Planet Gore

Re: Quite a Load of Toro

My initial take on that Obama “response” from the rather vested interest of NREL revealed some reasons that this was a not overly substantive assessment, as its overt politicization indicates.
Here are some detailed comments from a longtime policy-expert colleague affirming the document’s hackery (with a few tweaks by me):

The Obama “response” says: The metrics used in the Spanish study are not jobs impact estimates. The primary conclusion of the report is that the Spanish economy has experienced job loss as a result of its (renewable energy, herewith “RE”) installations. However, comparing the RE subsidy per job with the Spanish economy’s average capital per job and average productivity per job is not a measure of job loss. Traditional methods for estimating jobs and economic impacts are discussed below.
Comment: The authors of the NREL op-ed piece mistakenly claim to find fault with the Spanish study for pointing out that the subsidies per job in the RE “industry” are much higher than average for job creation in that country, which is not the same as disputing the findings. Surprisingly, *they* fail to recognize the logic that if a job requires a huge governmental subsidy in order for it to be created, it is most likely an uneconomic enterprise. This may not apply in the field of pure research or certain fields, but almost certainly does in the provision of electricity, something which in the advanced countries of the world has been undertaken for over a century and is well-established. An electron from a wind unit is no different from that produced by the combustion of coal or natural gas. It is fundamental that the authors missed that electricity is not a luxury good, even though Spain subsidizes it as though it was.

 

The Obama “response” states: The comparison of RE jobs with average economy-wide metrics fails to recognize the variability within the modern economy. The cost of job creation varies significantly among economic sectors. For example, creating employment for legal or medical professionals costs more than creating employment for clerical or administrative professionals. Applying a methodology that compares renewable energy employment with an economy-wide average explains very little about how RE job creation compares with comparable industries. A more informative analysis would compare metrics relating to RE workers with metrics for workers in other electricity generating industries. It would also show the range of metrics that exist across industries rather than economy- wide averages.

Comment: Yes, but while you are mostly (and, unsurprisingly) wishing a different analysis was undertaken, and change the subject to that desire, you skip by the fact that what is created is jobs making electricity. If it is more expensive to produce a job creating electricity one way than it is another, that is waste. And if more jobs are forced to be created to make electricity from renewable energy than from conventional energy, that energy will cost more. Which is why the government must subsidize it; no one would do it in the absence of subsidies and mandates.
The Obama “response” says: The report fails to account for technology export potential. Robust RE technology exports can greatly affect economic impacts of renewable energy (Lehr et. al. 2008).With its proactive RE policies, Spain is already a major exporter of renewable energy equipment (David 2009). 2 If global demand for RE technology increases, Spain’s early investment could allow it to capitalize on a global market for RE technology, which would contribute further to the Spanish economy.
Comment: These authors suggest that if governments around the world offer subsidies and compel the use by their consumers of electricity from RE the way Spain did, Spain will be well placed to cash in on their folly. That is true. It is also the argument made by the renewable energy industry association president in, for lack of a better word, support of keeping the Calzada findings secret. Countries whose main crops are heroin and other drugs also do better if people in other parts of the world develop a taste for their products, but would do especially well if their governments compelled the use of such products. The fact that Spain has diminished its own economic efficiency by throwing money at money-losing energy technologies in the hope that other governments will follow their loss-leading path is not a defense of their initial unwise decision to produce goods that cannot compete without subsidies or government force.

 

The Obama “response” says: The study ignores the role of government in facilitating growth of valued new industries. Governments invest in renewable energy technologies to promote the growth of the industry as a whole. Emerging RE technologies have not achieved levels of maturity and economies of scale that traditional technologies have; nor have they benefited from years of public and private investment. As a result, there may be a role for government to play in leveling the playing field between new and old technologies and in supporting emerging technologies. In the United States, all conventional energy technologies received government support in their early stages, and still benefit from government investment today (EIA 2008).

 

Comment: This is patently absurd. The government did not subsidize Henry Ford, or the use of the coal for the industrial revolution, or oil and gas. Most conventional energy sources of today, excepting nuclear power and hydropower, came about as a result of market forces that gave consumers the choice to buy the cheapest and/or most efficient source of energy for their use. Government has certainly been involved in nuclear technology because of its dual use capability and the government’s interest in stopping its proliferation. It was also instrumental in some of the progressive era hydroelectric projects on a grand scale, as in Bonneville Power or the TVA, but here, too, there were flood control and irrigation subsidiary benefits the government sought. Continually repeating a claim that history is otherwise does not make it so. It is safe to say that never has the government larded on so much support for energy sources as those currently proposed for renewable energy. NREL is a perfect example of a government-owned special interest pursuing its own interests as they perceive them.

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