The Economist has just launched a new online debate on the proposition that “creating green jobs is a sensible aspiration for governments.” Van Jones, President Obama’s former special adviser on green jobs, argues in favor; Andrew P. Morriss, a Professor of Law and Business at the University of Illinois law school, presents the counter-argument. The real debate over green jobs programs is whether they really create new jobs or simply divert jobs from existing industries to new ones, and whether the social and economic benefits of creating these jobs outweigh the cost. Here is my contribution to the debate:
There are so many flaws in the interventionist argument it’s hard to know where to begin. It should by now be apparent that governments do not and cannot create jobs in the private sector. The only jobs likely to be created by massive government green jobs programs would be in the government agencies charged with implementing and regulating those programs. Van Jones cites Silicon Valley as an example, but apart from the U.S. government creating the initial version of the Internet for defense purposes and providing grants to universities, the entire IT and Internet boom was almost exclusively the result of private initiative.
Governments essentially have two choices: they can create a hugely expensive bureaucratic and regulatory system (corporate fuel economy regulations for car companies are a clear example) in which smart lawyers and accountants will immediately find loopholes, or they can use a much simpler set of incentives that will prove more effective and cost much less to administer.
A carbon tax, for example, by reducing the cost disadvantages of alternative energy sources, would provide a clear incentive for investors and innovators to come up with new, green technologies, which might in turn create hundreds of thousands or millions of “green” jobs. Accompany the carbon tax with abolition of most of the regulations and subsidies that favor some technologies (coal, oil, corn ethanol) over others,and the market can do most of the rest.