Is Renewable Energy a Threat To Economic Prosperity?

I’m proud that Tom Konrad, famed stock market analyst and editor of, offers his comments here frequently. In a post yesterday, he offered me guidance in wrapping my wits around the issue of green jobs, directing me to his thoughtful article on, linked below. There, Tom looks at the issue from the standpoint of basic microeconomics’ “production function” which suggests that labor can be freely substituted for capital and energy. He provides examples recently, including this one:

Shifting people out of their cars and onto mass transit will create jobs because there will have to be drivers and people managing the transit system, where before no one was paid to drive. To the extent that the transit system can be paid for out of the reduced fuel costs and car ownership costs of the former drivers turned riders, the number of jobs created will be a pure economic gain.

But I wonder if it’s that simple. Even in this apparently straightforward example, doesn’t one have to ask about all the people associated with the shrinking auto industry? Moving individuals out of their cars and onto buses also affects everyone associated with the petroleum industry and the entire auto aftermarket: tires, smog checks, brake jobs, etc.

Having said this, from everything I’ve read on the subject, I’m convinced that “going green” represents a huge net gain in jobs, at least in the short-term. I can’t imagine how anyone can argue that the process of retrofitting our buildings for energy efficiency will not employ many times more people than will be lost in producing the electricity that is currently being wasted; principally these are people working in coal and natural gas.

It’s equally hard to argue that installing PV, solar thermal, wind, geothermal, hydro, and biomass facilities won’t employ more people than will be lost from the ranks of the traditional sources of energy – at least for a period of time. But that’s where it gets complicated, and I’m not sure anyone has the answer. What happens when all this stuff is installed and operational? Sure, there’s maintenance, but it’s minimal, since the fuel is free – and most of it’s coming at us non-stop from a hot yellow ball in the sky 93 million miles away.

And what about electric transportation? The migration from internal combustion engines to EVs is going to require a ton of people in batteries, smart-grid, telematics (the information and communications technology – “ICT” — connected with all this), not to mention the manufacturing of the EVs themselves. But now you have vehicles that go 500,000 miles before they even need a tune-up. That’s a lot of displaced auto mechanics.

Here’s a conclusion that’s fairly safe: The vast majority of what you read on this subject is horribly slanted. In most of what I’ve come across, figures are presented out of context (or made up out of whole cloth) to support a certain political ideology. The idea, for instance, that environmentalism is at odds with economic prosperity, a concept so dear to right wing demagogues, is totally specious, yet it’s easy to make that point and convince an audience of ignorant and angry people if you present certain numbers and omit others.

But let’s be honest with ourselves: it’s equally disingenuous to suggest that every innovation in clean energy and transportation will add jobs. Renewable energy is about technology, and technology has a tendency to displace human labor. At the end of the day, the real imperative to move to clean energy and transportation is the health and safety of every living thing on Earth. That’s at least somewhat important, isn’t it?

Have any Question or Comment?

2 comments on “Is Renewable Energy a Threat To Economic Prosperity?

Ivor O'Connor

There used to be lots of arguments along these lines. Basically every union job where somebody did it the old way. Whether it was digging trenches by hands to mainframe programmers doing inventory. New more efficient ways of doing things always cause problems to those invested in the old.

The only constant throughout change is a step towards efficiency. The efficiency allows for people to concentrate on new paradigms. New paradigms allow for a better civilization.

Those nations not changing will lose their economies to those nations that do embrace change.

you’re right! change is technology, we have to embrace change for the better. Adapting to this change is our survival. Of course there’s always a consequences but if you weigh it’s pros, the most with greater positive effect matters.

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