David R. Henderson  

The Wrong Case for "Green Jobs"

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Suppose that you want to build a house, and you solicit two builders for estimates. Builder A's eight employees can build the house in three months for $300,000. Builder B's four employees can build the same house in the same time for just $150,000. Which builder would you choose?

This is not a trick question. You would choose Builder B, right? But Robert Pollin, James Heintz, and Heidi Garrett-Peltier would select Builder A if they employ the same reasoning they exhibit in their recent monograph The Economic Benefits of Investing in Clean Energy.


This is from my review just published in Regulation. Check out my review and see how they attempt to justify their view and how I respond.


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CATEGORIES: Cost-benefit Analysis



COMMENTS (5 to date)
Silas Barta writes:

I didn't read the file (it's pretty big), but are you sure you aren't missing some caveat, at least some implicit one, like:

- if people really care about having a green house
- if the energy cost of the more expensive one would be a lot lower
- if prices would properly reflect the social cost of energy use

wlu2009 writes:

Silas,

Those may be all benefits to weigh against the cost of the extra builders (and David addresses these to a certian point). His criticism is that Polin et al argue that the green house is better BECAUSE it takes more people to build it, not despite that fact. That is, they argue that the extra builders are not a cost against which we should weight the benefits of the environmental upgrade, but are rather a benefit in and of themselves, a rather ridiculous notion.

Bob Murphy writes:

Silas, the file is big but David's review is only two pages. And yes, as wlu2009 says, David acknowledges those issues but points out that they would simply increase the benefits of the activity; these issues still don't turn costs into benefits.

For those interested, I gave a 6-minute talk at the Heritage Foundation on the fallacies lying behind a lot of the pro-"green jobs" discussion. My remarks were based on a paper I co-authored that surveyed some of the major studies in this area, including two by Pollin and co-authors.

Devil's Advocate writes:

Yeah, focusing on the jobs is like saying that the great thing about the first CD players was not that they had better sound, but rather was that they cost $3,000.

Foobarista writes:

And by the same logic, once the kinks are worked out of green construction and only four tradesmen are needed, there'll be no reason to build green?

I guess broken windows are "green"?

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