Tuesday, May 3, 2016

Net job impacts of expensive spasmodic electricity procurement

I continue to hear silly claims about employment benefits from paying extraordinary amounts for power in Ontario, inspiring me to post some references I collected years ago.

...no comprehensive evaluation was done on the impact of the billion-dollar commitment to renewable energy on such things as future electricity prices, net job creation or losses across the province, and greenhouse gas emissions.
...
The [report by the Task Force on Competitiveness, Productivity and Economic Progress of the Rotman School of Management at the University of Toronto] further noted that even if 50,000 new jobs were created, the higher energy costs attributable to renewable energy might result in job losses elsewhere in the economy, particularly in industries that use large quantities of energy.

Studies

Verso Economics, March 2011
The report’s key finding is that for every job created in the UK in renewable energy, 3.7 jobs are lost. In Scotland there is no net benefit from government support for the sector, and probably a small net loss of jobs.

Luciano Lavecchia and Carlo Stagnaro, Istituto Bruno Leoni, May 2010

The only scope, and we dare to say the only result, of our study is to show that green investments are an ineffective policy for job creation. Regardless to their other merits, that we have not reviewed in this paper, to the extent that the “green deal” is aimed at creating employment or purported as anti-crisis or stimulus policy, it is a wrong policy choice.

Gabriel Calzada Ãlvarez, Universidad Rey Joan Carlos, March 2009
Optimistically treating European Commission partially funded data1, we find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

This study is the one that is often claimed to have been refuted - partly due to a response from the US National Renewable Energy Laboratory (August 2009)
The recent report from King Juan Carlos University deviates from the traditional research methodologies used to estimate jobs impacts. In addition, it lacks transparency and supporting statistics... Finally, differences in policy are significant enough that the results of analysis conducted in the Spanish context are not likely to be indicative of workforce impacts in the United States or other countries.
Following the tepid rebuttal, rumours of an internal study for Spain's government confirming the original study accompanied the cutting, and eventual ending, of subsidies (Leaked Document Shows Spain's Green Policies are An Economic Disaster)


Manuel Frondel, Nolan Ritter, and Christoph M. Schmidt

A forerunner to all these studies was Germany's Solar Cell Promotions: Dark Clouds on the Horizon back in 2008:
...the promotion of renewable energy technologies is often justified by the argument that it would create jobs. Similar to the EEG’s environmental impact, however, gross and net employment effects should be distinguished. When the German Federal Ministry of Environment, Nature Conservation, and Nuclear Safety (BMU 2006:84-89) reports that 17,400 people were employed in the PV sector in 2004, this figure clearly reflects gross employment effects, since opposing impacts are ignored. Yet, apart from direct crowding-out effects on conventional energy production and indirect negative impacts on upstream sectors, supporting renewable energy technologies ultimately raises the price of electricity. The resulting drain of purchasing power and investment capital of private and industrial electricity consumers causes negative employments effects in other sectors. This casts doubt on the ministry’s claim that the EEG can be called a job machine.
The government government has pulled pack massively on contracting expensive supply via the feed-in tariff procurement system.

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