Green Economy Stillborn
Recent announcements about failing green companies have mostly flown under the major media radar. After all, when President Obama hops in Air Force One for a quick trip to a green business to make a speech about his administration's nonexistent energy policy that's worth covering—when that green business shutters its doors (after absconding with millions in tax credits) that's embarrassing, to green cheerleaders and the liberal media in general. Sadly, failure to revive the economy not withstanding, many actually believe that, if only we could provide more billions in subsidies, good green jobs would spring up like weeds. The reality is that green business cannot exists without government largess and that green economy we have heard so much about was stillborn—killed in its government funded womb by economic reality.
According to the Center for American Progress March 2010 report, clean energy will be one of the world’s biggest industries, totaling as much as $2.3 trillion by 2020. yet everywhere there are signs that the green economy is faltering before it has begun. For example, consider the case of Evergreen Solar, a maker of solar wafers for solar panels. In 2008, they made a courageous decision to promote green jobs in, of all places, Massachusetts. “In 2008 we decided to build a plant in Massachusetts to be near our research and development facility,” reported CEO Michael El-Hillow. “There was a groundswell of optimism that the U.S. was going to take the lead in the drive for alternative energy.”
But things soon went awry. Market conditions changed, the economy tanked and no one was interested in pulling Evergreen Solar's fat from the fire. Bottom line, Evergreen said its manufacturing cost was $1.92 per watt, while the selling price was $1.90 per watt—even a politician should be able to do the math. As reported to Bloomsburg Businessweek, El-Hillow summed things up this way:
One mistake was making the U.S. facility too large. We should have made it a quarter the size. I wrote to the governor of Massachusetts, and we went to everyone we could think of—Congress, our banks. Nobody could help us. Then, late last year, prices went down 10 percent in one month for the modules we sell—on top of steadily falling prices for the last three years. That left us no choice but to stop making panels in the U.S. and shift our focus to making wafers in China. The access to capital for startups there is staggering.
About 800 people in our U.S. factory will lose their jobs, but the company wouldn't have survived if we didn't make this choice. Now we'll focus on what we do best. If we had stayed here, we would have been insolvent by September. We needed to do this to survive, although my hope is that some day more jobs will come back here.
Adding insult to injury, the Massachusetts Economic Assistance Coordinating Council—the state board charged with overseeing the green tax breaks—unanimously voted to cut short Evergreen’s 20-year property tax break, originally estimated to be worth $15 million, and voided another $7.5 million in state tax credits after the company eliminated the hundreds of jobs it promised to create. According to a report in the Boston Globe, out of the $4.5 million in property tax breaks they received to date, Evergreen will only have to repay the current year’s value, about $1.5 million, and in addition to the property tax breaks, the now almost defunct solar manufacturer also received over $21 million in other grants. The fate of those funds is uncertain.
An isolated indecent? Hardly. The Destiny USA project in Syracuse, New York, was selected as a green "demonstration" project under the 2004 Green Bonds program. Senator Hillary Rodham Clinton Clinton, now the US Secretary of State, and Senator Charles Schumer helped to insert the program into the “American Jobs Creation Act” of 2004. It provided $2 billion in tax-exempt bonding authority for large green-technology demonstration projects and was specifically written to favor Destiny USA and three projects in other states (both Senators represented the state of New York).
Under this special program $255 million in tax exempt bonds were issued on behalf of the project. The money raised was supposedly for implementing the oodles of green features the project developer promised. To date, none of the green features have been implemented, and the developer says they never will be. From a report posted on syracuse.com:
There is no 45-megawatt electricity generating plant running on “biofuel” made from soybean oil and recycled cooking grease. If there were, it would be the largest such plant in the nation and consume more than one-third of the total U.S. biodiesel supply.
Nor are there 290,000 square feet of solar panels on the mall’s roofs and other surfaces, enough to blanket six football fields.
The fuel cells that were to make 7 megawatts of electricity, five times more than the nation’s largest existing commercial fuel-cell installation? Nowhere to be seen.
Given such grandiose plans, the backers should have suspected something was not on the up-and-up. In addition to the green features, the project was required to create at least 1000 construction jobs and 1,500 full time equivalent jobs to retain its tax free funding. Public monies squandered, no green features, no green jobs, and yet Clinton called the program “a strong, sensible piece of public policy.”
Destiny USA construction at Carousel Centre in Syracuse, New York, in September 2007.
This is not just a problem in the US, bungled government programs abound in the EU and elsewhere. One of Britain’s biggest employers in the green energy industry ceased production within hours of a government announcement pledging 400,000 green jobs by 2015. According to The Sunday Times, the Vestas factory in Newport, Isle of Wight, Britain’s only significant manufacturer of wind turbines, closed idling more than 600 people employed at the plant, and a related facility in Southampton.
