Noticeably absent from President Obama’s latest economic-stimulus package are any further attempts to create jobs through “green” energy projects, reflecting a year in which the administration’s original, loudly trumpeted efforts proved largely unfruitful.
The long delays typical with environmentally friendly projects – combined with reports of green stimulus funds being used to create jobs in China and other countries, rather than in the U.S. – appear to have killed the administration’s appetite for pushing green projects as an economic cure.
After months of hype about the potential for green energy to stimulate job growth and lead the economy out of a recession, the results turned out to be disappointing, if not dismal. About $92 billion – more than 11 percent – of Mr. Obama’s original $814 billion of stimulus funds were targeted for renewable energy projects when the measure was pushed through Congress in early 2009.
Even some of the administration’s liberal allies have expressed skepticism over the original stimulus package’s use of green investments as a way to spur quick employment growth at home.
“Spending on renewables is slow to get out of the door. Leaks to foreign companies is an inadequate driver of jobs and growth and may not create a strong exporting industry,” said Samuel Sherraden, an economic analyst at the New America Foundation, a Washington-based progressive think tank.
Only about $20 billion of the allotted funds have been spent – the slowest disbursement rate for any category of stimulus spending. Private analysts are skeptical of White House estimates that the green funding created 190,700 jobs.
The Department of Energy estimated that 82,000 jobs have been created and has acknowledged that as much as 80 percent of some green programs, including $2.3 billion of manufacturing tax credits, went to foreign firms that employed workers primarily in countries including China, South Korea and Spain, rather than in the United States.
Peter Morici, a business professor at the University of Maryland, said much of the green stimulus funding was “squandered.”
“Large grants to build green buildings don’t generate many new jobs, except for a few architects,” he said. “Subsidies for windmills and solar panels created lots of jobs in China,” but few at home.
In one of several embarrassing disclosures for the administration, a report last fall by American University’s Investigative Reporting Workshop found that 11 U.S. wind farms used their grants to purchase 695 out of 982 wind turbines from overseas suppliers.
That report raised alarms in Congress. Leading Democrats insisted that the money be spent at home, but restrictions on the funds proved impossible without the specter of a trade war.
While lawmakers fumed, economists were not surprised that green energy companies used the funds to purchase inexpensive Chinese wind turbines. Renewable-technology firms are under the gun to bring down costs so they can compete with cheaper traditional fuels, such as gas and coal, for electricity customers.
But without restrictions that prohibit the funds from being diverted overseas, Mr. Morici said, any further spending on green energy would only continue to enrich foreign producers. Chinese manufacturers in particular have taken the lead in making renewable-energy components, just as they have come to dominate many other industries because of advantages derived from state subsidies and the country’s abundant pool of cheap labor.
In a trade complaint against China on Thursday, the United Steelworkers union charged that Beijing is trying to corner the market on green jobs by showering billions of dollars of subsidies on domestic producers and discriminating against foreign firms and goods.
With growing proof that green jobs are heading overseas, even administration sympathizers and environmental advocates have largely abandoned the idea of pushing green funding as a way to stimulate the economy.