Next monday radio listeners in Philadelphia will have a treat. I'll be on the 1020am NPR radio show along with Duke's Gary Gereffi and we will be talking about "green jobs". I anticipate that I will be asked to play "bad cop". Gary has staked out the role of "good cop" based on his November 2008 Green Jobs Study by Duke's Gary Gereffi et. al.

In his report Gary, discusses promising green manufacturing industries;

Chapter 1: LED Lighting
Chapter 2: High-Performance Windows
Chapter 3: Auxiliary Power Units
Chapter 4: Concentrating Solar Power
Chapter 5: Super Soil Systems
Chapter 6: Heat Pump Water Heaters
Chapter 7: Recycling Industrial Waste Energy

For each of these industries, I have a few questions;

1. Are these industries where the "first mover" will have a long run cost advantage? Are there reasons to believe that there are sharp learning by doing effects here such average cost declines with cumulative experience?

2. What human capital is required for workers in such jobs? Do you need a PHD to do these jobs or are these guys hammering green nails?

3. Given that the UAW and other labor unions have sponsored this research, I'm guessing that these will be union jobs. In the short run these will be "high" paying jobs relative to alternative work but in the medium term, will this artificial wage premium push these industries to locate in China and other cheaper countries? How will U.S manufacturing avoid repeating with these green jobs what happened in the car industry?

put bluntly, what is our comparative advantage in producing these goods? If anyone can make then, then these industries will migrate to low wage nations.

4. What government policies do these nascent industries want to help them get off the ground? Would a carbon tax suffice? or do they need government to "pick winners" and offer explicit subsidies?

I agree with Gary that these industries offer the prospects of some job creation but other jobs will be destroyed by carbon taxes. To answer what is the net effect requires some knowledge of the shape of demand curves for various products. If aggregate demand for energy intensive goods is highly price sensititve (elastic demand), then a carbon tax will "destroy" many jobs for this industry as its long run cost function shifts up.

There are some general equilibrium issues that the sociology team needs to think through. Despite this point, I certainly find his study to be interesting.