding member of the Prague Network, an international grouping of institutions aimed at countering panic connected with global warming. He is also a fellow at the Centre for the New Europe, a Brussels-based libertarian think tank that in recent years has accepted funding from ExxonMobil. The company has a history of funding groups that have misrepresented the science of climate change by outright denial of the evidence.
Calzada is also the founder and president of the Fundacion Juan de Mariana, another libertarian think tank. The libertarian movement in Spain does not believe in taxes, so it is my guess that they would not support many programs paid for with tax dollars. Calzada is also an admitted climate change skeptic and recently spoke at the International Conference on Climate Change(2009) hosted by the conservative think tank, the Heartland Institute. The Heartland Institute is another well-known hub of climate science denial. This year’s conference was its second effort on climate change, and attracted representatives from conservative and free enterprise groups around the world; manyof their members and supporters deny climate change and work aggressively against renewable energy and environmental endeavors. A large number of the attendees also came from bodies funded by fossil-fuel companies.
In a recent interview, (in Spanish)
Calzada asserts that scientists are deeply divided as to the cause of global warming. He claims that solar and water vapor activity from the earth have a large impact on global warming and that human activity is minor in comparison. He questions if this small creation of 'gases' by human activity would have an impact compared to other natural activity. He also does not believe in the kioto protocol and claims that the green economy is a way to to 'ration' economic activity.
My understanding is that the vast majority of scientists (specifically those not paid by oil companies) are not divided over the causes of global warming.
A Strange Target Audience
Something else that stood out is that Calzada wrote the study to specifically speak to the US. That is an odd choice of audience to me. It seems that this cautionary tale would normally apply to Spain and its policy makers--speaking to their issues, so that they could perhaps adjust course by reshaping their energy policy. As we speak, Spain is investing even more money into green programs, as part of their stimulus. If Calzada truly intended to to use this case study to warn others, why not also warn other countries in the European Union, of which Spain is a part of; or Canada, who is also poised to start a green initiative.
Considering Calzada's strong views against the realities of fossil fuels and climate change, his affiliations with groups who are known for denying climate change, his willingness to accept funding from an organization who is notorious for funding studies to serve as propaganda, and his audience focus, it would be wise to at least closely examine and question the conclusions he reaches. This background would explain why Calzada failed to address factors that other economists considered. If he reached his conclusion before doing the study, there would be no reason to address issues like cause and effect. Considering all of the above, I think Calzada has serious credibility issues
So while it is possible that Spain's investment in green jobs has cost it twice as many jobs in non-green sectors, we have yet to see a study that provides the empirical data to prove it. If this is true, we need to know it, so we can figure out where the Spanish went wrong and identify alternative solutions. Calzada did neither. Since he does not recognize that there is a climate crisis or that fossil fuels will eventually run out, he seems to take short-term view in his approach to conducting the study. With so much data proving otherwise and so much at stake, I do not think that we have the luxury of taking a possibly politically motivated, incomplete, study seriously.
I do not think the purpose of the study was to point out flaws in Spain's economic policy, but to raise doubt and shut down support for similar policies in the US.
The more you read about Calzada's study, the more it seems as if his study, is not even a study, but a propaganda tool. For instance, he does not use figures that are remotely close to the official figures for green jobs created and does not explain where he gets his numbers - which by the way are 2/3 less than the actual number of jobs created. He counts on us not knowing the actual numbers. While he put together a forty page document, he is counting on people like you and me not actually reading the study. He knows that most people will assume that it is a legitimate study and in the end assume there are some truths in his hypothesis.
In the end, whether his study is wrong or not is irrelevant, for its purpose is not to warn us about something harmful or prevent policy makers from making mistakes, but to create doubt and erode support for something he is being paid to oppose. His goal, as an admitted climate change denier and disbeliever of peak oil, is to get people to question facts. That is what he is getting paid for.
FOLLOW UP: Hey everyone:
Thanks for the support, recommendations and rescue. I've been lurking regularly for two years, but never posted. So I did not know how to set up a tip jar. Thanks for the recommendation. I'm glad you are promoting this, because the right will use this "study" like a bible to destroy the cleantech investment movement. There is a plan for a second round of investments globally next winter after the next Kyoto meeting and this study is their main weapon for making sure all global plans are thwarted.
JustS a heads up: I think their is going to be another study coming out of Ireland soon. And Again, Ireland had one of the worse real estate bubbles in history and resulting record unemployment
Thsnks gain
Tracey de Morsella
The Green Economy Post