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Cap and trade’s failure to elicit congressional approval hasn’t kept the Obama Administration from pursuing smaller green jobs initiatives that are just as economically illiterate.
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| Modern liberalism is a faith defined by the belief that reality is whatever the state says it is. Thus has President Barack Obama often stated his intention to make “clean energy the profitable kind of energy in America.” Over time, the American public has become so anesthetized to this sort of rhetoric that it has assumed an air of plausibility. But Obama may as well have pronounced his intention to make Porsches America’s most affordable cars. Presidential fiat cannot rewrite the rules of economics.
The marquee example of this principle is the centerpiece of the president’s “green jobs” initiative, a comprehensive cap and trade bill. Contra Obama, its operative principle is not so much making clean energy affordable as it is making every other kind of fuel prohibitively expensive by proposing a de facto tax on all forms of carbon-emitting energy. The results? According to congressional testimony by the Heritage Foundation’s Ben Lieberman, “The cumulative higher energy costs for a family of four … will be nearly $20,000” within 25 years.
But cap and trade’s failure to elicit congressional approval hasn’t kept the Obama Administration from pursuing smaller green jobs initiatives that are just as economically illiterate.
In 2009, the state of California received $186 million in federal stimulus money for “weatherization programs,” initiatives to reduce home energy costs through methods such as air sealing and improving insulation. The administration, of course, ignored the fundamental contradiction at the heart of this program: If these improvements really saved more money than they cost, they wouldn’t require a government subsidy.
But cost savings were never the Obama Administration’s real intent. If they were, the weatherization efforts wouldn’t have been contingent on paying the “prevailing wage” in the industry. Because it fell to the U.S. Department of Labor to determine that wage, the program was effectively inoperative for more than half a year after passage. That may have been the best-case scenario, however. Since weatherization has been implemented, the Golden State has spent nearly $100 million of the money. In the last quarter, that expenditure created a paltry 538 jobs.
California’s disappointments look like outright successes compared to the city of Seattle, however. In 2010, the city received a $20 million grant for weatherization efforts. The grant came with a White House ceremony stewarded by Vice President Biden and a promise to create 2,000 jobs while retrofitting 2,000 homes in the Emerald City. More than a year later, Seattle has retrofitted three homes and created 14 jobs. Unsurprisingly, given the history of the White House’s economic forecasts, the estimates for job creation were off by 99.3 percent.
The great tragedy of Obama’s green statism is that it may have the long-term effect of undermining efforts at energy innovation. Any viable technology aiming to displace conventional fuel sources will have to be both scalable and affordable. By subsidizing efforts that meet neither criterion, the administration makes the competitive environment more difficult for firms that have a legitimate shot at developing such transformative technologies.
The industries that currently fuel America – petroleum, coal, natural gas – didn’t establish their preeminence through federal diktat. They created reliable, widely available energy sources and made them available at an affordable price. Alternative energy, if it hopes for widespread market penetration, will have to do the same. But every day the federal government puts its hand on the scales is one day further away from reaching that goal.
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