Europe: Spanish job-threat claim rebuked - University study criticised by US

As governments descend on Copenhagen, Denmark, to hash out a strategy for tackling climate change, debate has erupted across the Atlantic over the contribution that job creation within the clean energy sector will make in a carbon-restrained global economy.

According to the US federal government's National Renewable Energy Laboratory (NREL), a Spanish university study, claiming that the wind power and other renewables sectors destroy more jobs in Spain than they create, is fundamentally flawed.

In a white paper, NREL says the study, The Effects on Employment of Public Aid to Renewable Energy Sources, lacks transparency and supporting statistics.

Obama's pledge

The Spanish wind industry is particularly concerned about the study's impact abroad - particularly in the US, its biggest overseas market. While it attracted little attention from local economists, the study, written in English, took on a high profile in the US because its release followed President Barack Obama's pledge to boost wind and other renewables as engines of jobs growth. Obama had singled out Spain's wind industry as a model.

The study's chief author, Gabriel Calzada, economics professor at Madrid's Juan Carlos University, was interviewed on US television news and presented the case to Congress.

Calzada's premise is that Spanish government spending on every renewables job on average wipes out 2.2 jobs elsewhere in the economy. The theory is based on a widely held view by economists - and not questioned by NREL - that spending through public subsidies is less than half as efficient at job creation as private sector spending.

The study claims that each renewables job created since 2000 has cost, on average, EUR571,000 a worker - EUR1 million in the case of wind - compared with EUR259,000 across the rest of the economy. While acknowledging the difficulty of applying the Spanish experience to the US, Calzada's study suggests that the three to five million "green jobs" that Obama wants to create by 2030 would cause a greater number of jobs to be lost elsewhere in the economy.

But NREL says the study's conclusion, that state renewable energy policy results in net job losses, is unsupported. The study does not identify the jobs allegedly lost. NREL says it falsely compares renewables jobs to those across the economy, rather than directly to those in conventional energy, and that the costs of creating jobs vary between sectors. "Creating employment for legal or medical professionals costs more than creating employment for clerical or administrative professionals," it says. "Applying a methodology that compares renewable energy employment with an economy-wide average explains very little about how (renewables) job creation compares with comparable industries." It also says that the Spanish report overlooks benefits from exporting renewables technology.

Sergio de Otto, a renewables consultant and communications director at Spanish wind energy association Asociacion Empresarial Eolica (AEE), adds that what the report calls subsidies paid for renewables are actually a production incentive paid by all electricity consumers, not the public coffers.

Asked why it remove its name from the study, the Universidad Juan Carlos said it was preparing a response and was encouraging Calzada to respond to critics. Calzada did not respond to requests for comment.

Meantime, the AEE, Spanish university Universidad de Comillas and trade union Comisiones Obreras all highlight an earlier study by consultants Deloitte concluding that the wind industry created nearly 21,000 direct jobs and 17,000 indirect jobs in Spain to end-2007 and contributed EUR3.27 billion to GDP that year, compared with production incentives of EUR991 million (Windpower Monthly, January 2009). "With wind now mainstream, we are armed with science to ward off non-scientific attacks," says De Otto.

Economic benefits

Greenpeace joined the fray in mid-September with a report, Working for the Climate. It claims that rapid replacement of nuclear power and a large proportion of coal-fired generation - which the group believes would lead to a ninefold rise in renewable energy - would result in an increase of about two million jobs in power generation across the energy sector in the next 20 years. Some eight million jobs of the total 11.3 million in the energy sector in 2030 would be in renewables and energy efficiency, and a failure to realise an aggressive shift to renewable energy would instead cause the loss of 500,000 jobs across the energy sector, it says. "The solutions to the economic crisis and the environmental crisis are far from being mutually exclusive," it says.

Greenpeace says it based the findings on gross domestic product and population assumptions also used in the International Energy Agency's 2007 projection to 2030, as well as data from sources including NREL, the European Renewable Energy Council and the International Labour Organisation.