The demise of the climate bill has me thinking about green jobs again. I’ve never been a big fan of the green jobs argument on its substance. But set that aside for now. The public seems to like green jobs (or at least clean energy jobs). So here’s my question: Why did it not work on the politics?
Two answers come to mind. First, voters don’t care about net job creation during a recession. If they’re unemployed, they care about creating new jobs, but if they’re employed , they just care about saving the ones they already have. Say that a climate bill could be shown to yield a net 200,000 jobs by creating 1.2 million new jobs while destroying 1 million others. (These are just made up numbers.) Voters who currently have jobs will focus on the downside risk, and they will really not like it. The fact that a climate bill is a net job creator will not matter to them. Voters without jobs might like the deal, but they are much fewer in number. Basically, cap-and-trade introduces uncertainty at an individual level (though it does the opposite for actual investors); in the current economic climate, that scares people into thinking that they will lose their jobs.
Second, once you turn climate policy into jobs policy, you should expect to get stuck with all the traditional left-right orthodoxies that come with it. Conservatives tend to believe that the only tax policies that can generate employment are tax cuts, that the only regulations that can generate employment are ones that you get rid of, and that the only government spending that can generate jobs is spending that doesn’t happen in the first place. (I’m obviously caricaturing a bit.) The climate bill would have combined all three. Is it any surprise that so much of the country had a hard time believing that it would create lots of jobs?
This suggests two lessons going forward. First, until the economy recovers considerably, cap-and-trade is going to be a very hard sell. Anything that the public is unfamiliar with adds to uncertainty – and that is precisely what people don’t want. Second, green jobs may poll well across a wide spectrum of voters, but that doesn’t mean that selling regulation or taxation with a jobs message will work.