Executive Summary
Government promotion of green jobs is becoming increasingly popular. We critically review the main claims of three of the most influential green jobs studies and find serious economic flaws in all three.

Counter to the claims by green jobs advocates, if the advice of these studies is followed, the American economy will be harmed and growth will slow. We also estimate how a state-based cap and trade policy will hurt job growth and wages.

We review:

• The United Nations Environment Programme, International Labor Organization, International Trade Union Confederation’s Green Jobs Initiative, “Green Jobs: Towards Sustainable Work in a Low-Carbon World.”
• The Center for American Progress, “Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy.”
• The U.S. Conference of Mayors, “U.S. Metro Economics: Current and Potential Green Jobs in the U.S. Economy” prepared by Global Insight.

The first two of these studies contain a common fundamental error that is frequently made throughout the green jobs literature. Although the Conference of Mayors’ study doesn’t explicitly make the same error, the leadership of the Conference of Mayors has in the past. The error is that the Conference of Mayors counts the creation of a green job as a benefit and rationale for its proposed program in and of itself. Jobs, green or otherwise, are not benefits but are instead costs.

The creation of a green job makes work for someone and it diverts resources from elsewhere in the economy. If the green job is a net benefit it has to be because the value the job produces for consumers is greater than the cost of performing the job. This argument is never made in any of these three green jobs studies.

In fact the opposite, that it takes more work to provide the same amount of energy, is often argued as a benefit. The energy itself is the benefit, the work that goes into creating energy is a cost that we benefit by minimizing. The green jobs literature is riddled with this fundamental misunderstanding. ...

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David G. Tuerck, PhD
Benjamin Powell, PhD
Paul Bachman, MSIE
THE BEACON HILL INSTITUTE AT SUFFOLK UNIVERSITY

Introduction
Proponents of “green collar” jobs promise that government subsidization of these jobs will create a net increase in employment, economic growth, recovery from the current crisis, and energy savings, all in addition to environmental benefits. Unfortunately, these claims are based on seriously flawed economic analysis. Despite this fact, green jobs are becoming increasingly politically popular.

During the presidential campaign, then candidate Barack Obama promised to create 5 million new green jobs. Now, as President, he plans to have the government invest $150 billion over 10 years to: ...

Table of Contents
Executive Summary ............................................................................................................................. 3
1. Introduction ..................................................................................................................................... 7
2. The Claims of Green Job Studies................................................................................................... 8
3. Errors in Green Jobs Studies ....................................................................................................... 12
4. Case Study: Indiana under a Cap and Trade System................................................................ 23
5. Conclusion..................................................................................................................................... 29
References .......................................................................................................................................... 31
The Beacon Hill Institute Study Team ............................................................................................. 32