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April 16, 2010

A Clean Energy Economy Is A Weak Economy

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We're hearing a lot these days from the nation's capital about the coming "clean energy economy" and all the green jobs we'll get out of it. If truth-in-advertising laws applied to politics, however, you'd have to replace the word "clean" with "costlier" - which is why this agenda is actually very bad news for jobs and the economy.

In his State of the Union Address, President Obama said that "the nation that leads the clean energy economy will be the nation that leads the global economy." He warned that America's global competitors are already "making serious investments in clean energy because they want those jobs."

Following the president's cue, Congress is now working on a number of bills calling for new global warming measures and bigger subsidies for their favorite alternative energy sources - all marketed as clean energy initiatives. It all would come on top of the billions in "stimulus" money already being poured out for clean energy projects.

Too bad Washington is pursuing proven jobs killers. Take wind energy, perhaps the most politically correct energy source right now. The president has repeatedly visited wind turbine factories, boasting about the green jobs at each. Washington has heavily subsidized wind energy along with solar and other alternatives, and is now considering a law that would force electric utilities to use more of them.

Yet wind power is tremendously expensive. That's why it needs billions in federal handouts in the first place. These handouts siphon tax dollars and jobs away from other parts of the economy. And the costlier electricity that results destroys additional jobs, especially in the manufacturing sector.

The president frequently mentions Spain as a model. Yes, Spain already has a clean energy economy, with thousands of wind turbines and solar panels covering the landscape. It also has 19 percent unemployment, nearly twice the U.S. level.

A study conducted by Gabriel Calzada, economics professor at the King Juan Carlos University in Madrid, estimates that for each green job created, 2.2 other jobs are killed.

Spain's clean energy economy is not without its successes - if you include American pork. In 2009, Spanish energy company Iberdrola received $546 million in stimulus money from the U.S. Treasury. It expects to get an additional $470 million this year to install more windmills in America.

Ethanol, another highly hyped "clean" energy source, has already been a costly flop. Thanks to a Bush-era law, nearly 13 billion gallons of corn-based ethanol and other so-called renewable fuels have to be mixed into the gasoline supply this year. Ethanol increases the pain at the pump, and the diversion of nearly a third of the corn crop from food to fuel use has raised the price not only of corn itself but of related items like corn-fed meat and dairy.

Granted, this policy has enriched corn farmers and created some jobs in the ethanol industry, but at a steep price for the rest of us. Beyond the phony economic boost, the clean part of the clean energy economy may be a mirage as well. Many environmentalists have turned against ethanol, now claiming that it causes even more emissions than the gasoline it supplants.

Across the country, green groups routinely sue to block wind farms on various environmental grounds, including bird and bat deaths caused by the spinning blades. Worst of all, costly global warming legislation addresses what is increasingly looking like an overhyped environmental threat. The clean energy economy is turning out to be an environmental loser as well as an economic one.

American ingenuity can create great things, including energy breakthroughs - but not when politicians and bureaucrats are telling the private sector what to do. Too much of the clean energy agenda involves Washington experts picking winners and losers among energy lobbyists. The rest of us have to live with their costly mistakes.

Ben Lieberman is a senior policy analyst in Roe Institute for Economic Policy Studies at The Heritage Foundation.

First appeared in The Olympian

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