US climate control supporters focus on job creation

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The four-letter word that will dominate U.S. President Barack Obama's State of the Union address on Wednesday - jobs - could be the savior for faltering climate control legislation, or at least that's environmentalists' latest hope.

Supporters of a global warming bill have failed to captivate the country with warnings of drought, disappearing polar ice caps, refugees fleeing floods and worsening disease. So, they are ramping up a more positive-sounding argument.

Forget environmental benefits and saving the planet. Clean energy, they say, could create millions of new jobs, a potentially powerful argument amid a 10 percent US unemployment rate, the worst in more than a quarter-century.

There are opposing opinions, however, on whether jobs would blossom by requiring factories and utilities to use less oil and coal, or whether the rise of more expensive solar, wind and other "green" energy would kill jobs.

"We know that clean energy is a proven job creator," Senate Environment and Public Works Committee Chairman Barbara Boxer recently told reporters.

She cited a 2009 study by researchers at the University of California Berkeley, the University of Illinois and Yale University that concluded between 918,000 and 1.9 million jobs would be created over 10 years by the climate bill passed last year by the House of Representatives.

Those added jobs would ripple through the economy, giving it a USD 39 billion to USD 111 billion boost, the researchers said.

Billions for alternative energy

Similarly, a study by the Center for American Progress and the University of Massachusetts economics department looked at the combined effects of the House-passed climate control bill and last year's economic stimulus law. The latter included tens of billions to encourage alternative energy investment.

Around 2.5 million new jobs would be created, this study concluded. But with a projected 800,000 jobs lost in connection with the declining use of fossil fuels, there would be a net 1.7 million new jobs, it said.

Neither study included the possibility of a significant expansion of construction jobs if a climate control bill is coupled with new incentives to build additional nuclear power plants, as many Senate Republicans demand.

Currently, there are about 130 million jobs in the United States. A 1-2 million jump in jobs "is not insignificant," said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. It would help recoup some of the 7.7 million jobs lost over the past two years.

But Hufbauer, who has written extensively about global warming and economics, is no fan of pegging climate control legislation to job creation.

"To me, selling climate change as a job-creating measure is the modern equivalent of selling building the pyramids as a job creating measure in Egypt," Hufbauer said.

While jobs were created, he said the "actual increase in the amount of employment is questionable," as workers in Egypt could have been engaged in a variety of other activities, such as "growing more food."

Part of the problem in projecting job creation, according to some economists, is that there are many unknown factors that could intercede over the next decade.

The University of California study, for example, noted that efficiencies encouraged by climate legislation would reduce energy and transportation costs, saving families and businesses money "they can spend on domestic goods and services, which will create jobs for Americans."

That does not address the possible increase in consumer and business costs from using alternative energies, which are still much more expensive than coal or oil. Republicans, who mostly oppose climate legislation mandating lower carbon emissions, argue that manufacturing jobs will flee to countries that haven't imposed stringent global warming laws.

'Reinventing power generation'

China will build green factories and create jobs for windmills and solar power if the United States doesn't, green advocates say. In fact, China is expected to have pulled ahead of the United States in installed wind power in 2009.

Also unknown is whether the Federal Reserve, during a period of accelerated consumer spending the UC study envisions, might have to use monetary policy to put the brakes on spending to stave off inflation.

As politicians, economists and environmentalists battle it out, the climate-jobs debate has not been bolstered by firm government statistics.

At the international climate meeting in Copenhagen last month, U.S. Commerce Secretary Gary Locke touted the prospects of "millions of blue- green- and white-collar jobs" by "reinventing" power generation, transportation and manufacturing with alternative energy.

But Locke told Reuters his agency had not done any detailed analysis of job creation and instead was relying on estimates from industry and foreign countries.

Hufbauer said that to be "really intellectually honest," legislation controlling carbon emissions should be framed as a way of buying an insurance policy against possible climate-related disasters.

In a closely watched State of the Union speech, that's unlikely to score the applause line of a jobs pitch though.