By Christine Harbin
There’s no shortage of reasons to oppose federal wind subsidies. At Americans For Prosperity, we’ve highlighted many: it’s costly, it’s bad for the environment, it doesn’t produce cheaper energy, it’s an unreliable energy source, it’s inefficient, it’s not principled, etc. There’s a new study out today that gives us yet another reason to oppose the wind production tax credit (PTC): it doesn’t create jobs. In fact, it destroys jobs.
One of the numbers that we kept hearing in the debate over the PTC extension last year was 37,000 jobs. That’s how many jobs the wind industry’s lobbying group, the American Wind Energy Association (AWEA), claimed would be lost if the PTC expired at the end of 2012. It comes from a 2011 report that AWEA commissioned from Navigant Consulting. According to a new report from the American Energy Alliance and the National Center for Public Policy Research, this 37,000 jobs figure is deeply flawed and should not serve as a foundation for policymaking.
One problem with 37,000 figure is that it is based on faulty assumptions. The AWEA/Navigant study asked the wind industry for a forecast of how much wind would be built, ignoring data from the Joint Committee on Taxation that was more realistic. This was a mistake because the wind industry predictably provided an over-estimate of future capacity. Their estimate was based more on wishful thinking than reality—they reported the amount of capacity they hoped to produce, not would actually produce.
Next, the AWEA/Navigant study authors took these inflated estimates and plugged them into their econometric models. That’s how they coming up with the 37,000 jobs figure. As any algebra student will tell you, if you put garbage into an equation, you will get garbage out.
After debunking the jobs figure, the AEA/NCPPR report goes even further: overall jobs would be higher if the federal government would stop propping up the wind industry with handouts. That’s because wind energy creates fewer jobs than conventional sources of energy. In its study for the wind industry, Navigant failed to consider the jobs that would be created by other energy sources, such as coal and nuclear—in economics, we refer to this concept as “opportunity cost.”
The study from AWEA and NCPPR is the latest in an ever-growing library of research that shows that federal wind subsidies are very poor policy. Given that this 37,000 jobs number is deeply flawed, the AWEA and its allies should stop using this jobs figure as a reason to extend wind subsidies. The PTC is scheduled to expire again at the end of 2013, and Congress should ensure that it does. Now is the time to end this wasteful handout to the wind industry, once and for all.