Say hello to Green Jobs, the new sub-prime

Dominic Lawson has an interesting article at The Times on the concept of ‘green jobs’ commencing with these comments:-

When everybody seems to have the same big idea, you just know it can only mean trouble. Remember sub-prime mort-gages? Now universally excoriated as the spawn of the devil, the proximate cause of the credit crunch and all that followed, a few years back “sub-prime” was everyone’s darling. Financiers loved it because it generated sumptuously high-yielding debt instruments; governments, because it promised to make even the poor into proud property owners.

Now business lobbyists and governments on both sides of the Atlantic have got a new big idea. They call it “green jobs”. Leading the pack is, as you might expect, Barack Obama. The president recently defended a vast package of subsidies for renewable energy on the grounds that it would “create millions of additional jobs and entire new industries”.

As Adam commented an interesting piece, especially as it has additional commentary on Gordon Brown’s continuing wayward way with numbers.

He noted a Brown pledge to give everybody Pds5000 of the price of electric cars, a totally ridiculous flight of fantasy as Lawson notes:-

That remarkable prime ministerial pledge predated the recession; its motive was to demonstrate that Britain was “leading the world in the battle against climate change”. We aren’t, as a matter of fact; but under new Labour we have certainly led the world at claiming to do so. Mandelson expressed this almost satirically last week when he declared that “Britain has taken a world lead in setting ambitious targets for carbon reduction”.

As ever, new Labour confuses announcements and newspaper headlines with real action. Whenever it becomes obvious even to ministers that Britain will not meet its current carbon reduction target, they replace it with a yet tougher target, only with an extended deadline.

Now does that comment not seem somewhat reminiscent of our own dear SuperHelen. Indeed SupeHelen won an award for world leadership on dealing with climate change whilst doing precisely nothing. Now did she learn from Gordon, or Gordon from her?

Lawson debunks as well some of the supposed environmental benefit of electric cars.

This comment was one of his best:-

Electoral bribes apart, there is a more serious misconception behind the idea that ploughing subsidies into the “green economy” is a sure-fire way of boosting domestic employment. At best it will move people from one economic activity to another. Labour’s plans would subsidise car production workers to move from making conventional models to electric vehicles, which hardly anyone wants to buy. Osborne’s proposals would subsidise the double-glazing and home insulation industry and suck in many workers gainfully employed (without subsidy) elsewhere.

The key to a successful, wealth-generating economy is productivity. Saving energy is what businesses have done already, because it lowers their production costs. The problem with any form of subsidy is that it makes the consumer (through hidden taxes) pay to keep inherently uneconomic businesses “profitable”. Meanwhile, diversified energy companies such as Shell, with plenty of speculatively acquired wind-farm acreage, are salivating at the plans by Obama to introduce cap-and-trade carbon emissions targets for American industry.

As Adam has believed for many years, economic advantage and competition will drive business to promote savings, where legislation will just promote inefficiency.

Watch out for signs of this in NZ. He thinks he has had Russl Norman burble about green jobs.

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