REPORT: The Dirty Secret Behind Clean Jobs

With unemployment on the rise, new jobs are scarce. Creating jobs has become a top priority for politicians. One can hardly watch the news without hearing catch phrases like the “renewable energy economy,” “green jobs” and “leading the world in clean energy technologies.” In short, environmental policies have been rebranded as job creators.

Cascade Policy Institute’s new report, The Dirty Secret Behind Clean Jobs, reveals numerous flaws with this approach. The authors address the misconceptions behind creating “green jobs.” The definition of “green jobs” is vague, green job subsidies are based on flawed economic principles and, lastly, assumptions for job growth are inaccurate or downright false.

The report’s co-author, Nick Sibilla, states, “Our report focuses on Oregon, national and international attempts to create green jobs. Overwhelmingly, we found that green jobs are based on faulty economics and wishful thinking.”

The Dirty Secret Behind Clean Jobs reveals:

  • Numerous definitions of the term “green jobs” exist. In fact, most government agencies interchange the terms “clean” and “green,” adding to the confusion of what really constitutes an environmentally friendly job.
  • Proclamations about green jobs fixing the economy are exaggerated and misleading. Oregon employers predicted the number of green jobs would grow 14 percent between 2008 and 2010, which would have equated to 7,400 new jobs in the state. Meanwhile, statewide employment levels have dropped by 140,000 jobs over the same two-year period.
  • “Clean jobs” turns out to be just another term for big government. According to The Brookings Institution, the industry of “regulation and compliance” (i.e., government employees) was the fourth largest source of clean jobs in the United States. Meanwhile, in Oregon, three of the larger green jobs employers are the U.S. Forest Service, the U.S. Army Corp of Engineers and the U.S. Bureau of Land Management. All of those salaries are ultimately paid by taxpayers.
  • One clear example of green job pork barrel spending is the Shepherds Flat wind farm under construction in Gilliam and Morrow Counties. The project has obtained $1.2 billion in federal, state and local subsidies but will create only 35 permanent jobs. Each job will cost over $34 million to American taxpayers.
  • Green job estimates do not account for job losses in other sectors. Spain, a pioneer in renewable energy before the recession, is a sobering example. A recent Spanish economic analysis revealed that for every green job created, more than two jobs were lost.
  • Many green job advocates claim that green industries are more labor intensive and thus create more jobs than other sectors of the economy. Although inefficiency is not something to be praised, the claims are still downright false. A recent Italian study suggests the green industry is a capital-intensive, not a labor-intensive, industry and that the data show that green investments generate fewer jobs than investments in other sectors of the economy.

Cascade’s vice president and co-author of the report, Todd Wynn, stated, “Despite the continued rhetoric from politicians, our report shows the utter failure of the green job movement. It turns out to be more about corporate welfare and government handouts than actual job creation.”

DOWNLOAD THE DIRTY SECRET BEHIND CLEAN JOBS REPORT

FOR MORE INFORMATION:

Todd Wynn
T: 503.242.0900
F: 503.242.3822

 

BPA Fact Sheet

Despite considerable fears raised by activist groups and the press, the science does not warrant regulations on Bisphenol-A (BPA). Instead, it shows that human exposure is too low to have any measurable impact even for infants and children. As a result, regulatory measures to ban BPA could have unintended, adverse health and safety consequences.

Second, the consumer market is already adjusting to meet the demands of overly concerned Oregonians. Numerous manufacturers produce BPA-free beverage containers and major retailers are asking for alternatives to meet consumer demand. This should make one wonder why legislation is even needed to address BPA worries.

Cascade Policy Institute has put together this concise fact sheet to address the myths and misconceptions associated with BPA.

Click here to download the facts on BPA.

The ABCs of Environmental Hysteria: Activists, Bisphenol-A and Children

Spreading like wildfire, more attempts have been made to ban Bisphenol-A (BPA) at the state level in 2011 than in any previous year. More than 50 bills have been introduced in legislatures across the country to ban a chemical that commonly lines beverage and food containers. The Oregon Senate recently passed Senate Bill 695, which would make illegal the sale, distribution or manufacturing of a child’s beverage container made or lined with BPA. The bill, now headed to the Oregon House, is a perfect example of baseless environmental hysteria leading to illogical and destructive regulations.

