Go green, go broke
by Peter Smith
June 3, 2011
When I was a child ships were still being built on Merseyside in England. Then it all disappeared and went to Japan. Robert Scott estimates that 2.4 million US jobs were lost to China between 2001 and 2008 (Economic Policy Institute, March 2010). What does all this mean? One thing it means is that that the production of any particular product tends to be concentrated; not evenly spread throughout the world. Way back in 1817, English economist, David Ricardo explained it by showing that products tend to be made where they can be made comparatively cheaply. For example, it turned out that ships could be built faster and more cheaply in Japan than on Merseyside. This represents a powerful economic force that in the end result simply can’t be resisted; except, apparently, when it comes to green jobs.
One difficulty in discussing green jobs is in knowing exactly what they are. Do I have a green job if I move as a maintenance engineer from a coal power station to a gas power station? I know that I have a green job if I work for a windmill power station but presumably not if I work for a nuclear power station, even though it produces no carbon dioxide emissions. Now a gas power station saves more emissions, when compared with coal, than an array of windmills because it produces so much more energy. So maybe gas is greener than windmills? Perhaps it depends on where I worked last. I have a green job if I move from brown to black coal but not a green job if I move from gas to black coal. I assume if I help produce solar panels and windmill parts or electric cars that I have a green job, but is this still the case if I use energy from brown coal to produce them?
What other green jobs are there? I don’t know; what I do know is that most countries see them providing a bountiful future. Cutting CO2 emissions, apparently, is the key to prosperity. If only we had thought of this earlier. It is worth thinking about what else might be cut, what other obstacles we can artificially place in the way of our competitive industries to create even more jobs and make us even richer still. But let’s leave that aside while enjoying the fruits of this obstacle.
According to David Cameron, an agreement forged with India to cut CO2 emissions will create million of jobs and moreover “we will position the UK [as] a leading player in the global low-carbon economy, creating significant new industries and jobs”. Not to be outdone by an old adversary, Mrs Merkel announced that we “can be the first major industrialised country that achieves the transition to renewable energy with all the opportunities – for exports, development, technology, jobs – it carries with it”.
But these two are Johnny-come-latelies. Barack Obama promised 5 million green jobs over ten years back in 2008. In fact, it is hard to find a government that isn’t spruiking green jobs. The Indian government said it was “laying enhanced focus on creation of green jobs”. French President Nicolas Sarkozy’s recently predicted that France would generate 600,000 green jobs by 2020.
Even Scotland and Greenland are in on the act. According to the Scottish National Party government, Scotland’s future will be full of new jobs based on clean energy; 130,000 of them over the next nine years. The government of Greenland (appropriately I suppose) promises hydropower as a “good and green export commodity”; though, to the chagrin of Greenpeace, drilling for oil sort of blackens their outlook. I had nearly forgotten Ms Gillard who recently wrote that we “want to stay in step with the world so we can capitalise on the clean-energy jobs that come with this new future”.
None of these leaders and governments has seemingly heard of David Ricardo. Paul Howes put his finger on it in February of this year. He was reported as complaining about the Chinese – shades of Donald Trump – saying that China is emerging as the dominant supplier of certain green technologies, “from wind and solar energy products to advanced batteries and energy-efficient vehicles, costing otherwise efficient Australian companies and workers the green profits and high-skilled jobs of the future”.
He blamed this on the Chinese illegally protecting their industries, but that is mostly bosh. China and perhaps India and other emerging Asian countries are likely to monopolise the manufacture of green technology products because they will be able to do it more cheaply (including by using coal energy). There will be no bounty of green export jobs in the US or in Europe or in Australia We are being sold down the river by our own leaders and, worse, while being told condescendingly that it is for our own good.
In the past, old jobs were destroyed, and people left behind, as they were on Merseyside, because of the hard reality of economics. This is not the case now. Old jobs will be destroyed in the West and people left behind, and painful adjustments required, because of self-inflicted harm based on tendentious computer predictions of the weather. It is not believable, yet it is happening. The Chinese must be loving it. They even have people like Greg Combet complimenting them on their emission-saving efforts, while they pump ever increasing amounts of CO2 into the atmosphere and sell us, and everyone else, solar panels and windmill parts made using energy from coal that we supply. Go figure. I have tried but it gives me a headache.