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Obama’s European Energy Vacation

Thursday, May 28, 2009

President Obama is absolutely right that we can learn a lot from the European approach to energy. But he is dead wrong on what those lessons are.

President Barack Obama hopscotched through Europe last month, partly to cement partnerships on energy cooperation and climate change. At nearly every stop on his Grand Tour, the president noted that the United States could learn a lot from Europe in terms of clean energy production and fighting global warming. He kept it up on his return, lamenting to an Earth Day crowd in Iowa that the United States gets less than 3 percent of our electricity from renewable energy, while Denmark generates almost 20 percent of its electricity from wind power.

Obama is absolutely right that we can learn a lot from the European approach to energy. But he is dead wrong on what those lessons are. We should study what the Europeans are doing with regard to energy and the environment, and then generally do the opposite. Sadly, indications are that the Obama administration will ignore the accumulated evidence of Europe’s energy failings and instead emulate some of the worst aspects of policies across the pond.

C02 emissions have soared in most industrialized European nations during their cap-and-trade plan’s first phase earlier this decade, in most cases more than in the United States during the same period.

Take Obama’s fabled green jobs plan, which paradoxically suggests there is economic benefit to switching away from inexpensive carbon-based fuels and toward far pricier renewable energy technologies. Throughout last year’s campaign, Obama pledged he would spend $150 billion on green technologies to create “five million new jobs that pay well and can’t ever be outsourced.”

Turns out there really is a downside to forcing the marketplace to shift to energy sources that are less economical than those currently used. Spain, which instituted a green jobs program a decade ago, found this out the hard way. A study by researchers at King Juan Carlos University found that 2.2 jobs were destroyed for every green job created through government mechanisms, and those green jobs are rarely permanent. Obama has touted the Spanish experience as a model for the United States, but the study’s authors deem those policies “terribly economically counterproductive.” Simply put, they wrote, “the Spanish/EU-style ‘green jobs’ agenda now being promoted in the U.S. in fact destroys jobs.” The study has been condemned by former President Bill Clinton and left-wing groups such as the Center for American Progress, a sign that its findings have touched a nerve in the United States.

A study of a Spanish ‘green job’ program found that 2.2 jobs were destroyed for every green job created through government mechanisms, and those green jobs are rarely permanent.

Far worse is Obama’s proposal to institute a cap-and-trade regime to lower carbon dioxide emissions similar to the one European nations implemented earlier this decade. However commendable the goal may be, the evidence is clear that cap-and-trade is a monumental failure.

Emissions have soared in most industrialized European nations during the plan’s first phase, in most cases more than in the United States during the same period. Moreover, cap-and-trade has led to substantial increases in electricity bills for European consumers, hindering economic growth.

Only recently have emissions in European nations begun to drop. But that is hardly proof that cap-and-trade works. A global economic meltdown is responsible for falling emissions all over the planet, including in the United States, where no such system for curbing emissions yet exists. What the recent trends show is that there is a rough correlation between CO2 emissions and economic growth. Perhaps the only way to dramatically cut greenhouse gas emissions, it seems, is to put the brakes on prosperity.

For the better part of the last ten years, many European powers have made massive investments in renewable energy technologies such as wind and solar, at extremely high cost to their economies. This single-minded focus on green energy not only has not reduced greenhouse gas emissions in any substantial way, it has actually increased dependence on foreign sources of energy. Most of Western Europe is now dangerously dependent on natural gas from Russia, which has shown a clear willingness to use its energy supplies as a political weapon.

During his stop in Strasbourg, President Obama apologized for the United States, saying, “In America, there’s a failure to appreciate Europe’s leading role in the world.” But putting environmental pipe dreams ahead of economic and energy security shows the Europeans are not as enlightened as President Obama would have us believe.

Nuclear power now produces nearly 80 percent of France’s electricity. France even exports to neighbors.

Ironically, there is one European example worth following, and it comes from France. But so far Obama will not acknowledge it. That’s nuclear power. The French embraced nuclear power several decades ago. It now produces nearly 80 percent of the country’s electricity. France even exports to neighbors. As a result, France is insulated from the energy shocks manufactured by Kremlin autocrats threatening to cut off gas shipments in the dead of winter. France is as close to energy independent as any nation in Western Europe.

Obama almost never mentions nuclear power as part of a clean-energy solution. His hang-up seems to be nuclear waste, and he is taking steps to prevent Nevada’s Yucca Mountain repository from being built. So why not copy France and recycle nuclear waste?

Who would have thought we could take some cues from France? As for the rest of Europe, we are better off charting our own course than following their roadmap to economic ruin.

Max Schulz is a senior fellow at the Manhattan Institute.

FURTHER READING: Max Schulz also wrote “Who Should Decide the Size of Your TV?” on California’s considering a proposal to regulate big-screen TVs off the market.

Image by Darren Wamboldt/Bergman Group.

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