*bangs head*

1 - The whole point of doing research in green technology is to improve it's efficiencies. Human Intelligence + Funding can do amazing things. Electricity inefficiencies ran upwards of 80-90% for electricity in 1990, research changed that. Investment in research is what makes things more efficient, which is why we should invest in green tech research. Given the research and laboratory advances on a smaller-scale out there, it looks like all we need is the research funding spark and some incentives to start to see efficiencies soar.

2 - The analysis of job growth flies in the face of 30 years of economic research. There are two primary drivers of economic and job growth. The top one is human capital, the investment in education . The second one is technological innovation. The U.S. economy has been so successful and outpacing the world, up until the last two decades where we have slowed down and the rest of the world is catching up, are because of those two reasons. To argue that a massive growth in technological innovation in green technologies wouldn't produce any job growth and would just be a shifting around of jobs is hard to accept given what history tells us. This argument was actually the same argument used in the 1930s,1940s,1950s,1960s etc against investing in research. That it would just "shift" jobs around. Instead, both private and public investment has led to an explosion of economic and job growth. Our unemployment rates for the last decades would have been much higher were it not for this explosion (I believe it was Romer that calculated this but I'm not certain). Will there be shifting of jobs? Of course, but there will also be new jobs created from the technological growth. Of course, human capital is being undervalued by Washington so much in recent years the growth would be less than one would see if we had both. In short? History doesn't agree.

3 - That analysis by Alvarez is pathetic. The Spain incident was more a result of economic conditions . Due to a loss of credit, capital, and investment the jobs are not being created because there initiative has stagnated. Those jobs wouldn't have been lost otherwise, but that's more due to economic conditions than anything else. You can actually see the same exact phenomena occur among sectors when investments are being shifted from one area to another and then a recession hits.

For example, industrial production was booming and people were moving into that sector when the current recession hit, plunging that growth, and leaving unemployed people as a result of this shift coupled with economic recessions. This doesn't mean shifting are investments to industrial production was a bad policy (although it wasn't government designed, it was a business decision). Even during the Great Depression you saw this. Income, investment, and labor was shifting rapidly into infrastructure and construction (away from things like farming etc). When the collapse hit, those investments plunged and left workers who were shifting between industries to be unemployed because they were no longer needed in, say farming because the industry was falling prior, and didn't have other skills besides construction or farming. Does this mean the pre- depression programs encouraging infrastructure and construction, along with natural private mechanisms nudging that, caused those workers unemployment and that those programs were a bad idea? Of course not.

(In fact, that is primarily the reason the New Deal had so much infrastructure / construction projects since those displayed "in-between workers" added on dramatically to the already high unemployment in the sector).

BTW, a lot of Alvarez's analysis is way off since he repeatedly mistakes accounting identities as describing economic activity.

Which leads to nonsense like this:

"* The average green job created since 2000 added $774,000 in costs to consumers' bills."

He first goes about ignoring economic gains from the production of green technology, he falsely concludes that the 100% of investment was spent directly on employment (which is obviously not the case, that's unbelievably stupid); he has this nonsensical "crowing out" argument based on accounting identities that do not describe behavior because of increased public debt; he assumes for no reason that companies moved themselves in response to this legislation; his capital ratios are entirely wrong; he assumes there jobs are "inefficient" for no reason at all; he devalues the effects of the financial crisis, and he doesn't understand externalities.

This ruins his conclusion. And, in fact, the Spanish government agrees with me considering they cite where areas where they invested most saw the highest growth in GDP and lowest unemployment - flying in the face of his analysis. This man is a joke, there is a reason all economists ignored this study - it was and is worthless and just plan wrong.