Vestas is a Danish wind turbine manufacturer and one of the largest green companies in the world. Proving government stupidity is widely distributed, the Scottish government gave £10 million in grants to save 100 jobs at a much smaller turbine factory in Argyll just prior to the Vestas announcement.
Also last year, Vestas, announced the closing of five production plants across Scandinavia and cut 3,000 jobs—green jobs. The group said the surge in demand for wind power it had hoped for in Europe had not materialized and it is closing four plants in Denmark and one in Sweden, including one in Viborg where it has been manufacturing since 1989. The company is moving production out of Scandinavia to Spain, perhaps not the brightest of moves.
A Spanish study reports that since 2000, Spain spent $759,899 (€571,138) to create each “green job,” including subsidies of more than $1.33 million (€1 million) for each wind industry job. The study also calculates that the programs that created those jobs resulted in the destruction of nearly 110,500 jobs elsewhere in the economy. That means 2.2 jobs were destroyed for every “green job” created.
Vestas wind turbines at Meroicinha, Portugal. PhotoVestas.
In reality, green jobs are few and fleeting, and cost considerably more than true private sector jobs. Regardless, activists continue to push for green jobs—but this isn't really about building a clean, green economy. An example of such advocacy can be found on the website for the 2011 Green Jobs Conference, held this past February.
The tagline for this national conference was “good jobs, green jobs,” so one would expect to find numerous workshops on how to lure green industry to a community, how to start a green company and success stories from across the country. Instead, the lead workshop was entitled “Confronting Science Deniers: Lessons from Minnesota’s Sixth District,” a purely political propaganda vehicle for eco-leftists. Here is the description:
Across the country during this past midterm elections, clean energy supporters faced opponents who rejected the science of global warming and the potential for its solutions to create good jobs building the clean energy economy. This panel will focus on efforts to counter science deniers and to advance investments in clean energy as a positive economic agenda for the country. BlueGreen Alliance Executive Director David Foster will join Tarryl Clark — the former state legislator who challenged Tea Party favorite Michele Bachmann in Minnesota’s sixth district — for a discussion on how clean energy played a role in the 2010 elections.
This isn't about promoting green jobs or a green economy, it is anti-conservative political activism with a large dollop of climate alarmist balderdash. And this was not the only blatantly political topic. Other sessions covered the Gulf oil “crisis,” how wonderful new government regulations were going to force better fuel economy for large vehicles, and how to solve poverty, pollution and low union representation among truck drivers. There was precious little about how to make green business successful, and without successful green businesses there are no sustainable green jobs.
Until green jobs are about jobs, and the green economy is about economics there will be nothing but failed public programs that only enrich green scam artists. What green industry there is exists only because of government handouts and subsidies—make work projects that cost dearly and disappear as soon as government funding dries up. Time after time, program after program, governments have failed to create sustainable green jobs.
This all stems from not having a rational energy policy (also not a purely American problem). A cogent energy policy may well have salubrious effects on the environment and unemployment rates, even reducing those over-hyped CO2 emissions that global warming fanatics are forever prattling about (see “Why Global Warming is really an Energy Problem”). But being rational about energy has become even less likely in the aftermath of the Fukushima nuclear accident, with nations like Switzerland, Germany and Japan all reversing promising nuclear programs.
As politicians run for cover, like cockroaches when the light is turned on, energy policies founder. The only lucrative green jobs belong to those who travel the globe telling everyone about how great the new green economy will be; how green jobs will fix the world economy and rescue us all from penury. Just as the global warming/climate change/planetary boundaries scam has funneled public funds into the pockets of green con-artists, the green jobs scam enriches the ranks of transnational progressives, many of whom see the green economy as cover for their underlying agendas.
Meanwhile, Barrack Obama, that most politically correct of American presidents, continues to flog the fictional green economy, telling people that there's a great day a coming. But the Obama plan for a green economy has gone off the rails. It was supposed to bring energy independence—America is no more independent in its energy supply today than when Mr. Obama was elected. It was supposed to bring green jobs, jobs that “can not be sent offshore”—as we have just seen, when the economy sours the first jobs to go are green. It's time to wake up and smell the compost.
With the US economy possibly headed for a double dip recession and unemployment again on the rise, the time for such PC poppycock is past. Want good, green energy sector jobs? Build more nuke plants—they last for 25 years or more and provide steady high paying jobs while producing the energy the world needs. As long as green jobs mean political handouts the green economy will remain a stillborn monument to environmental delusions and political pandering.
Be safe, enjoy the interglacial and stay skeptical.