President Barack Obama's plan to kill jobs

COMMENTARY Environment

President Barack Obama's plan to kill jobs

Mar 3rd, 2015 2 min read
David W. Kreutzer, Ph.D.

Senior Research Fellow

David Kreutzer researches and writes about labor markets and trade.

Any Wisconsinites starting to wonder whether they are living through The Long Winter as described by Laura Ingalls Wilder, will find no comfort in President Barack Obama's plans to cut the use of our most affordable and reliable sources of energy. Though we may not be relegated to heating our homes by burning twisted bundles of straw, the president's plans to restrict use of our most economical fuels will not only increase the costs of driving, heating and lighting, they will reduce incomes and kill jobs. For Wisconsin, it works out to 20,000 fewer manufacturing jobs by 2023.

How so? Natural gas, petroleum and coal provide nearly 80% of all energy used in the United States. Despite large subsidy-and-mandate-driven growth rates, wind and solar satisfy only about 2.5% of our energy needs and do so at higher cost and with intermittent supply. And therein lies the problem. Eliminating conventional energy makes us pay more and get less. There are no magic wands here.

When energy is more expensive, consumers spend more on it and less on other things. And producers must pay those higher energy costs as well. That raises the costs of lawn mowers, blenders and every other product people may want at the same time those people (i.e., the aforementioned consumers) have less to spend on those things. So, guess what? Fewer lawn mowers and blenders will be sold; and it takes fewer employees to make those lower quantities.

Researchers at The Heritage Foundation used a clone of the Department of Energy's big energy model and estimated the economic impact of the Obama administration's broadly stated carbon targets. What we found is that, for Wisconsin, "fewer" means 20,000 lost manufacturing jobs. And this is after accounting for any increases in jobs manufacturing no-carbon or low-carbon substitutes and any gains from increased energy efficiency that the higher energy prices induce. That 20,000 figure is the net job loss.

There are those who say (however indirectly) that those 20,000 newly unemployed workers need to take one for the team to prevent climate catastrophe. There are a couple of Grand-Canyon-sized holes in this argument. First, the associated claims of increasingly extreme weather are not borne out in the data kept by our own National Oceanic and Atmospheric Administration nor even by the Intergovernmental Panel on Climate Change's data keepers. There just aren't any upward trends in hurricanes, tornadoes, droughts or floods. Nor is sea-level rise accelerating.

Extreme weather events have been with us since there was us, and they will almost certainly continue regardless of rules from Washington, D.C.

Second, cutting our emissions by even 60% (we are not on track for that) would moderate world temperatures by less than a tenth of a degree Celsius by the end of the century. Throw in a 60% cut from the rest of the developed world and any increase is cut by less than two-tenths of a degree. So to the 20,000 lost Wisconsin manufacturing jobs add those from the other 49 states, Canada, Japan, all of Western Europe, and the impact still would be an amount nobody could detect without a very accurate thermometer.

If the lost jobs don't buy us much on the global-warming side, wouldn't we at least get cleaner air? Since CO2 is colorless, odorless and nontoxic (and helpful to plant growth) we need to look at conventional pollution. The air has gotten cleaner even as energy production has risen dramatically. According to the National Energy Technology Laboratory, modern coal power technology cuts emissions of nitrous oxides by 86%, of sulfur dioxides by 98%, and of soot by 99.8%.

If you want to, go ahead and worry about your own carbon footprint, but let's not have Washington use its regulatory footprint to stomp out 20,000 manufacturing jobs in Wisconsin for no good reason.

 - David W. Kreutzer is the research fellow in Energy Economics and Climate Change.

Originally appeared in the Milwaukee Journal Sentinel

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