Economic Policy Makers Beware: Estimating the Job Impact of Public Investment in Biofuel Plants

Despite all the hoopla about the green economy and clean tech, skeptics are beginning to ask questions about the projections of job creation from investments in renewable energy and energy efficiency. Since these projections are used to support public investment in “clean tech” firms via tax incentives, economic developers at the state and local level need to know how to assess them. In this policy brief, we examine 16 studies of the economic impact of ethanol plants. First, we discuss what the studies have to say about the economic impact of ethanol plants – why are these plants expected to create jobs and in what ways? We then look at the methods used to estimate the job creation impact of ethanol bio-fuel plants and at the assumptions underlying estimation models. Finally we present a list of questions that public officials and economic developers need to ask in assessing claims for ethanol plant job creation and its utility as a public investment.U.S. Department of Agricultur