Given the collision of two crises, one economic and the other environmental, our leaders need to understand their priority both in terms of relative importance as well as urgency. Politicians wanting to claim the high ground of concern on the global climate issue, without actually supporting it, were given perfect cover by the financial crisis which enabled them to say, “Of course we want to act on the climate issue, but we must put our economic house in order first.”
Countering that is the Green Jobs argument, which says we can fix the economy by addressing the climate change issue in a concerted way.
The biggest proponent of this approach is Van Jones, the author of The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems. Jones was appointed as a green jobs adviser to President Obama’s Council on Environmental Quality, before he was drummed out by conservatives outraged over some left-leaning skeletons in his closet.
Opponents of green jobs programs argue against too much government intervention in the marketplace, saying the market itself, not the government, is best qualified to determine what the “next big thing” will be.
The motion being debated was whether, “Creating green jobs is a sensible aspiration for governments.”
The moderator, and Economist Energy and Environment editor, Oliver Morton, said in his opening remarks, “That government investment, subsidy and regulation can produce green jobs is not in any doubt…The question is whether those jobs represent a net benefit, or whether they are being created at the expense of other jobs elsewhere in the economy.”
Morriss lists several reasons why he feels that creating green jobs should not be a government aspiration, the first being the example of corn ethanol. Any subsidy program for green jobs, he argues, will draw special interests claiming that they are creating green jobs, “like a picnic draws ants.” While that program was good for corn farmers in Iowa and for Archer Daniels Midland, it turned out not to be very green, though it was very expensive. It also raised corn prices around the world creating shortages in the food supply. How do you decide what’s green; for example, “is nuclear power green?” A lot of environmental groups say no, but Obama says yes and right now big subsidies and loan guarantees are on the table.
Morriss says that green jobs forecasts are based on shaky assumptions and he argues that we simply don’t know enough to predict which energy sources will ultimately become dominant. In 1870, “Coal heated people’s homes, natural gas provided light, electricity had little practical application and gasoline was a waste product from kerosene refining… No one in 1870 would have predicted” the way the energy picture has developed. “We know as little about our energy future as our predecessors did about theirs.” Looking forward to future markets, he says, “That is what entrepreneurs do best. We should let them do it.”
Jones agrees that the private sector must be the driving force in green job creation. He cites John Doerr, who calls clean energy, “the largest economic opportunity of the 21st century.” But government must and should be involved as an active partner, because of the natural alignment of outcomes which includes revitalized infrastructure, neighborhoods, factories and innovation. He then deflects concerns about government’s tilting of the playing field by pointing out the enormous subsidies that existing energy providers already receive. “The precise mix of energy sources being developed and deployed within a country is never the result of pure market forces, but always a result of both private and public choices. It reflects a mix of innovation and investment on the one side, and of regulation, taxation and subsidy on the other.” And furthermore, “Because we place no value on our atmosphere, the market acting alone cannot achieve the public interest in a stable climate and human health.” Which is why, “Public policies are now necessary to correct existing market failures and put clean energy on an even playing field with fossil fuels.”
The dividing line between the private and public sectors will always be a contentious one. But we need to keep in mind that the stated purpose of government is to provide safety and security and a certain amount of order so that everyone else can go about their pursuit of happiness without bumping into each other, or causing harm to others or being harmed by forces from outside our borders. This is what is known as the public interest.
One example of where the interplay between the government and business can be seen to reasonably good effect is our road and highway transportation system. Cars and trucks are produced by companies that are, or were at least until recently, entirely in the private sector. These manufacturers are free to innovate any way they want, as long as the cars ultimately meet safety and emission standards. The roads and bridges are built by private sector jobs, to government standards and with government funds. Finally, the signs and traffic signals and the enforcement of traffic laws are provided by government. It’s far from a perfect system, but the balance is there, and considering how dangerous automobiles are, it could be an awful lot worse if it were simply each man for himself.
At the same time, in an increasingly globalized world, the question of national security is becoming as much an economic matter as a military one. Many of the clean energy technologies being used today were invented here, but the jobs building them are going overseas. Our government may or may not see the creation and retention of jobs as part of their national security mission, but it’s quite clear that other governments do.