Magazine article The Spectator

The Green Jobs Fallacy

Magazine article The Spectator

The Green Jobs Fallacy

Article excerpt

Affordable energy would create more jobs than expensive climate change policies ever could.

Tim Yeo MP called his proposal for yet another draconian target to decarbonise Britain's power sector the 'green jobs amendment'. It was defeated last week by 290 votes to 267. One sweeping new regulation was apparently enough for the day as the Commons settled for casually renationalising the energy sector by passing the government's bill.

The amendment's defeat is a setback for environmentalists, who had campaigned for it aggressively, but not for Britain's two and a half million unemployed. 'Green jobs' are an utter farce. More expensive sources of energy will destroy more employment than they create.

That is not to say that no one has a green job. Tim Yeo has several and in the latest parliamentary scandal he appeared to be pitching aggressively for another one. In the past year he has earned tens of thousands of pounds working for green energy firms. And there are plenty of others working hard to turn renewable energy subsidies into more renewable energy subsidies.

Beyond the lucrative jobs for green lobbyists, it is true that there is more legitimate work making and installing the solar panels and wind turbines that earn those subsidies.

Britain needs 374 million megawatt hours of electricity each year and it takes more capital and more labour to generate a megawatt hour of renewable energy than it does to generate a megawatt hour of conventional energy.

And what must be remembered is the jobs not created because people are spending their money on paying higher bills rather than other things; not created because tens of billions of pounds are invested in the energy sector rather than other businesses; and not created because industrial energy costs are too high here in Britain relative to other potential locations.

According to a recent Liberum Capital report, more than £160 billion needs to be invested in our energy sector by 2020 if the current policies remain in place. Another £215 billion will then be needed by 2030. Without government policy only £71 billion would be needed this decade and less than £80 billion in the following decade.

Paying for all of that unproductive investment will require higher profits for the energy companies and higher prices for residential and industrial consumers. Even compared to today's high prices, that would mean total power costs rising by nearly a third above inflation by 2020 and doubling by 2030.

Does the government really think families can pay all that extra money on their utility bills, cope with the higher taxes that have been imposed in the hope of closing the deficit and not cut back on their spending, squeezing British retail?

Higher energy costs also hurt businesses.

Even service industries from pubs to data centres are struggling to cope with ever higher bills. But the energy intensive industries are the hardest hit. The Lynemouth aluminium smelter in Northumberland closed in 2011, for example. The owners reported that it was 'no longer a sustainable business because its energy costs are increasing significantly, due largely to emerging legislation'.

The 515 jobs lost at the plant will only have been a small part of the impact. All of the plant's contractors, customers and suppliers will be in trouble. …

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