There is a lot I could write about the new cap-and-trade bill that made it through the House of Representatives in a tight 219-212 vote, but I will limit myself in this post to the jobs claims of the Obama administration, already known for making wildly optimistic and unmeasurable job-creation estimates. The President says that the new energy bill will make millions of new jobs, his example of how the cap-and-trade will start employing people: 3,000 new jobs in California to build a new solar plant that will permanently employ 1,000 people. First off, 4,000 jobs in California, the country’s most populous state, times 50 (4,000 per state) equals 200,000 jobs, not millions. If this is how Obama will count jobs, with a large percentage of them being temporary jobs, then the long-term effects on employment will not be that pronounced. Furthermore, if new solar plants employ about 1,000 people permanently, we would need many hundreds of solar plants to even start getting close to the millions of jobs goal, at least in the solar industry. But I am being too simplistic, possibly this is only one example of the many other initiatives in the state, but the claims of generating millions of jobs through shackling the free market will only lead to eventual government subsidies of the “green” energy sector (like Europe currently does) which, in the end, is just plain socialism since the only money they have to invest comes from taxpayers, you and me. Is this a flagrant attempt to nationalize the energy industry?

Second, the modern coal industry labor force numbers 174,000. The coal industry is an established industry with plants around the country, mining operations, and an relatively inelastic demand from a large consumer base and still, they can only employ about 174,000 people. The government’s plan to excessively tax the energy industry (in the form of the permits it issues) may stimulate business growth in the green sector and it will hurt the American consumer, probably resulting in more job loss overall than job creation. Eventually, like in Europe, the government will need to start subsidizing the green industry if oil prices drop, which may happen if the oil-producing countries see our demand fall precipitously, and other energy sources become cheaper. This means more taxes on Americans to keep the green sector alive. Even if the rosy estimates of how many jobs will be created are correct, Obama will alienate the labor unions by replacing good paying heavy industry and energy industry jobs with lower paying “green” jobs. In terms of creating manufacturing jobs, China’s entry into the market has cut the price of solar energy cells and will probably also do so with wind turbines as well, making the manufacturing problems that the US has faced in other industries also affect the future US green sector. The UK-based Financial Times says it best: “For western politicians, the uncomfortable truth is that the expansion of renewable energy in developed countries, aimed at reducing their carbon emissions, may result in a bonanza for poorer nations rather than a grand influx of jobs to their home countries.” In order to compete or to fulfill the promise of millions of jobs, the government will be forced to further subsidize the green sector in order to compete with China, India, and the already well-established European companies. However you slice it, the government will have to increase the tax burden on American citizens.

Third, while they build up this clean energy industry that will supposedly employ millions, Obama has claimed that he will definitely bankrupt the coal industry with his proposals, thus destroying 174,000 jobs just in the coal industry. This is not taking into account the effect it will have on other industries. The steel industry, which has already cut down carbon emissions by a third over the last 15 years, currently being beaten in the global market by countries such as China and India, suffering from Chinese pro-growth policies that violate international trade agreements, not fairing well during the recession, and as of 2006 employed 154,000 people will be seriously hurt by such a cap and trade system that will only further worsen an already challenging situation for the US Steel industry. All heavy industry in general will be given a great incentive, not to reduce carbon emissions, but rather to relocate their operations to third world countries with less restrictions on that good old American value: making money. This means that the whole rationale behind cap-and-trade reducing emissions from heavy industry will be offset by an expansion of heavy industry in third world countries that will be less likely to pass any such legislation. If you thought that China was bad for the US manufacturing industry, just wait until Obama is done with it.

Fourth, the economy as a whole will be hurt by rising prices making the cost of running a business higher and thus contributing to unemployment in this country. Just take oil as an example, gas prices in the US are less than half of many European countries, due to high taxes on energy there, yet Europe’s demand for oil has remained stable.

Graph according to the Energy Information Administration

This means that excessive taxes have merely punished consumers while doing little to curb consumption, which means that Americans will have less disposable income and businesses will have to move overseas to cut costs so that they can make some profit. In order words, less jobs overall. This article says that from Spain’s experience with subsidizing and encouraging “green” jobs, 2 jobs are lost for every 1 green job created.

Simply on the jobs part, the cap-and-trade program will end up costing America far more than it will help either the US economy or the environment. America cannot afford to pass a bill like this one. Sadly, the Republican opposition came up with an alternative bill that focused excessively on research and not enough on what we actually need: action. I back a policy that makes America energy independent, as a matter of national security, and that makes our production of energy efficient and cleaner. In essence, my policy would be one of “Clean Growth,” where government should help the markets tackle this global problem while remaining competitive. An example of this are to use the already existing technologies that make our unrivaled amount of coal cleaner and to make that technology more cost effective. Another example is to get serious about nuclear power, a thought that makes liberals cringe, yet is the most practical and common sense way to power our country, with the disposal of radioactive materials being the most pressing issue to be resolved. Another example is to develop battery technology further, frequent advances are already being made, and support alternative fuel cars, which is actually already a part of this bill.

What I do not support is a policy of “Clean Contraction” that punishes the American consumer for using cars and appliances simply because the Left has changed from believing in red socialism to believing in green socialism. We do not need to contract the economy to become energy independent and protect the environment. We need to unleash American ingenuity. For Republicans to become a viable forward-looking party, they need to embrace actions that lead to “Clean Growth,” especially since we have been funding dictators and terrorists around the world for our cheap oil who later turn around and launch attacks on Americans. It is no coincidence that most of America’s enemies come from regions with large oil reserves. Republicans need to embrace clean energy independence in order to strengthen their national security credentials… the days of irrational liberal policy victories are here, they need to be countered with common sense and courage for our country to survive.

-AG