With jobs and the economy topping the concerns of Washington state residents, Congressman Jay Inslee recently unveiled his proposal to create “a new economy for Washington” which he hopes will put the state “at the forefront of a clean energy revolution in job creation.” His proposals echo much of what he wrote in his co-authored book Apollo’s Fire. Outlining his ideas for green jobs in that book, he confidently wrote “It would be comforting to avoid the prospect of being proven wrong by the passage of time. But your authors are built of sterner stock. We refuse to take refuge in the privilege of punditry to cloak our comments in vague surmises.”
With the hindsight of only a couple years, time has been particularly unkind to Inslee and his new jobs proposal provides further examples. Three issues stand out.
First, Inslee’s view of the economy sees government guiding the direction of growth by focusing on “industry clusters” in a number of areas, including “clean energy.” This approach has not been fruitful in the past. Further, it has not provided the support for the economy we do currently enjoy.
The foundations of Washington’s innovation economy were not planned. Imagine Governor Dan Evans proclaiming in 1975 that the state would build clusters in software, Internet book sales and coffee. People might have concluded that he had been governor too long. Yet, those industries now provide the emblems of Washington’s economy. Predicting the future, even just 20 years ahead, is virtually impossible.
This is why government-guided efforts to create “industry clusters” have yielded poor results. Just days before Inslee released his industry-cluster approach to economic planning, the former Chair of President Obama’s Council of Economic Advisers published a piece in The New York Times arguing that clusters didn’t live up to the promises. Christina Romer wrote, that despite the notion that clustering industries creates benefits for the economy at large, “large clustering effects have been hard to find.” The results don’t meet expectations.
Second, Inslee’s clean technology briefing paper promotes the development of biofuels and even includes a quote from the CEO of General Biodiesel who praises Jay’s past support for taxpayer subsidies to biodiesel companies like his and mandates that require consumers to buy his company’s products. Biofuel companies are extremely reliant on these subsidies and without them some manufacturers have been hit severely or even shut down. So significant are the subsidies they can almost be seen as preemptive bailouts – supporting companies with the understanding they would go out of business without taxpayer funding.
Inslee promises his administration will “Create an Advanced Sustainable Biofuels Center of Excellence, led by Washington State University, to partner with private industry, local, state, and federal government.”
There is perhaps no area where the Congressman’s past claims have been proven so consistently wrong.
As I’ve mentioned before, Jay predicted that in “About 2011 … meaningful amounts of cellulosic ethanol are becoming available at service stations across the country.” In fact, Inslee supported federal mandates requiring that oil companies buy specific amounts of cellulosic ethanol in an effort to push that technology. Unfortunately, the pace of science doesn’t follow a political timeline. Cellulosic ethanol still has not been produced in any significant amount, and oil companies (and ultimately consumers) paid fines to the federal government for not purchasing a fuel that does not exist. Not only are meaningful amounts not available, virtually none is.
In his book, Inslee also highlighted canola as a promising source of biofuel, writing “canola produces roughly a hundred gallons per acre compared to fifty to sixty gallons per acre from soybeans.” Just one year after he wrote that, the EPA released its standards for renewable fuel, excluding canola as a qualifying renewable fuel.
Instead of realizing that using politics to drive the direction of pace of science is not a sound economic or environmental strategy, Congressman Inslee believes we simply need to spend more on that strategy.
Finally, Inslee pledges to increase state requirements for renewable energy. While he is vague on the specifics, his jobs plan says he will push that goal by “increasing long-term renewable energy goals.” He has supported a range of strategies in the past to meet that goal, including renewable energy mandates and subsides. Advocates of these strategies have typically pointed to success in countries like Spain and Germany to support these approaches.
Those countries, however, have abandoned the policies, even as Inslee and others look to replicate them here.
In 2008, Spain was the country most frequently cited by environmental advocates, and then-Senator Obama, as providing the model of what a country could do by heavily investing in the clean energy sector. At the time, Spain’s unemployment rate was about 8 percent. Today the unemployment rate is 23 percent(!), the socialist government abandoned the ruinous green energy subsidies and was subsequently thrown out of office.
Now, Germany is also following that path away from those subsidies. As Bjorn Lomborg recently noted, “Germany once prided itself on being the ‘photovoltaic world champion,’ doling out generous subsidies – totaling more than $130 billion, according to research from Germany’s Ruhr University – to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned, and to phase out support over the next five years.”
Closer to home, Oregon has followed similar policies, being named the nation’s top state for clean energy jobs in 2009 by the Pew Charitable Trusts. They argued that green “jobs are driving economic growth and environmental sustainability at a time when America needs both.” How has Oregon’s commitment to green jobs worked out? Since the beginning of 2009, Oregon’s unemployment rate has been consistently above the national average, even reaching 11.6 percent in June of 2009.
Hope, it has been said, is not a strategy. Yet, it seems to provide the foundation for Inslee’s jobs plan which hopes that industry clusters work here (when they haven’t worked elsewhere), that biofuels will finally offer a viable business model (despite numerous counter examples), and that Washington can avoid the green jobs fate of Spain, Germany, Oregon and others who have tried that approach. It seems a lot to hope for as a strategy for economic recovery.