 

Year after year, despite overwhelming scientific evidence to the contrary, environmental lobbyists and activists descend upon the state capitol to convince legislators that “evil” corporations insist on using a chemical they claim is unsafe. With the emotional argument of “saving children from cancer” as their mainstay, these activists are pressuring Salem politicians to ban BPA altogether.

A number of important lessons can be gleaned from their efforts:

First, people tend to overestimate risk and to exaggerate the benefits of risk-reducing laws. Proponents of banning BPA insist that government should use the “precautionary principle.” This means that if a possibility of causing harm to the public exists, despite lack of a scientific consensus, then politicians have a “social responsibility” to protect the public by passing laws to prevent possible harm. The precautionary principle allows politicians to justify discretionary decisions based solely on public fear. In the case of BPA, politicians may choose to ban the product entirely, even if the scientific community continues to exonerate this chemical of the claims made against it.

In BPA’s defense, we know a lot about it. In wide use for over fifty years, the chemical has been  extensively studied. The science has revealed that consumer exposure to BPA is far below levels of concern, even for infants and children. BPA is actually quite useful in protecting consumers against food contamination. In other words, banning BPA could create significant new risks. Products or other chemicals that would be introduced to perform the same functions may be more expensive, not work as well, and produce new safety problems that have yet to be studied. Thus, switching to a less tested and potentially less safe alternative is risky for children and infants. In this case, adherence to the precautionary principle actually should preclude the use of the precautionary principle by those concerned about public health!

Second, the consumer market is already adjusting to meet the demands of chemical hypochondriacs. Numerous manufacturers produce BPA-free beverage containers, and major retailers such as Walmart are asking for alternatives to meet consumer demand. BPA-free manufacturers openly advertise their products as BPA-free. When a consumer desire becomes mainstream, regardless of whether it is scientifically justified, a free market will meet that demand. This should make one wonder why politicians in Salem think they need legislation to address BPA worries.

Finally, BPA is just today’s target in a never-ending war by environmentalists to eliminate from the environment anything humanly manufactured. This attitude can be summed up with one word: chemophobia – the unreasonable conviction that all chemicals are bad and that all things loosely defined as “natural” are good. Fear makes it difficult for anyone – let alone politicians – to take a rational look at the issue, especially when ban proponents are pulling the “Do you hate children?” card.

Although reason and objectivity eventually should win a debate, they often don’t. That is yet another reason why it is so important to limit government interference. As more state politicians pressured by hard-charging environmentalists and misguided parents move to ban BPA, pressure will build on those who hold out. Unjustified bans become the rationale for more bans. Sadly, it won’t stop with BPA, as special interests always will strive to use government to control fellow citizens and to limit their choices.

Testimony on House Bill 3538: Regarding Climate Trust’s Offset Programs

Testimony before the House Committee on Energy, Environment and Water on March 29, 2011:

Co-Chair Cannon, Co-Chair Gilliam and members of the Committee, my name is Todd Wynn. I am Vice President and energy policy analyst at Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I am here to testify today against House Bill 3538.

Background

The original purpose of House Bill 3283 is to regulate and reduce CO2 emissions from regulated facilities by implementing carbon offset projects. The Climate Trust, the only “qualified” organization that receives funds according to the bill, has proven ineffective and wasteful.

House Bill 3538 would change the original purpose of the carbon dioxide standard set forth in HB 3283 and set up the possibility for more fraud and abuse with regard to delivering real, verifiable, and additional carbon offsets.

1. The Climate Trust is not transparent

Because The Climate Trust’s existence is a function of state law regulating facilities, it should be subject to the same standards as public agencies for release of public records.

The Climate Trust has refused to answer questions that could be considered “critical” of carbon offsets[1] and has refused to provide access to the recent five-year report.[2]

The Climate Trust’s annual reports have not been accurate updates. They have been overly positive reports addressing self-proclaimed success and not mentioning failure or specifics of projects.

Many documents such as funding and dollar amounts spent on certain projects are unable to be retrieved or accessed.

2. The Climate Trust has failed to reduce carbon dioxide and to adhere to the monetary offset rate according to House Bill 3283

The Climate Trust has never adhered to the monetary offset rate established by the Energy Facility Siting Council (EFSC), and this has led to a major shortfall in offsets that were paid for by regulated facilities.

