Economist: Green projects not growing economy (Cincinnati)

The prevailing wisdom that green jobs are key to Ohio’s economic revival may not be sage after all.

A study by a research team led by Ohio State University economist Mark Partridge has concluded government subsidies of green energy projects are unlikely to generate large numbers of jobs and the money could be put to better use elsewhere.

The findings come as state government has invested more than $400 million in advanced energy activities, such as development of alternative fuels, fuel cells and solar and wind power, since Gov. Ted Strickland took office in 2007. The strategy is embraced by Democratic and Republican legislators, who hope the investments will spur green energy construction and related jobs and drive demand for components such as wind turbines and solar panels made in Ohio.

The weakness of that approach is that green energy technologies are capital-intensive and require few workers to start or maintain, said Partridge, a professor in OSU’s Department of Agricultural, Environmental and Development Economics.

"They use machines, not workers," he said.

Partridge and researchers Amanda Weinstein and Clay Francis said the green jobs that are created will be offset by losses in fossil-fuel industries, such as coal-burning power plants, or will merely be a relabeling of existing jobs.

"Subsidies used to fund green jobs," Partridge said, "could instead be used to fund other worthwhile projects with greater job-creating potential or even to reduce (government) budget deficits."

Better job-creating projects, Partridge said, would include construction of infrastructure, research-and-development programs, or simple energy conservation improvements in commercial and residential buildings. Those conservation efforts can be more cost-effective than alternative energy in reducing carbon emissions, he said, and have the potential to create more jobs because they are more labor-intensive.

Partridge discounted the argument that state and federal subsidies for green technologies will create a large number of so-called indirect jobs in manufacturing and other industries.

"One of the things economists like to point out," he said, "is indirect job creation is much smaller than politicians want to admit. It’s usually pretty modest."

But Mark Shanahan, Strickland’s top energy adviser, disagreed with a number of Partridge’s conclusions, including the effect that investments in advanced energy will have on manufacturing and employment.

"I don’t think the study captures the supply-chain jobs," Shanahan said. "Someone has to make all these parts and pieces. In a state like Ohio, that’s what we do."

Read the full story in the Business Courier of Cincinnati.