Spending $100 billion to create 2 million jobs

I really don’t like government subsidizing any industry when the potential market would appear to be incentive enough.

But what’s the market incentive to slowing climate change? Survival?

Thanks to a report by the Political Economy Research Institute of the University of Massachusetts-Amherst, we have one possible answer. Spend $100 billion over two years in six particular areas and the U.S. economy could create 2 million jobs.

The Green Recovery report, commissioned by the Center for American Progress, advocates fiscal stimulus for three totally non-sexy activities: retrofitting buildings to improve energy efficiency, expanding mass transit and freight rail, and constructing “smart” electric grid transmission systems.

It also deems three renewable energy technologies worthy: solar, wind and biofuels.

The researchers even calculated job creation for each state they studied. Based on $4 billion in subsidies, Pennsylvania could create 86,385 jobs, while New Jersey’s $3.2 billion could spawn 57,000.

The report is worth reading, because it applies economic rigor to what federal spending could produce. However, some caveats gave me pause, knowing the realities of life in our fair city.

For example, it says federal support for mass transit would enable areas to lower fares. I’d love to see that happen, but “SEPTA” and “fare cut” appearing in the same sentence? C’mon.

For those who’d rather shower $100 billion on the oil industry to drill offshore or elsewhere, the economists calculate that that activity would create only 542,000 U.S. jobs. And it certainly wouldn’t do lick to address our fossil fuel habit.

Presidential campaign rhetoric suggests that the next administration will be more experimental than the last when it comes to energy strategy. The longer oil stays above $100 a barrel, the more we’re going to be hearing from think tanks about what we need to do about it now.

Rebranding the urgency of global warming as a call to jobs plays well in this election year. But I can think of a lot of ways to misspend $100 billion over two years, and so can Washington.