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Carbon pricing and jobs

By Kate Sheppard

In a new report out this week, Third Way makes a clear case for why pricing carbon dioxide emissions is good economic policy, pushing back against those who argue it would amount to "economic Armageddon."

The authors analyzed several dozen academic, private sector, financial and government studies from the past three years, coming to the clear conclusion: With a price on carbon, "some sections of the economy will decline, the net impact of a carbon price on the American economy will be positive." They looked at a range of carbon prices, as low as $15 per metric ton or as high as $158 per metric ton.


The main point is that yes, jobs in old industries will disappear, but carbon pricing will necessitate new industries. Most importantly, the United States lost 149,000 jobs in the manufacturing sector alone last year; something needs to be done to create new jobs in that sector:

Indeed, this transition is not unique—industries die and are born all of the time, as new technologies usurp the old. For example, the ice delivery industry once had 2,000 commercial ice plants nationwide, but the industry was driven to extinction by the refrigerator. By 1985, 1.1 billion typewriters were sold in the United States. That number has fallen to virtually zero only two decades later thanks to the rise of the personal computer. The once thriving telegraph industry carried 69 million messages as recently as 1970, but inexpensive long distance phone calls, the fax, and now email have reduced the number of telegraph messages to only 20,000 today.

It's always puzzled me why it's so hard to communicate this idea when it comes to energy. No one sits around mourning the decline of jobs as cobblers and chimney sweeps as the U.S. economy has shifted, yet we still dwell on the idea that jobs in oil, coal and other industries are something we should expect to always exist.

That idea just doesn't hold up to the objective reality of our current and future reserves of those resources, even if you ignore the greenhouse gas problem. Take, for example, coal. We have, at the most optimistic estimates, maybe 100 years of it left here in the United States (though some studies have suggested that recoverable reserves are far lower). We already know that we don't have much oil here. Even if one don't think the planet is warming, there is a need to shift our power supply. And doing so will necessarily create new jobs.

The whole report is certainly worth a read.

Kate Sheppard covers energy and environmental politics in Mother Jones' Washington bureau. For more of her stories, see here, and you can follow her on Twitter here.

By Washington Post editor  |  May 27, 2010; 9:30 AM ET
 
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Comments

Easy enough to explain.

It's much easier for someone to understand "this will cause people to lose jobs" than to understand "people will lose jobs, but it will create jobs elsewhere".

First, the skepticism comes into play. Where, exactly, is "elsewhere"?

Second, you empathize more with the person losing their job (specially if it's a friend or family member) than that hypothetical person that will get a job.

Third, everyone believe it will raise energy costs. Pretty easy to buy into that one.

Fourth, most people don't like change. They say they do, but when faced with it, they recoil.

Still, imo, in the end, it all boils down to that old saying: A bird in hand is worth two in the bush.

Posted by: JERiv | May 27, 2010 10:00 AM | Report abuse

Katie, if what you say about the limited supply of oil and coal is true, then simply removing government subsidies from those industries should be enough to create jobs, since the market will naturally make the shift to renewables, just like the market made the shift from ice delivery to refrigerators, or from telegraphs to long distance phone calls.

I support carbon pricing, but let's be honest-it's necessary to stop global warming, not because it will improve our economy. Carbon pricing will cause a modest amount of economic pain.

Posted by: jfcarro | May 27, 2010 10:01 AM | Report abuse

"Indeed, this transition is not unique—industries die and are born all of the time, as new technologies usurp the old"

alcoa aluminum called it "imagineering, " in 1942.
this was a part of a lengthy ad segment in a mccall's magazine.......in a nutshell, it explains how we got from there to here....

"how your imagineering and industry's imagineering hook up.
industry is thinking up new, fascinating produtcs for after the war. making these products will provide jobs for millions, provided there are enough people with money to buy the new products. the families which have their surplus tucked away in War Bonds ready to turn into cash, to buy these products, are going to be the families that are sitting on top of the world."

