Will Mandates Create “Green Jobs”?

Yes, to answer the question posed by the title, the state can mandate the creation of “green jobs” via alternative energy mandates – just as it could mandate that utilities dig hole, and then fill them up, creating “brown jobs”.

A new study, commissioned by the Community Foundation for the Alleghenies, claims that expanding alternative energy mandates through HB 80 will boost the economy and create jobs.

However, these claims are based on a host of shaky assumptions. Namely, the study assumes passage of federal “cap and trade” legislation that would make traditional energy more expensive, and assumes federal and state subsidies for alternative fuels.

The authors also fail to recognize any substitution effect, ignoring that when companies are forced to engage in certain activities, and consumers are made to pay more for electricity (through higher rates or government mandates), they will reduce spending elsewhere. That is, how many jobs will be “destroyed” to create “green” jobs? Furthermore, alternative energy isn’t even a new product, adding to GDP, but represents the replacing of one form of electricity with another.

The insistence that alternative energy mandates will both create green jobs and lower costs is economic ignorance. While the 31% increase in electricity costs could be offset by an increase in low-cost renewable generation, over half of the renewable energy jobs cited are temporary construction jobs.

Another interesting finding is that the claim that PA theoretically has enough
renewable energy potential to satisfy electricity needs, however, the majority of this potential is, “from relatively high cost solar.” The study goes on to acknowledge that solar is not a cost-effective renewable technology.

If alternative energies are so cost-effective and are the future of our economy, there is no need to both subsidize and then mandate these energy sources.