U.S. Department of Energy Energy Efficiency and Renewable Energy

NREL Response to the Report Study of the Effects on Employment of Public Aid to Renewable Energy Sources from King Juan Carlos University (Spain)

Job generation has been a part of the national dialogue surrounding energy policy and renewable energy (RE) for many years. RE advocates tout the ability of renewable energy to support new job opportunities in rural locations and the manufacturing sector. Others argue that spending on renewable energy is an inefficient allocation of resources and can result in job losses in the broader economy.

The report Study of the Effects on Employment of Public Aid to Renewable Energy Sources, from King Juan Carlos University in Spain, is one recent addition to this debate. The report asserts that, on average, every renewable energy job in Spain “destroyed” 2.2 jobs in the broader Spanish economy. The authors
also apply this ratio in the U.S. context to estimate expected job loss from renewable energy development and policy in the United States (Alvarez et al. 2009).

The analysis by the authors from King Juan Carlos University represents a significant divergence from traditional methodologies used to estimate employment impacts from renewable energy. In fact, the methodology does not reflect an employment impact analysis. Accordingly, the primary conclusion made by the authors – policy support of renewable energy results in net jobs losses – is not supported by their work.

This white paper discusses fundamental and technical limitations of the analysis conducted by King Juan Carlos University and notes critical shortcomings in assumptions implicit in the conclusions. The white paper also includes a review of traditional employment impact analyses that rely on accepted, peer-reviewed
methodologies, and it highlights specific variables that can significantly influence the results of employment impact analysis.

Date
August, 2009
Topic
Audience
Resource Type
Resource Source
Eric Lantz and Suzanne Tegen (NREL)