Green Job Creation

An article in Reuters, finds that California voters are divided on a ballot measure that would suspend a global warming law until the state's jobless rate falls to 5.5 percent for a year.
Those in favour of the suspension claim that the Global warming Act to reduce emissions will cost jobs in California. Opponents argue that the act will boost the economy and help create green jobs.

In a recent blog, passing wind, we explained that switching to green technologies can and did induce job creation in the UK. Economics 101 tells us that government investment, subsidy and regulation along with technological change can produce green jobs, resulting in a rise in the employment level. Where there is a market in going green, there is a demand for labour employed.
Germany’s renewable energy sector for example now employs more than a quarter million people. Similarly, Spain has also benefited by job creation as a result of their green sector.

It is important to know whether these new green jobs represent a net benefit to society or whether they are being created at the expense of other jobs elsewhere in the economy. Green jobs created by government intervention have opportunity costs; subsidy money or advertising money could have been spent elsewhere in other sectors. Do these green investments allow specific jobs to be created in a way that has social value?
For us, the answer is of course yes. We think policy can be a driver of innovation rather than an impediment, and it is helping to push the private sector into green job creation. Solar panels don't put themselves up. Wind turbines don't manufacture themselves.

Perhaps the Californian critics are unaware that all forms of energy are heavily regulated and often subsidized. Energy sources being developed and set up within a country is hardly the result of pure market forces, but rather a result of both private and public choices. It reflects a mix of innovation and investment on the one side, and of regulation, taxation and subsidy on the other.