The Climate Trust has admitted to paying more than the established monetary offset rate in the last five-year report to the EFSC. Out of thirteen projects, the Climate Trust estimates they spend an average of $3.45 per metric ton, which is well above the current 2007 rate of $1.40 per metric ton. Since The Climate Trust pays an amount higher than the established rate, carbon dioxide is not being offset as according to HB 3283.

The table above shows five of The Climate Trust’s projects that have data on offsets delivered and funds spent. This table describes the shortfall of offsets that should have occurred and the value of these offsets to regulated facilities.

The Climate Trust on these five projects alone has an offset shortfall of 649,923 metric tons which, at the offset rate of $1.40 per metric ton, amounts to $909,893 of regulated facility money.

3. The Climate Trust has continuously failed to produce verifiable and additional carbon offsets

Cascade Policy Institute audited 58% of the offset projects in The Climate Trust portfolio. Cascade Policy Institute audited projects that were completed or near completion in order make use of monitoring and verification reports and other data.[3]

A closer look into the portfolio showed there are numerous problems that undermine the quality and effectiveness of The Climate Trust’s projects. Lack of additionality and accountability of funds, inaccurate assumptions, difficulty in verifying and monitoring results, lack of permanence and leakage issues are most of the problems that plague the analyzed offset projects.

Brief overview on failure of projects:

Deschutes Riparian Reforestation– In addition to only completing approximately 18% of its 2008 goal, The Climate Trust needlessly paid a lumber company to plant more trees on an already stocked land thus negating additionality.

Preservation of a Native Northwest Forest– Climate Trust funds that were supposed to be allocated to the Lummi Indian tribe to purchase 1,654 acres of forest were used to fund the tribe’s annual canoe journey and a college scholarship program.

Blue Heron Paper Manufacturer Efficiency Upgrade– Climate Trust funds that were supposed to be the deciding factor in whether Blue Heron could finance an energy efficiency upgrade were not allocated to the company. Blue Heron’s energy and environment department head stated that they would have completed the upgrades at some point in the future in order to stay competitive thus negating additionality.

Portland Building Efficiency Program– Monitoring and verification reports used two different estimates to calculate the offsets that were not additional. These figures were highly significant in determining the actual amount of offsets paid for and claimed by The Climate Trust. This leads to serious questions on the additionality of these offsets.

Traffic Signal Optimization– The City of Portland already committed to optimizing traffic signals over two years before The Climate Trust’s involvement which negates additionality. In addition, the third party that performed the calculations on fuel savings admitted the estimates were inaccurately calculated.

Internet Based Carpool Matching– The Climate Trust only achieved 1.4% of the ten-year goal and allowed the City of Portland to “make up” the offsets through two projects that were neither monitored nor verified.

Innovative Wind Financing– The Climate Trust paid for renewable energy certificates (RECs) which do not represent actual reductions in carbon dioxide. Subsequently, The Climate Trust has written a policy paper proving why RECs are not offsets.

4. Allowing the Climate Trust to offset more than carbon dioxide goes against the original purpose of House Bill 3283 and opens up the opportunity for more waste and abuse.

The original intent of House Bill 3283 was to reduce and offset carbon dioxide emissions from regulated facilities. This did not include all greenhouse gases.

The majority of fraudulent carbon offset projects have stemmed from greenhouse gases other than carbon dioxide. Massive fraud on the international scale has been attributed to the destruction of trifluoromethane (HFC-23) a greenhouse gas byproduct of manufacturing refrigerant gases. The carbon offset credits that sold to reduce HFC-23 are twice as valuable as the refrigerant itself.

 

A study found that almost three-quarters of Clean Development Mechanism (CDM) registered offset projects were already complete at the time of approval, and thus, didn’t need carbon credits to be built. An estimated 40 percent of CDM projects registered by 2007 represented “unlikely or at least questionable” emission cuts. Between a third and two-thirds of CDM offsets don’t represent actual emission cuts.[4]

Conclusion

HB 3283 was originally passed with the intention of reducing manmade carbon dioxide, not other greenhouse gases.

