The Patrick Administration released its “Clean Energy and Climate Plan for 2020” in the final days of 2010, announcing a target of a 25 percent reduction below 1990 levels in greenhouse gas emissions by 2020. This target is a legal requirement of an earlier piece of legislation, the Massachusetts Global Warming Solutions Act of 2008, and is a first step toward an even more unrealistic 80 percent reduction by 2050.
Last Tuesday the City of Cambridge and others sponsored “Green Future 2020,” a public discussion of the plan, with City Councilors Seidel, Cheung and Davis in the audience. The leader of the panel was Dr. David Cash, our State Undersecretary for Policy at the Executive Office of Energy and Environmental Affairs. Dr. Cash repeatedly argued that advocating for “clean energy” was a better marketing strategy than the fight against global warming—er, climate change. It’s not a cynical ploy—Cash sincerely believes that pursuing green energy will not only address global warming, but will also bring thousands of green jobs to Massachusetts, and will save consumers billions of dollars.
It’s good strategy, but what if Dr. Cash is wrong? Is government spending on green energy really good for the bottom line? Evidence supporting this belief is scarce. Last year Spain pulled the plug on a large green jobs program after a study found the green job philosophy “terribly economically counterproductive.” According to the study, every green job created required an investment of $774,000 and cost Spain 2.2 other jobs due to increased energy costs. In Denmark the large-scale government-sponsored wind program has likewise been counterproductive, leading to significantly higher energy prices and increased use of fossil fuels, since solar and wind are intermittent sources that require backup generation.
Closer to home, our green jobs venture with Evergreen Solar ended in failure when Evergreen moved manufacturing jobs to China. This was quickly passed over by the Cambridge panel, with blame attributed to insufficient federal subsidies. Harvard professor Edward L. Glaeser wrote about Evergreen in the New York Times, maintaining that “it was always a mistake to think that clean energy was going to be a jobs bonanza.” Glaeser adds that “we should be investing in green technology whether or not it produces jobs.” I can go along with this idea, but we must weigh these “investments” against costs, rather take for granted that the State can shovel any amount of taxpayer money into green investments because it will come back with dividends. Nowhere in the Clean Energy Plan however do we find any mention of how much all this will cost Massachusetts taxpayers. It’s simply not part of the equation.
For example, Dr. Cash claims that 13,000 new jobs—adding 0.4 percent to the state’s workforce of 3.5 million–will be created in the “transportation” category. The report explains: “The vast majority of spending on motor fuel goes out of state, so reducing those expenditures by billions of dollars [by mandating vehicle fuel efficiency] means more money can be spent on in-state businesses, stimulating the economy and creating jobs.” But if lowering consumer costs creates jobs, it must follow that rising costs create unemployment. Where are the calculations for jobs lost from the increased tax burden from the various subsidies? What about the significant rises in local energy prices because of rate guarantees to wind and solar companies?
Notice further the concern about money going “out of state” in the above quote and elsewhere the report. Dr. Cash argues that clean energy will promote “energy independence” for Massachusetts. On a national scale, I’d like to see more domestic production and less importation of oil from unstable countries, but it is a radical form of protectionism to discourage interstate commerce. Massachusetts is one of the wealthiest American states because it spends $22 billion (6% of our $325 billion GDP) on Texas oil, Quebec hydro, and Sable Island natural gas, to keep our great biotech, high tech, health care and financial industries running. Should we also offer subsidies to bring in shoe manufacturers to avoid sending money out of state?
One can also question whether green energy subsidies are equitable. Are we taxing the middle class in Worcester to buy solar panels for the wealthy in Cambridge? Are we taxing the people who insulated their houses ten years ago to the benefit of the people who didn’t bother? Are we subsidizing hybrid cars on the backs of the less affluent drivers of 1995 Chevy Blazers?
Finally, the report claims that green energy will reduce “energy volatility,” which Dr. Cash said is worse than energy price increases. It’s true that price volatility poses problems for industry, but there’s a simple solution: NYMEX energy futures contracts. I guarantee you that people filling up their gas tanks and paying their electric bills don’t worry about volatility. We worry about high energy prices—which may well be a lasting legacy of the Patrick Administration.
Peter Wilson lives on Huron Avenue and is Secretary of the Cambridge Republican City Committee.