The models that show that restrictions on greenhouse gas (GHG) emissions cost jobs are full employment models. The story in these models is that restrictions on GHG make the economy less efficient, thereby reducing labor productivity. Lower labor productivity causes wages to fall, which means that fewer people are willing to work. Therefore, restrictions on GHG emissions cost jobs. This is probably worth repeating about 200,000 times since almost no one who talks or writes about the subject seems to have a clue. This basic point would have been worth noting in an NYT article that cites the oil industry's complaint: “In the midst of a severe recession with 10.2 percent national unemployment, our economy, the creation of jobs and consumer impact should take much greater precedence over attempts to impress international bureaucrats during an annual convention.” The NYT should have pointed out that the industry spokesperson is either deliberately lying or does not understand how the economy works. In a downturn, the government can create jobs by reducing GHG emissions, for example, by paying workers to insulate buildings, paying people to buy more fuel efficient cars (cash for clunkers), or subsidizing the use of clean energy such as solar or wind power. While these government subsidies would pull away resources from other sectors if the economy were fully employed, this is not an issue, "in the midst of a severe recession with 10.2 percent national unemployment." The article should have pointed this fact out to readers.
--Dean Baker