"it is going to be a bright new world. from our vantage point we see the emphasis put upon lightness, upon mobility, upon speed."
~~~~~~that was from the alcoa ad...ladie's home journal....november 1942

after looking at the pictures of the spillcam yesterday, and the anderson cooper segment last night, and ezra's photograph from china, i went to an archive of old mccall's magazines that i have, from 1946, to 1949.
the era of limitless imagineering....and the consequences wouldnt be felt for decades. who even thought about it then.

mccall's had a monthly segment, called "national newsletter," in which women on farms in the midwest, and in apartments in booklyn, stringing their laundry on clothes-lines, suddenly learned of a new and magical world.
no-one even dreamed of a consequence back in the day.
it just seemed like magic.....
"a combination all-electric heating and air-cooling unit may be in mass production for individual homes within a few years."

"lard and products with fat in them can remain fresh longer whithout refrigeration. the chemicals which accomplish this wil be add to the foods before they are marketed and are not for use by householders."

"aerosol bombs which will wax your car and also your floors are about ready for the market."

these were just a few of the new and brilliant ideas for "housewives" to dream of.


Posted by: jkaren | May 27, 2010 10:04 AM | Report abuse

more from the "imagineering" advertisement from alcoa aluminum in 1942, in "mccall's magazine."

"how do we know for sure that there are going to be all these new things? we have been privileged to sit in on some of this future thinking and the plans are more complete than you probably suspect."
"the whole thought turns around the fact that there is at least 30 billion dollars knocking around loose in this country."
"but the plans are there, the starting gate is ready to lift....and when you think how fast industry got into war production, you know how fast they will be able to get these new things to you when the process goes in reverse."


who knew.

Posted by: jkaren | May 27, 2010 10:20 AM | Report abuse

What a great post! But why stop with carbon pricing? Let's put a price on lots and lots and lots of stuff! Dirt pricing -- the stuff's dirt cheap and it's in limited supply! Paper pricing -- think how many jobs will be created to manufacture new electronic gadgets to replace paper!

And while we're at it, let's encourage everyone to run out and break windows! Think how many jobs will be created to replace them!

Posted by: ostap666 | May 27, 2010 11:12 AM | Report abuse

Carbon pricing, and cap-and-trade, sound awesome. Nothing like creating an artificial market in carbon offsets to create great new derivatives markets. Saving the environment is so important, these carbon credits and the derivative financial instruments will all be automatically AAA rated. And we will be assured the trillion dollar market in carbon offsets (and related derivatives) that pensions funds are now heavily invested in) are not in some kind of "bubble" and not about to "crash" even while the heavy-hitters--the Goldman-Sachs and the Al Gores--are cashing out to the tune of billions.

This isn't about limiting carbon output. Or getting rid of fossil fuels. It's about creating new taxes (it's for the environment! the children! the baby seals!) and new incomprehensible financial instruments with the imprimatur of ecological purity of government backing.

Or, so I wager. Time will tell.

Posted by: Kevin_Willis | May 27, 2010 11:19 AM | Report abuse

The difference from the transition from ice plants to refrigerators and typewriters to computer keyboards compared to carbon taxes is that millions of people made the determination based on what was good for them that they would be better off with the new industries. If Carbon was obsolete and the shift to wind/solar/algae etc fuels was better, those millions of people would do that. They are not. The carbon tax is not an economic good for the people. It's simply the elites imposing their environmental morality on everyone else. They don't care that the people will be poorer or less well off. The elites have theirs and will not be affected.

PS We have 500 years of coal supplies and over 300 years of oil. Need to keep up with the new discoveries.

Posted by: saywhat11 | May 27, 2010 12:29 PM | Report abuse

The industries cited by Ezra the Obamanista shill all ceased to exist because someone built a better mousetrap, not because the government taxed them into oblivion. If and when the "new wave" energy becomes more affordable, no government will have to tell us to embrace it; we are smart enough to make choices that are in our economic self-interest.

The problem with the government forcing things down our throat is that this country was never formed with the intent that OUR government would force things down OUR throat. That goes not only for the lefty Obamanistas, but it also goes for the more right wing governments we have had in prior decades.

If the government can figure out a way to encourage the use of alternative energy -- without PICKING BOTH WINNERS AND LOSERS -- that's great. But this government wants to pick both, and the job of the press is not to decide that the government is right and then promote it's policies. Whether the press works for the government as direct employees or simply as advocates based on personal beliefs, the result is the same; it's called propaganda. And when the propaganda promotes both winners and losers, the biggest losers in the bargain are the citizens of a reckless government.

Posted by: buggerianpaisley1 | May 27, 2010 1:35 PM | Report abuse

Sorry folks, it's too late to buy into the CCX (Chicago Climate Exchange) owned by Al Gore and many of our great progessive thinkers. Once they get cranked up, they'll take their cut of all carbon taxes and their send the rest to some 3rd world progressive dictator and the world will be wonderful (for them anyhow). In the mean time we will lose two jobs for every green job created and the carbon taxes will finish off our economy. Don't worry the nanny state will be around to take care of you.

Posted by: dcharlson | May 27, 2010 6:44 PM | Report abuse

"If Carbon was obsolete and the shift to wind/solar/algae etc fuels was better, those millions of people would do that. They are not. The carbon tax is not an economic good for the people. It's simply the elites imposing their environmental morality on everyone else. They don't care that the people will be poorer or less well off. The elites have theirs and will not be affected."


Let's try one change in this argument and see if it makes any more sense, shall we? Here goes:

"If smoking was obsolete and the shift to non-smoking was better, those millions of people would do that. They are not. The cigarette tax is not an economic good for the people. It's simply the elites imposing their healhty lung morality on everyone else. They don't care that the people will be poorer or less well off. The elites have theirs and will not be affected."


No...still sounds really stupid.

Posted by: Patrick_M | May 27, 2010 10:00 PM | Report abuse

Please stop talking about reducing carbon dioxide to lower global temperatures. That is a fallacy. Be you own scientist; prove it for yourself. Get a line chart of the growth of carbon dioxide in the atmosphere over the last 100 years; you choose a reliable source. Then, from a reliable source you choose, get a line chart of global temperatures over the past 100 years. (Do not use the 2007 UN IPCC report as a source; it has been refuted by its research director, Phil Jones, who has since resigned.) Then, lay one line chart on top of the other. Wonder of wonders, THERE IS NO CORRELATION BETWEEN CARBON DIOXIDE AND GLOBAL TEMPERATURES. Now, from a reliable source, get a line chart of solar irradiance over the past 100 years. Lay the irradiance line chart over the global temperature chart and, wonder of wonders, THERE IS A VERY CLOSE RELATIONSHIP BETWEEN GLOBAL TEMPERATURES AND SOLAR IRRADIANCE. You know, it seems we would have learned that from laying out in the sun to get tanned. Now, you can relate the facts to anyone who starts spewing false information about carbon dioxide making temperatures warmer. There are other reasons to reduce carbon dioxide, but the result will not be lower global temperatures.

Posted by: RonKH | May 28, 2010 8:00 PM | Report abuse

RonKH,

Wow. You figured it out and the worldwide scientific community did not. Be your own scientist, indeed, always a good idea, enough with all that peer review stuff. What are you going do with all that Nobel Prize money, dude?

Posted by: Patrick_M | May 29, 2010 4:58 PM | Report abuse

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