Van Jones Doesn’t Need to Worry about the TPP

CNN contributor Van Jones has an op-ed in the San Francisco Chronicle in which he worries that the Trans Pacific Partnership (TPP) will undermine a California program to promote solar energy:

Because TPP would threaten a successful California rebate program for green technologies that are made in-state, the deal could result in the elimination of good-paying green jobs in fields like solar and wind manufacturing and energy efficiency. Green jobs employ all kinds of people — truck drivers, welders, secretaries, scientists — all across the state. These jobs can pull people out of poverty while protecting the planet.

I have some good news for him: That California rebate program probably already violates WTO rules, and, in fact, is one of eight U.S. state renewable energy programs that were just challenged by India in a formal WTO complaint. As a result, the TPP is not particularly important on this issue.  The WTO already has it covered.

I also have some even better news for him: These kinds of programs do not create jobs, and are bad for the environment as well, so we should be happy to see them go (either eliminating them on our own, or in response to findings of violation under international trade agreements).

What exactly is wrong with these programs?  Think about the impact of having eight U.S. states (that’s how many were mentioned in India’s complaint), and countless localities around the world, encouraging local production of solar panels or other forms of energy. The end result of such policies is clear: Lots of small, inefficient producers, leading to more expensive energy. That doesn’t sound very green.

As for the jobs argument, advocates of policies that discriminate in favor of local companies should also factor into their calculations the jobs lost when the rest of the world adopts similar policies. These programs are not secret, and once someone starts doing it, the practice proliferates. Even if the California policies led to the purchase of locally made goods, when other governments do the same thing it reduces the sales of California made goods to other jurisdictions.  The end result, therefore, is not additional jobs in California, but rather products that are more expensive and less efficiently made.