The Truth About Green Jobs and California, A Review of the Costs, Risks and Trade-offs of Green Job Policies

Many within the media, academia and the economic development communities have expressed enormous enthusiasm about the prospects for green jobs as a result of strong environmental legislation. Indeed, many claim that increased environmental regulation is a key to a newfound prosperity. In this paper, we try to sort these claims out and separate the truth from the hype. One issue is defining a “Green Job.” Since data are collected in a way that makes it difficult to identify green jobs, researchers tend to classify certain industries as “Green.” This necessarily requires either grossly underestimating the positive impact of green jobs, if one is too selective, or grossly overestimating them if too inclusive. Not surprisingly, given the current political climate, the tendency is to be inclusive. In any event, until there is agreement on the definition, and actual data, results are difficult to evaluate and compare. We approach the issues from several directions. We look at the experience of other countries. We look at the results across the United States. We critically review several selected technical-but-not-academic papers. We review the academic literature. Finally, we provide a theoretical model of economic growth through regulation. The most enthusiastic proponents of man-caused global warming accept it as a certainty that will drive policy for the coming decades. For many others, perhaps a growing number, this assumption is much less certain. We tend to identify global warming as a possibility that policy makers need to consider seriously over the mid and long-term. Minimizing the risk is essentially an insurance problem, and it cannot be achieved without costs. To minimize the costs of that insurance, however, requires a robust and growing economy, maximizing market feedback, and reducing subsidies that place unfair burdens on other sectors.

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