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Green Jobs Myths

Green Jobs Myths

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Published by: editorial.online on May 04, 2009
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10/18/2011

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As just reviewed, the green jobs literature contains highly problematic assumptions about

the economics of employment. In this section we examine some of the peculiar assertions about

economics in general. First, the literature rejects the existence of comparative advantage,

suggesting a need to avoid trade. Second, the literature makes inappropriate calculations of

consumer surplus, giving misleading results with respect to the benefits of the proposed policies.

Third, the green jobs literature frequently confuses responses to mandates with market responses,

improperly extrapolating from the former to predict the latter. Fourth, the literature neglects

consideration of the opportunity costs of the resources it proposes to devote to green jobs

programs. Opportunity costs are key to understanding the net benefit of a proposal, since the

value of the alternative uses of the resources must be deducted from the gains created by the

green jobs policies. Finally, green jobs analyses do not take into account how market incentives

operate with respect to energy efficiency, instead using an incorrect model of behavior in which

energy efficiency results only from government mandates.

By failing to take into account the incentive effects on energy consumption, green jobs

analyses overstate the energy that is used in the absence of proposed mandates and thereby

overstate the benefits of their proposals. Using data on improved energy efficiency over past

decades, we show that the market produces substantial increases in energy efficiency without the

drastic measures proposed by the green jobs literature.

That the literature contains so many basic economic errors is not accidental but instead

reveals that much of the green jobs literature manifests a thinly concealed hostility to market

ordered societies, a hostility which strongly influences its policy recommendations.268

Taken

together, these flaws in economic reasoning reveal fatal flaws in the green jobs literature’s

analysis of the economics of green job policies.

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