Winnipeg: The Frontier Centre for Public Policy today released Green Jobs: The European Experience. This policy study provides an analysis of the European experience with government efforts to bolster economic performance through government spending on “green energy” development and “green job” creation. Many politicians and activists in Canada champion the benefits of green technology and government spending on green job creation as a strategy for alleviating unemployment and spurring economic growth. This study demonstrates that these expectations clash with both economic theory and practical experience in Europe. The authors find that “green jobs” created by government spending and subsidies merely replace jobs in other sectors and actually contribute less to economic growth.
Authors Dr. Kenneth Green and Ben Eisen write that the European experience with green job creation efforts has been a series of failures, and that central planners in Canada trying to promote green industry will fare no better at creating jobs or stimulating the economy.
Dr. Green and Mr. Eisen examine the results of ambitious efforts to create jobs and spur economic growth through government spending on green energy development and Europe. The authors conclude that in Spain, Italy, Germany, Denmark, the United Kingdom and the Netherlands, “green jobs” programs have not benefited the economy and have actually caused significant economic harm. Some specific key findings from the study are:
- Green programs in Spain destroyed 2.2 jobs for every green job created.
- The capital required to “create” one green job in Italy could create nearly five new jobs in the general economy.
- Wind and solar power have raised energy prices by 7.5 percent in Germany, creating a drag on economic performance.
- Denmark, another big spender on green energy, has the highest electricity prices in the European Union.
- Experiments with renewable energy in Europe have led to net job losses, higher energy prices, and widespread corruption.
“The idea that governments can create jobs by spending money developing the green energy sector is based on an economic fallacy” said the study’s co-author Dr. Kenneth Green. “Governments don’t create jobs this way. What they actually do is shift jobs, by draining capital out of other industries and destroying jobs in those areas. The evidence from Europe shows that for every new job that exists because of government spending on green energy subsidies, at least one job, and usually more than one, is eliminated elsewhere in the economy.”
Mr. Eisen advises Canadian policymakers to learn from the European experience. “In Canada, we’re often told by activists and politicians that certain types of government spending programs and subsidies can create thousands of new jobs and improve economic performance. The same promises were made in Europe before they embarked on these types of programs, and they just haven’t come true. Overreaching government manipulation of the energy market has been an economic disaster in Europe. Canadian central planners are no closer to being omniscient than their European counterparts, and that’s why similar programs would be likely to fail here as well.”
Download a copy of Green Jobs: The European Experience HERE.
For more information and to arrange an interview with the study’s lead author Kenneth Green, media (only) should contact:
Dr. Kenneth Green
American Enterprise Institute