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Rough times for ''Carbon Communism''

Posted on Apr. 01, 2009

The global warming industry had a bad week at the end of March. The month that entered like a lion – with snowstorms mocking (and greatly reducing the ranks of) an act of mass “global warming” civil disobedience – came to a close with sheepish expressions all around the Kyoto II preparatory talks which kicked off in Bonn.

These actions were to pave the way for a Kyoto II treaty that the U.S. is universally expected to agree to this December in Copenhagen but which, it has now become clear from all quarters, President Barack Obama has no intention to embrace. It remains unclear just what clever plans he has to substitute for the anticipated treaty which of course would never received the necessary two-thirds Senate approval, but the big-ticket item now requires some fancy rhetorical footwork.

The bad news didn’t stop there. The alarmists’ domestic brass ring, a carbon dioxide rationing scheme, and one bearing the added benefit of funding massive social engineering by grabbing all of the revenues for the state, fell out of the Obama budget. That potato became a little too hot when even Pravda the former newspaper of the Soviet Union, began complaining of the “carbon communism” of U.S. elites.

Then, as if jettisoning this massive new revenue source weren’t insult from Congress enough, California Senator Diane Feinstein joined with the Greens to oppose a large solar power plant in the Mojave Desert. It seems a particular tortoise might experience anxiety if intermittent, expensive feel-good measures are located near its home. To which erstwhile green hero Governor Arnold Schwarzenegger replied, “If we cannot put solar power plants in the Mojave desert, I don't know where the hell we can put it.”

Possibly the Governator was snippy because of the contemporaneous news that he wants his money back for the electric car he purchased, because he isn’t able to climb in and out of it. Which is perfectly analogous to “green” energy on any scale: like windmills, which we know can’t go up anywhere birds or bats fly or Kennedys live, you don’t put these solar plants anywhere, Arnold, you just wistfully pine for their deployment. Near other people. Apparently, on other planets.

And that’s probably a good thing, because the end of March also saw a devastating report from academics and energy industry experts in Spain, the land of Obama’s model for the new American “green jobs” economy. In a paper published by the economics department of Madrid’s King Juan Carlos University, a brace few dared speak up to note that the green jobs emperor is stark, raving naked.

Gabriel Calzada was lead author of an analysis of the economic miracle that we are told we will now import here and for which the new administration has already grabbed billions of your, your children’s and your grandchildren’s money. It is now unfair to simply criticize that money as wasted. It is also highly destructive.

What Calzada (who, for full disclosure, I consider a friend) found, with the assistance of the former chief of Spanish operations for the German utility RWE, is sure to cause discomfort among Enron’s successors pushing for these schemes, prowling the halls of Congress seeking hundreds of billions in rents – requiring increased taxes and causing increased energy costs – for their uneconomic pets. Here are some of the highlights:

• Based upon the Spanish experience that President Obama expressly cited as a model, if he succeeded in his (oddly floating) promise to further intervene in the economy to create 3 million (or is it 5 million?) “green jobs,” the U.S. should expect to directly kill by the same programs at least 6.6 million (or as many as 11 million) jobs elsewhere in the economy.

• That is because green jobs schemes in Spain killed 2.2 jobs per job created, or about 9 existing jobs -- I'll call them "real" jobs -- lost for every 4 that are created. The latter, the study shows, then become wards of the state, dependent on the continuation of the mandates and subsidies, subject to the ritual boom and bust of artificially concocted jobs (read: ethanol).

• The existing jobs most harmed were manufacturing jobs, of basic iron and steel products, basic chemical products, plastics, manufacture and first transformation of precious metals, as well as producers of cement, lime and plaster.

• This does not include jobs lost due to redirection of resources, but are only the jobs directly killed by the scheme.

• The study calculates that since 2000, Spain spent more than $750,000 (at current exchange rates) to create each green job, including subsidies of more than $1.3 million per wind-industry job. They are that uneconomical.

• Each green megawatt installed destroys 5.39 jobs on average elsewhere in the economy. The partial breakdown is as follows: 8.99 by photovoltaics, 4.32 by wind energy, 5.84 by mini-hydroelectric.

Calzada informed me that, as the study was being finalized, the European Commission, left-wing media and communist trade groups had all gotten wind of it and let him know of their displeasure. It seems that gravy trains of squandered billions, funneled to well-positioned interests, is the kind of thing that some people don’t want exposed.

They have reason to be worried. This study – apparently the very first critical analysis of the actual performance and impact of the mythologized EU and Spanish programs – notes how, on top of all of the above-cited downsides, the price of a comprehensive energy rate (paid by the end consumer) in Spain would have to be increased 31 percent to begin repaying the historic debt generated by the rate deficit mainly produced by subsidies to renewables. That, by the way, is according to Spain’s energy regulator.

Yes, it was a very bad month for “carbon communism” and the global warming industry. As the public becomes more educated about these matters, the good news is that the months should only get worse.

Chris Horner is a senior fellow at the Competitive Enterprise Institute.


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