President Obama has made a fetish of promising gazillions of “green jobs,” that is, new jobs that will supposedly flow from his environmentalist program. He claims that wind and solar power, and electric cars- all costing vastly more than existing standard technology-will magically create green jobs for the masses.
Into this green dream a bit of reality has intruded. A recent study by CRA (Charles River Associates) International, called “Impacts of the Climate Provision in the Obama Administration’s FY2010 Budget Proposal”(downloadable from the CRA website) estimates the cost to the American economy of Obama’s proposed cap-and-trade legislation. The results are sobering.
CRA estimates that if this legislation goes through, it will make natural gas prices go up 39% by 2020 and 56% by 2025. Gasoline and diesel fuel will be forced up 19% by 2020. And electricity will be forced up 27% by 2020 and 44% by 2025.
The rising energy prices will of course cost jobs. CRA estimates that the net jobs lost will be 800,000 by 2015, 1.9 million by 2020, and 3.2 million by 2025. These are net losses, meaning that the new”green” jobs are factored in to the projection. The losses will fall disproportionately on the Sun Belt states.
And the rising energy prices will lower consumers’ purchasing power. The greening of America will cost the average household $1,020 annually by 2015, $1,381 by 2020, and $2,127 by 2025. This is again the net cost, factoring in the revenues that supposedly will be given to consumers (revenues that will come from the carbon taxes on businesses).
Finally, the cost to the economy as a whole from cap-and-trade will be significant. CRA estimates that it will cost 0.7% of the GDP by 2025. Considering that our growth rate is in the range of 2% to 3% in a normal year, that is a steep price, indeed.
Does Obama realize that that his green scheme will have massive costs to our national wealth and jobs? Well, I can’t pretend to read his mind, and I certainly have learned not to trust his words. But my guess is that he does, but doesn’t care, for two reasons. First, he buys entirely the green narrative that the United States is an energy glutton that is the main cause of global warming, and needs to live a more austere lifestyle. In the environmentalist religion, man is viewed as a sinful despoiler of the environment who deserves to be punished and brought low.
Second, Obama recognizes that people don’t generally follow Frederic Bastiat’s advice to consider the unseen as well as the see!). While the jobs created by his green agenda will be relatively tiny in number, they will be visible. Obama will see to it that every new wind farm is prominently displayed on TV. Meanwhile, as businesses close because of the higher costs, the people out of work will pass unnoticed.