The Climate Trust has proven itself to be wasteful and non-transparent in its operations.

Allowing The Climate Trust to offset more than carbon dioxide violates the original intent of the law and opens the door for more fraudulent non-additional offsets at the Oregon ratepayer expense.

I urge the members of this committee to vote no on HB 3538.


[1] Email from Mike Burnett, Executive Director of The Climate Trust. November 28, 2008.

[2] Phone call from Amy Phillips, Marketing and Communications Director of The Climate Trust. September 9, 2009.

[3] Money for Nothing: The Illusion of Carbon Offsets. February 2009. Available at http://cascadepolicy.org/pdf/env/Climate_Trust_Audit_021009.pdf

Testimony on House Bill 2992: House Committee on Energy Environment and Water

March 24, 2011

 

Co-Chair Cannon, Co-Chair Gilliam and members of the Committee, my name is Todd Wynn. I am Vice President and energy policy analyst of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

 

I am here to testify today in support of House Bill 2992.

Economic Costs of Not Classifying Hydro as Renewable

 

In 2007, legislators passed Senate Bill 838 which established the Renewable Portfolio Standard (RPS). This legislation forces the major utilities to procure 25% of their electricity from renewable energy by 2025. The bill established a narrow definition of renewable energy which specifically excludes the vast majority of energy produced from Oregon’s hydroelectric system.

 

Cascade Policy Institute’s recently released economic analysis, The Economic Impact of Oregon’s Renewable Portfolio Standard, shows that the RPS with the current strict definition of renewable energy will lead to significant negative economic consequences as only more expensive and intermittent sources of energy qualify[1]:

 

Over the period of 2015 to 2025, the mandate will cost Oregonians an additional $6.811 billion over conventional power within a range of $4.009 billion and $9.310 billion.

 

In 2025, the mandates will cost families an average of $247 per year, commercial businesses an average of $1,394 per year and industrial businesses an average of $11,585 per year.

 

By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of between 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Due to higher home energy costs, in 2025, annual real disposable income will fall by $170 million, within a range of $101 million and $230 million.

Oregon is One of the Nation’s Leaders in Clean Energy Generation

Oregon is ranked 48th out of 50 states in the amount of carbon dioxide and nitrogen oxide produced per unit of electricity generated. The state is also 46th in the amount of sulfur dioxide per unit of electricity generated. This is mainly due to Oregon’s high use of hydroelectricity.[2]

 

 

 

Emissions (thousand metric tons) Rank out of U.S. States
Sulfur Dioxide 11 44
Nitrogen Oxide 12 43
Carbon Dioxide 7,088 42
Sulfur Dioxide (lbs/MWh) 0.5 46
Nitrogen Oxide (lbs/MWh) 0.5 48
Carbon Dioxide (lbs/MWh) 293 48

 

 

The Energy Information Administration currently considers hydroelectricity to be a renewable energy source. When hydroelectricity is defined as renewable energy, Oregon is third out of the entire nation in capacity and generation of renewable energy, generating more than 60% of its energy from renewables.

 

In contrast, for the nation as a whole, renewable sources supply approximately eight percent of total electric power generation.[3]

 

Conclusion

 

Establishing a strict politically motivated definition for renewable energy does not acknowledge the vast amount of clean electricity that the state is producing and using.

 

Excluding hydroelectricity from the RPS will also cause significant negative economic impacts on the state’s economy as utilities are forced to increase their percentage of expensive and unreliable sources of energy.

 

It is best to establish a realistic definition of renewable energy, finally acknowledge our clean energy production and begin reforming a forceful and unrealistic push for expensive renewable energy sources.


[1] The Economic Impact of Oregon’s Renewable Portfolio Standard, Cascade Policy Institute. March 10, 2011. Available at http://cascadepolicy.org/news/2011/03/10/new-study-forcing-oregonians-to-purchase-renewable-energy-proves-costly/

[2] Energy Information Administration 2008. Statistics are for 2006.

[3] Energy Information Administration.

 

Oops! Renewable Energy Costs Oregon Billions

In 2007, Oregon legislators decided they would force Oregonians to purchase renewable energy whether or not they wanted it or could afford it. Legislators proclaimed this would help the Oregon economy and make our energy system more affordable and reliable. They were wrong.

