Back in June, Renewable Energy Magazine reported on the publication of a European Commission study on the impact of renewable energy policy on economic growth and employment in the European Union (Employ-RES) showing that reaching 2020 renewable energy targets is expected to lead to around 2.8 million jobs in the renewable energy sector.

At that time, we highlighted that this study contrasted starkly with Dr. Gabriel Calzada’s report published earlier in the year entitled “A study of the effects on employment of public aid to renewable energy sources”, which examines the experience in Spain and suggests that every renewable job created by the Spanish government destroyed an average of 2.2 other jobs and that each "green" megawatt installed in Spain destroyed 5.39 jobs in non-energy sectors.

The Exxon-funded libertarian’s conclusions were widely cited in the US at the time by GOP leaders, right-wing columnists, conservative think tanks, and Big Oil front groups to attack President Obama’s green economic agenda, but have now been debunked yet again by an official publication of the US Department of Energy’s NREL.

According to the NREL, the Spanish author’s claim that public investment in renewables destroys jobs “is not supported by their work”. The NREL has found that the analysis performed by Calzada diverges significantly from traditional methodologies used to estimate employment impacts from renewable energy and, indeed, does not actually reflect an employment impact analysis. As such, the NREL concludes that the primary conclusion made by Calzada that policy support of renewable energy results in net jobs losses is not supported by their work.

NREL reveals that what Republicans have called a “50-page empirical study” could have been written by ten-year-olds. All the study does is calculate two ratios of Spanish economic figures — renewable subsidies vs. private capital and subsidies vs. average productivity—and then draw extravagant conclusions not only about the Spanish economy, but projects them onto the United States.

A number of the fundamental limitations, technical errors, and false assumptions drawn from NREL’s analysis of Calzada’s work of pseudo-economics include:

The metrics used in the Spanish study are not jobs impact estimates. The primary conclusion of the report is that the Spanish economy has experienced job loss as a result of its renewable energy installations. However, comparing the renewable energy subsidy per job with the Spanish economy’s average capital per job and average productivity per job is not a measure of job loss.

The report lacks transparency and supporting statistics. It is striking that the authors’ calculations with two very different economic metrics generate the same result. The authors claim this increases their confidence in their result. However, because there is no statistical analysis, it does not seem reasonable to draw conclusions regarding confidence in either result.

The authors also fail to justify their chosen methodology or cite others who have applied a similar methodology. The authors assume that a dollar spent by the government is less efficient than a dollar spent by private industry and that it crowds out private investment. Government spending may be more or less efficient than private investment. To the extent that government spending is a correction for market failures (e.g., existing fossil fuel subsidies, environmental externalities), it is less likely to represent an inefficient allocation of resources. Furthermore, there is no justification given for the assumption that government spending (e.g., tax credits or subsidies) would force out private investment. This assumption is fundamental to the conclusion that Spain’s renewable energy policy has resulted in job loss.

Calzada also “fails to account for technology export potential,” “relies on jobs estimates that were developed in 2003 and do not reflect Spain’s renewable energy industries in 2009,” and “relies on jobs as the sole metric to assess the value of renewable energy.” NREL’s Suzanne Tegen, a Ph.D. energy market analyst, and Eric Lantz conclude with a summary of what serious economic analysis of the impact of renewable energy investments has found:

In general, comprehensive analyses show that net employment impacts are sensitive to assumptions regarding future energy prices, strategies for addressing greenhouse gas (GHG) emissions reductions, and the capacity to export technology. With increased awareness of potential energy price scenarios, recent research has found that it is only when conventional energy prices are forecast to be very low that net employment impacts from RE investments are negative.

A number of other authorities have also criticised Gabriel Calzada’s work, including the Instituto Sindical de Trabajo, Ambiente y Salud (Spanish Union Institute of Work, Environment and Health supported by the Spanish trade union, Confederation CCOO) which has analysed the study in detail, reporting that: “the document has been prepared to attract media attention and does not describe the methodology underlying the analysis performed. It does not present any evidence that the growth of renewable energies destroys jobs, in contrast to many previous studies which all agree that renewable energies are net job creators”. Guillermo Arregui, Manuel Garí, Javier Gómez and Begoña María–Tomé from the Instituto Sindical de Trabajo, Ambiente y Salud add that: “one cannot ignore the facts: renewable energies are labour intensive”.

José Luis García, Director of Energy and Climate Change for Greenpeace, also explained in an interview with Renewable Energy Magazine at the start of July that he believes the Calzada Report presents incorrect data with the explicit intention of attacking renewable energies. “The Calzada Report has been prepared by the author who has been a fellow of the Centre for the New Europe, a think tank which has received $170,000 from the multinational oil company Exxon, developed with the aim of boycotting the Kyoto protocol”. As part of this strategy and in view of the fact that renewables can no longer be ignored, “what these neo-conservative centres are trying to do is impede their growth. This is the only reason why research such as this has been financed”, declares José Luis García.

The NREL’s paper is available for download at the following address: http://www.nrel.gov/docs/fy09osti/46261.pdf

For additional information:

NREL