Institute for Research in Economic and Fiscal issues

IREF Europe - Institute for Research in Economic and Fiscal issues

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A Green Economy or An Economy Painted in Green

What if the « green economy » was just a joke? It has become trendy to label every activity as green. Thus environmentalism seems to be at the heart of the economy. Lucas Léger, IREF researcher, analyzed the Happy Planet Index and reveals the trick.

According to Happy Planet Index, Cuba is among the top fifteen countries as far as happiness and environmental friendliness. Raoul Castro’s “kind tyranny” would be better off than its American neighbor which lies in the depth of the rankings. No doubt that the Cuban immigration in the US and not the other way around is explained by this ranking. Havana: a city that takes care of the environment and its inhabitants. Any New Yorker would be attracted by a new start in this kind dictatorship’s heaven! This index’ conclusions are doubtful - Afghanistan is better ranked than Denmark - yet it is pointing out the recent trend among Western governments to greenwash their economy.

Green growth with green jobs is promoted by numerous governments. A recent Manhattan Institute’s publication shows why the United States is as enthusiastic as France on that topic. Under the Bush Administration, in 2007, a law allowed public funding to be used to fund professional training for some highly qualified green jobs, renovation of buildings and energetic efficiency. President Obama strengthened these incentives with his 2009 stimulus plan. He greenwashed the economy with a 2.3 billion dollars tax credit aimed at the least polluting companies. But what exactly lies behind the expression “green jobs”? In the United States as in France, whatever job closely or – very - remotely connected to the environment can be considered as green thanks to a very large definition.

The Bureau of Labor Statistics defines green jobs as such:

> 1) jobs in sectors providing goods and services protecting the environment or natural resources

> 2) jobs aiming at respecting environment or limiting the use of natural resources

According to this definition, a job in a museum about science or environment will be considered as a green job. On the contrary, job in a museum of modern arts will not be considered as a green job. With such definition, it is not surprising to see a growing number of employees protecting the planet.

France is in the same trend. French jobs nomenclatures indicate which jobs are considered as green – aiming directly at protecting the environment - or greenish – which aim is indirectly about environment. But including greenish jobs into the definition of green jobs is doubtful. For instance, can a group leader for teenagers in a summer camp be considered as a job protecting the environment, even indirectly?

At the European level, Eurostat is counting « environmental activities » thus considering jobs that are aiming at protecting environment or managing natural resources. Thus waste management, protection and remediation of soil groundwater and surface water as the management of energy resources are all considered as green activities. Yet, all these jobs are created by common sense and not by a sudden awareness of environmental issues. Furthermore these green activities represent only 1.7% of all employments. And 22% of them are jobs in public services coming from public work government. As such, 45% of green jobs are financed by our taxes.

It is wondered if the definition of green jobs is only a clever communication move. The aim would be to neutralize both Kyoto and Copenhagen summits failures rather than revealing an economic reality. Indeed, it must be pointed out that green jobs depend on public decisions and that the private sector is heavily subsidized due to low return on investment concerning wind-powered turbines or photovoltaics.

As the IREF has already pointed out, the cost of these green jobs is huge. The bad side of the story is that the number of green jobs is about to dramatically increase because of their very definition as we saw.

Read the French version of Lucas Léger’s article : "Economie verte ou économie peinte en vert"

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