As I wrote back in 2007, “Investing in renewable energy will provide a clean source of power and create an explosion of new jobs. In late September , this claim attracted the attention of the U.S. Senate Energy and Public Works Committee and its chair, Democratic California Sen. Barbara Boxer. The prospects sound good but the committee got only half the story. Estimates of just how many jobs our push to go green may generate vary widely, but not all economists believe that there really will be any kind of green-job boom. More important is the question of whether these supposedly new jobs simply displace existing jobs or are make-work schemes to transfer wealth. Will they help improve our productivity and prosperity? Unfortunately, the likely answer is no.”
The myth of a green jobs boom sits at the heart of the rosy economic analysis by the Air Resources Board of its AB32 scoping plan as well as the President-Elect’s economic stimulus plan. Leaders need to recognize that reduced productivity–including spending more more capital and more labor for a given output (such as a kilowatthour of electricity–is never the way to improve economic conditions.
The venture capital world, once counted on to fund the green jobs boomlet, may be having second thoughts. Venture-capital investments into clean technologies such as solar energy doubled in 2008 to $7.7 billion, according to a report released Monday by Greentech Media, but a small decline in investment totals from the third to fourth quarter could signal a much slower 2009, some experts say. The past year “marks the end of the beginning,” said Erik Straser, a partner with Mohr Davidow Ventures in Menlo Park. “(It’s) an end to the first few years of investment enthusiasm.”