In his Budget speech, Alistair Darling announced a number of policies that he hopes will support growth in green industries. The key measure is "£1bn to help us combat climate change, by supporting low carbon industries and green collar jobs."
Those industries already get massive subsidies through policies such as the Renewables Obligation and the European Union Emissions Trading Scheme. Our green calculator highlights the amount this is pushing up electricity bills, 14% of the average household electrity bill is now the result of climate change policies.
The burden on business is even larger. 21% of the average industrial electricity bill is now the result of climate change policies. That burden on business destroys jobs by making it harder for them to compete with other firms abroad.
Paying for the new subsidies will also impose a new burden on business and families, reducing investment and the amount consumers have to spend. That will mean more jobs lost in the rest of the economy.
The question is, does the number of green collar jobs created outweigh the number of blue and white collar jobs destroyed?
Bloomberg reports a study by King Juan Carlos University in Spain, which suggests that more jobs might be lost than created:
"March 27 (Bloomberg) -- Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide.
For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid."
The Budget report, on page 135, claims that the number of green collar jobs will rise by 400,000 by 2015. The effect on jobs here will be highly contingent on the kind of policies used to support green industries and other economic conditions. However, if we get a similar ratio of jobs destroyed to jobs created here as they found in Spain, that could mean 880,000 jobs lost in other industries for a net loss of 480,000 jobs. That might be the reality of a "green recovery".