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Combating the Casual Lie

SOURCE: AP/Harry Hamburg

Sen. David Vitter (R-LA) used a CAP co-authored report to assert that the pending energy bill would destroy jobs in the oil industry. This figure results from a gross distortion of a finding in the report.

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During the 2008 presidential election, Barack Obama warned us of a “silly season” that can at times infect the political process. That season arrived early in Washington this past month.

Various conflicted groups and most recently a U.S. Senator are making attempts to distort studies about the potential costs of implementing carbon cap-and-trade legislation to impede the development of an ambitious plan to create green jobs and solve the problem of global warming. The first egregious effort was the distortion of a two-year-old study by the Massachusetts Institute of Technology, against the objections of its authors—a distortion that argues the climate change bill proposed by Reps. Henry Waxman (D-MA) and Edward Markey (D-MA) will increase household energy bills by $3,100 a year.

That’s a fundamentally dishonest distortion of the MIT study, yet the effort continues to frighten the American people away from solving one of the greatest threats to our health, environmental and financial security. Others went to even further extremes to claim that the price tag for cap-and-trade is even higher.

Now in such an environment we probably should not be surprised to find that research generated by the Center for American Progress would also be distorted for questionable purposes. But we hadn’t expected it from a U.S. Senator. Last night, in a speech on the Senate floor, Sen. David Vitter (R-LA) used our co-authored report "Green Recovery" to assert that the pending energy bill would destroy jobs in the oil industry. “According to a preliminary estimate based on Center for American Progress data, 271,000 oil and gas jobs would be destroyed annually by the administration’s proposed new taxes and fees on energy,” Vitter falsely claimed.

This figure apparently originated from and is repeated word for word in a “truth primer” circulated by the American Petroleum Institute earlier this month and a Conoco Philips fact sheet on the energy bill.

So far as we are able to discern, this figure results from a gross distortion of a finding in "Green Recovery"—a report that has nothing to do with energy taxes, the energy bill, or the impacts of a cap-and-trade system on energy costs. In that report we worked with the Political Economy Research Institute at the University of Massachusetts at Amherst to model the number of jobs that could be created through a hypothetical two-year, $100 billion investment in a green recovery stimulus package with a focus in six green infrastructure areas. For comparison, we also modeled what would happen if the same $100 billion were spent on a similar stimulus investment in the oil industry. We found that a two-year green stimulus would create 2 million jobs while a two-year stimulus directed through the oil industry would create only 542,000 jobs.

Sen. Vittner’s 271,000 job-loss claim is half of our estimated job-creation figure of 542,000. Since our number was generated to examine how many jobs could be created in a two-year stimulus package, we can only assume that someone took our figure of the potential creation of 542,000 jobs in the oil industry, divided it by half, and came up with a number of jobs that could be created in one year as opposed to two—namely 271,000. Then they flipped this reasoning on its head and announced that we had demonstrated, somehow, that a tax on the oil industry would result in the same job losses. A few steps later this fictitious number is pronounced as a finding in the well of the Senate.

This is the best assumption that we can make about how this number was generated using any of our research at American Progress as there is no citation of the source of this figure in any of the places it is used. The only other place we could find the number 271,000 anywhere in our published work was in a 2005 report we did on the number of Iraqi security forces the U.S. government wanted to train by 2006. That figure has about as much to do with the claim that tax increases on the oil industry will result in the loss of 271,000 jobs as do the figures we generated in our "Green Recovery" report.

The important point is this: How could one flip this number on its head and conclude that a tax on the oil and gas industry would result in the loss of 271,000 jobs?

The fact is that you can’t.

First, what we modeled was the impact of a short-term stimulus investment in job creation within a specific industry sector, not a tax on that industry. The two do not work the same way and would not result in the same positive or negative numbers. To suggest that our research demonstrated anything about the number of jobs that would be “destroyed annually by the administration’s proposed new taxes and fees on energy,” let alone put the figure of 271,000 on it, is false and misleading. That simply wasn’t the hypothesis we tested.

This flagrant abuse of our analysis would be comical, if it weren’t intentionally being used to generate public fear on a matter of such grave national importance—so much for the American Petroleum Institute’s “truth” primer.

Second, one could insist that we’ve proven that X amount of money equals Y amount of oil industry jobs. If we showed that putting that money in the industry gets a certain positive result then taking it out gets the same negative result. But such an easy substitution, which we hasten to add, was never explicitly mentioned in any of the places where our research was misused, would not work either. If we were to provide a $50 billion tax cut for the oil industry, as opposed to raising their taxes the same amount, this would not necessarily result in job creation or anything else. It need do nothing more than raise profits for oil companies. This is simply a matter for separate analysis.

Third, though it doesn’t come out directly in any of the places that mention the 271,000 number, their claim could be that if we transfer subsides currently going to the oil industry to a program to create green jobs then this will result in a loss in oil industry jobs against gains in green jobs. But as we have explained in detail elsewhere our research demonstrates that there is not a necessary one-for-one substitution for investment in green job gains to other job losses. What we did demonstrate was that such an investment would generate four times the number of jobs as a similar investment in a stimulus directed at the oil industry.

That’s not a claim about job substitution.

Finally, the suggestion here could be that the trade-off is between the currently proposed cap-and-trade legislation and jobs in the oil industry. Shortly after mentioning our study in his floor speech last night, Sen. Vitter claims that one of the threats he sees directed at the energy industry is a cap-and-trade program that he says is really “a tax on energy.” But, again, our "Green Recovery" study did not measure the job impact of a cap-and-trade system but rather the impact of a positive investment in job creation in different sectors of the economy. But if a cap-and-trade system, along with a variety of other smart policy measures such as some of those included in the Waxman-Markey bill, did direct resources toward the promotion of green jobs, then one could use our research to conclude that it would have a net positive impact on overall job creation by driving new investment into productive sectors of the economy—something we urgently need right now.

A “silly season” clearly is upon us in Washington D.C. this spring. Proponents of the status quo have tried to turn an encouraging study that outlines a positive path to rebuild the economy into a vain attempt to scare the American people. It is unfortunate, but at least thanks to Sen. Vitter, we’ve unearthed this gross distortion of our careful and painstaking research. The oil industry’s document was evidently repeated and passed on without question until it wound up presented as a relevant finding for a public debate in the halls of the Senate.

Who knows what other distortions and misinformation are buried in that piece of work or in other “sky is falling” pronouncements about cap-and-trade legislation or green jobs which are proliferating this week? The bottom line is that in the face of substantial evidence that addressing global warming and investing in a clean energy economy today will produce substantial benefits for the American people, those who want to stand in the way of change are running scared. As the dust settles, we are confident that voters and their elected leaders will see through these shameful scare tactics.

It is well past time to join together across party lines and regions of the country and work together in finding smart policies to rebuild our economy and address the serious economic and security threats posed by dependence on polluting and imported energy. This debate is too important to be diverted by false claims and scare tactics.

It’s simply wrong to resort to such tactics as we try to rebuild our economy and address the serious problem that threatens our daily lives and our children’s future.

Bracken Hendricks and Andrew Light are Senior Fellows at the Center for American Progress. For factual information on our energy and environmental work, please go to the Energy and Environment page of our website.

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