SOTU Challenge: When Talking Climate, Don’t Forget The Green Jobs

Bill Scher

Expectations are high for President Obama to get specific about his second-term plans to protect the climate, particularly regarding plans to bypass Congress and use the EPA’s authority to further reduce greenhouse gas pollution.

The appeal is obvious: no need to wrangle with the climate change deniers that currently run the House.

Still, there are plenty of other political risks with the executive action route. President Obama doesn’t have to run for office again, but other Democrats do. And massive backlash from overly crude regulation could lead to another Tea Party victory in 2014.

Which is why I found the counsel from David Leonhardt in Sunday’s New York Times so strange.

He glibly dismisses the importance of stressing the creation of “green jobs” and argues we should embrace the simple argument that we should stop climate change because we should stop climate change:

Green jobs have long had a whiff of exaggeration to them. The alternative-energy sector may ultimately employ millions of people. But raising the cost of the energy that households and businesses use every day — a necessary effect of helping the climate — is not exactly a recipe for an economic boom.

The stronger argument for a major government response to climate change is the more obvious argument: climate change. The continental United States endured its hottest year on record in 2012, and the planet’s 13 hottest years have all occurred since 1998.

This severely downplays the green jobs case, and is blind to the problem with focusing on climate alone.

If it were as simple as Leonhardt makes it, then President George W. Bush would have followed through on his 2000 campaign platform and enacted climate legislation before Barack Obama even came to Washington.

But there’s a big hurdle to clear for any clean energy legislation, let alone legislation as complex and far-reaching as climate change legislation: how will it affect jobs and the economy?

The fossil fuel posse will be out in full force warning of killed jobs and skyrocketing energy prices. The response from the environmental community can’t be: yeah, too bad.

Leonhardt briefly alludes to this reality at the end of his piece: “the strongest economic argument for an aggressive response to climate change is not the much trumpeted windfall of green jobs. It’s the fact that the economy won’t function very well in a world full of droughts, hurricanes and heat waves.”

Well, OK. But we have the facts to make a better case than: the economy will suck less if we avert a climate crisis.

We have the JOBS21 report from the Blue-Green Alliance which tabulates the potential job creation for all the various green jobs initiatives — a minimum of 7 million jobs in the next six years.

Investing the future of green jobs will pay off better than remaining dependent on fossil fuels while letting other nations seize dominance in the clean energy technology industry. The Political Economy Research Institute’s Robert Pollin finds that “The green economy will create about 17 jobs per $1 million of expenditure, the fossil fuel economy about five.”

Leonhardt realistically notes that just because you create green jobs doesn’t mean you don’t eliminate jobs somewhere else. But would a comprehensive strategy to cap carbon necessarily mean an economic loss? Absolutely not.

When the House passed in 2009 the landmark American Clean Energy and Security Act, the EPA found it would have a trivial impact on GDP. As the Wall Street Journal reported at the time, “It will take until 2030 for the national GDP to reach $22.6 trillion; if cap-and-trade is passed, that will just take three months longer.”

Furthermore, the Congressional Budget Office found the legislation would not significantly impact household costs and would cut the budget deficit. As I summarized back in 2009, the CBO said the bill would “slightly cut the budget deficit by $9 billion over 10 years, would only add minor costs to the average household of less than a postage stamp per day, and would result in a net benefit to low-income households.”

However, all that I cited above would not be directly achieved by EPA regulations alone. The EPA has the authority to issue regulations to curtail greenhouse gas pollution, and that will create incentives for a shift toward green energy and help create green jobs. But the EPA can’t create a broader system to collect revenue from polluters and use that revenue to invest in clean energy and provide rebates to consumers, accelerating the creation of jobs and protecting consumers from price shocks during the transition.

These economic impacts are still important issues to tackle. Following Leonhardt’s imbalanced advice to squelch the economic case for saving the climate — leaving advocates vulnerable to right-wing economic attacks — will likely stoke a backlash far more furious than the fictional “death panels”

The President is right to pursue EPA regulation so long as conservatives prevent Congress from acting, as it will not only help the climate but also may get affected corporations back to the negotiating table for comprehensive legislation.

But he can’t make a strong green jobs case with EPA regulations alone. He needs to keep up the push for more clean energy investment, which can be best achieved with the huge revenue stream that would come from comprehensive climate legislation that either sells companies pollution permits (in a cap-and-trade system) or institutes a carbon tax (perhaps as part of the broader tax reform both parties keep saying that they want.)

It not necessary for President to make a big push for a specific bill tonight. But it is important that he keep making the case that saving the climate can create jobs without increasing household costs or harming economic growth.

Otherwise, those EPA regulations won’t last very long.

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