Wednesday, May 25, 2011

This Day in California's Green Jobs Delusion

Today's example of comically uncritical acceptance comes courtesy of Rick Daysog and the Sacramento Bee: in this piece, Daysog parrots the absurd claims of Next 10 (a non-profit organization dedicated to promoting renewable-energy technologies) regarding the economic benefits of tougher fuel economy standards. According to Next 10's latest analysis, the new standards will create 236,000 jobs in California by putting more electric, hybrid, and otherwise-efficient cars on the road.

Where they get this figure is unclear. The California Air Resources Board, the EPA, and the National Highway Traffic Safety Administration are currently working on standards that would apply to cars built between 2017 and 2025, but they won't announce their recommendations until September; the agencies are said to be considering rules that would cut emissions by 3%-6% per year. Next 10's argument is, essentially, that fuel efficiency creates other economic efficiencies: according to the report's author, Berkeley professor David Roland-Hurst, "Efficiency fuels growth by saving consumers and businesses money and allowing them to spend it on things they really want." Just another nugget of brilliance from the "experts" in academia.

Let's look at what they're leaving out. For one, the savings associated with using a more fuel-efficient car evaporate if you relax Next 10's assumption that gasoline will cost $4 a gallon for the foreseeable future. Even setting this aside, it's not clear that electricity prices won't be just as volatile as gas prices in the future: if the state shuts down nuclear power and its various green-energy boondoggles don't pan out, it could experience skyrocketing electricity costs. How this would be anything other than catastrophic for economic growth isn't clear to us, and having half the state driving electric cars wouldn't help. Next 10 also assumes that people are willing to account for hypothetical future savings in purchasing very expensive cars; the Chevy Volt goes for roughly $40,000, making it far more expensive than any car we've ever owned. Moreover, since carmakers will likely need to devote considerable resources to developing cars that comply with the new mandates, and will likely pass the costs onto consumers, the mandates will almost certainly make all new cars more expensive. The report also doesn't mention the lost productivity associated with driving less-powerful cars and trucks. And don't get us started on the massive investment in charging stations that would be required to enable widespread adoption of electric vehicles; these costs would almost certainly be paid by taxpayers. All of these things will be a drag on economic progress.


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