Should curbing emissions really be about green jobs?
American University is out with a study showing that the $2 billion of stimulus money that has gone to promoting American wind power has mostly found its way to overseas wind turbine makers. Cue the typical protectionist outrage about how, if we are to green the economy, we should make sure the jobs the effort creates stay here.
But as the American Enterprise Institute’s Ken Green argued to me recently, that road is dangerous. Among the reasons America buys wind turbines from abroad is that it is more cost efficient to produce them overseas; in order to satisfy the protectionists, Congress would have to make policy that effectively raised the cost of renewable energy by encouraging or mandating the purchase of more expensive, American-made equipment. Doing so only makes curbing emissions that much harder -- not to mention unpopular. And, by the way, it would also tempt a punishing trade war.
Whatever we do about global warming, we must not use the effort as a stealth reisolation of the American economy, pumping up a new sector that we then protect from world trade, effectively rolling back the progress we have made over the course of decades promoting more open markets. And if trading partners unfairly protect their goods, we should call them on it and find redress in the World Trade Organization; in that context, a careful, tailored policy response might be justified, too. It is no excuse for America to begin cheating at the outset of the effort, or on a larger scale, which helps neither the environment nor, in the long run, the American economy.
The more realistic -- and politically fraught -- way to view the AU study is that all of this talk of how global warming efforts are all about, as House Speaker Nancy Pelosi once put it, “jobs, jobs, jobs and jobs” is irresponsible. No one can really know the net-employment effects of, say, cap-and-trade legislation with much certainty. Maybe financing wind farms wasn’t the best way to stimulate the economy.
A former colleague of mine, now The Economist’s Lexington columnist, puts it well in the magazine’s latest issue as he discusses the Cantwell-Collins climate proposal (which, by the way, the Post’s editorial page talks up today):
[The bill] challenges the conventional wisdom in Washington, DC, that the only way to pass a global-warming bill is to disguise what’s in it. Leading Democrats try to sell cap-and-trade as a way to create jobs and wean America from its addiction to foreign oil….In real life, though, voters hear counter-arguments. Sure, cap-and-trade will create jobs, but it will destroy them, too. If the goal is to reduce dependence on foreign energy, why not mine more American coal? The only sound reason for acting to curb global warming is to curb global warming.
| February 10, 2010; 11:35 AM ET
Categories: Stromberg | Tags: Stephen Stromberg
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