October 29, 2009 @ 6:18 pm
Via Max Schulz, a senior fellow at the Manhattan Institute, for The Daily News:
Mayor Bloomberg hyped his PlaNYC save-the-planet initiatives again last week, this time announcing an intention to double the city’s green-sector workforce by creating 13,000 green jobs. How to do this? In part by establishing Wall Street as the hub of the nascent international carbon permit trading market.
At first blush this sounds like smart planning. Why shouldn’t New York profit from our nation’s shift to a green economy? The mayor envisions thousands of carbon traders buying and selling the permits that private companies will need to participate in an economy governed by ever-more-stringent global warming regulations.
Turns out the Bloomberg green jobs plan isn’t all it’s cracked up to be. A focus on creating financial-sector carbon trader positions merely underscores the core criticism of green jobs: That they aren’t real employment a free economy would value enough to create on its own. The mayor’s ambitious plan depends on Congress passing a controversial cap-and-trade scheme to combat global warming.
That bill will cost the economy between $22 billion and $300 billion each year by various official estimates.
Think about that. The jobs Bloomberg touts are ones that will exist only by virtue of Congress passing an onerous and economically debilitating cap-and-trade bill. In much the same way that every new set of regulations brings more work for lawyers and accountants, cap-and-trade will require clerks and traders and other functionaries to ensure the smooth operation of a scheme the market neither wants nor values.
And even though the mayor predicts green jobs will be a driver of future economic growth, these are not jobs that create true wealth. A scheme that requires hiring carbon trading financial mandarins might benefit Wall Street, but it won’t signify a healthy economy. On the contrary, these would be jobs that simply shuffle resources around in an ever-costlier game rigged by politicians and regulators.
One suspects that, down deep, the mayor himself realizes as much. How else to explain what he said about cap-and-trade two years ago? At the 2007 United Nations conference on climate change in Bali, he announced that he prefers a carbon tax over cap-and-trade, which is flawed because of vulnerability to “special interests, corruption \[and\] inefficiencies.”
Carbon trading “is attractive to many politicians because it doesn’t have that three-letter word ‘tax,’ ” Bloomberg told reporters. “But it’s a very inefficient way to accomplish the same thing that a carbon tax accomplishes.”
Give Bloomberg credit for candor in Bali. A cap-and-trade system for limiting carbon dioxide emissions has already been instituted in Europe. It has largely failed to curb CO2 emissions from member nations, though it has given rise to higher costs and massive corruption from politically connected industries gaming the system. The mayor is right to suggest that we don’t really want to replicate Europe’s botched approach.
If only Bloomberg would extend such skepticism to other elements that make up PlaNYC’s agenda. Much of it hinges on his assumption that “green energy is going to be the oil gusher of the 21st century.”
Except it won’t be. The oil strikes in Pennsylvania and Texas were a big deal because the free market wanted oil – first for illumination and then for transportation. The market doesn’t want costly and unreliable green energy; politicians do. That’s why they create artificial markets for it. Government action like cap-and-trade might succeed in “creating” green jobs. But let’s not confuse it with economic vitality.