In 2009, Josh Lerner of Harvard Business School published a useful book called "Boulevard of Broken Dreams." He found that for each instance in which the government has successfully promoted entrepreneurial activity, there is a pile of instances in which it failed.

Lerner details case after case where public investments produced little or nothing. But he also makes an important distinction between government efforts to set the table for entrepreneurial activity and government efforts to create jobs directly. Setting the table means building an underlying context for innovation: funding academic research, establishing clear laws, improving immigration policies, building infrastructure and keeping capital gains tax rates low. Lerner notes that one of the most important government initiatives to encourage innovation was the Bayh-Dole Act of 1980, which gave universities automatic title to research paid by the federal government.

These table-setting efforts work. The problem is the results are indirect, the jobs take a long time to emerge and the market may end up favoring old-energy sources instead of shiny new ones. So politicians invariably go for the instant rush. They try to use taxpayer money to create private jobs now. But they end up wasting billions.

We should pursue green innovation. We just shouldn't imagine these efforts will create the jobs we need.