 

Last year, one in 30 Oregonians had their electricity cut off due to inability to pay, and enrollment in the low-income energy assistance program has increased significantly. On January 1, 2011, electricity rates increased significantly for Oregon households: Pacific Power rates increased by 14.5% and PGE rates by 4.2%. PGE also added a “Renewable Resource Adjustment” to ratepayers’ bills in January 2010. Currently, this rate is set at 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. Rate increases such as these will be the norm over the next fifteen years as utilities work to comply with restrictive energy policies on the state and the federal levels.

 

But legislators proclaimed that the 2007 renewable energy mandate would help “accelerate the transition to a more reliable and more affordable energy system.” What went wrong?

 

Unfortunately, renewable energy costs more than traditional energy sources and is often less reliable. Although generating energy from wind turbines and solar panels is essentially free, the costs of construction, maintenance and integrating inconsistent energy into the grid are prohibitively expensive. Thus, adding more renewable energy will increase costs and cause substantial economic hardships for Oregonians and Oregon businesses.

 

A Cascade Policy Institute report, The Economic Impact of Oregon’s Renewable Portfolio Standard, exposes the cost of renewable mandates on the Oregon economy. Over the period of 2015-2025, the average Oregonian household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641 and the average industrial business an extra $80,115. Over the same period, the mandate will cost Oregonians an additional $6.811 billion over conventional power, within a range of $4.009 billion and $9.310 billion.

 

Higher costs will lead to loss of jobs as well. By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Legislators may be able to justify higher electricity costs if environmental benefits, in terms of reduced emissions, outweigh the costs. However, it is unclear that the use of renewable energy resources, especially wind and solar, actually reduces emissions. Due to their intermittency, wind and solar require significant backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. As a result, a recent study found that wind power actually increases pollution and greenhouse gas emissions.

 

Also, businesses and industries with high electricity usage likely will move their production, and emissions, out of Oregon to locations with lower electricity prices. Therefore, increasing renewable energy in the state will not reduce global emissions, but rather send jobs and capital investment outside the state.

 

In the end, renewable energy can and should expand according to voluntary purchases that reflect true demand. Government should not be mandating that citizens purchase a product they may not value or cannot afford.

 

It is time to face the truth. Legislators thought that by forcing Oregonians to purchase renewable energy they could make electricity more affordable and reliable. They were wrong. As a first step, legislators should repeal the renewable energy mandate and other restrictive energy policies before electricity costs spiral out of control. In addition, future energy policies need to be subject to a rigorous analysis of economic costs and environmental benefits.

Renewable Energy: Leaving Oregonians out in the Cold

In 2010, approximately one in 30 Oregonians had their electricity cut off due to inability to pay. Enrollment in the low-income assistance program has increased significantly in the past few years. Part of this was undoubtedly due to the recession, but mandating the addition of more renewable energy to the grid has and will continue to increase electricity rates. Ever-increasing rates will leave even more Oregonians unable to pay their bills.

In 2007, Oregon legislators passed Senate Bill 838 which established a state Renewable Portfolio Standard (RPS), effectively forcing utility customers to purchase renewable energy. A recent economic analysis by Cascade Policy Institute reveals this bill has significant negative consequences which are just beginning to come to light.

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New Study: Forcing Oregonians to Purchase Renewable Energy Proves Costly

Cascade Policy Institute has released a new study showing that the Oregon legislature’s renewable energy mandates passed in 2007 will be costly to citizens and will threaten standards of living and economic recovery.

The Oregon legislature has officially convened, and legislators are hard at work crafting or reforming energy policy. With an economy in recession, budget shortfalls and a recent and significant increase in electricity rates, legislators have much to address with regard to how we generate electricity in this state.

Renewable energy mandates and other restrictive energy policies are just beginning to cause financial burdens to Oregonians and, according to Cascade’s report, over the next 15 years much more damage will be done.

The report, The Economic Impact of Oregon’s Renewable Portfolio Standard, prepared by economists at the Beacon Hill Institute at Suffolk University in Boston, found that mandates forcing renewable energy on ratepayers will increase electricity rates significantly. Between 2015 and 2025, the average Oregon household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641, and the average industrial business an extra $80,115.

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