Environmental Law

California Energy Policies Boost Jobs, Economy, Study Says

By Dennis Pfaff and Kevin Livingston, Editors

California's energy efficiency policies enacted since the 1970s have served to boost the state's economy by hundreds of thousands of jobs and billions of dollars, according to a new study released Monday.

The analysis, produced by a researcher at the Center for Energy, Resources and Economic Sustainability at the University of California-Berkeley, also found economic benefits from policies to enact California's groundbreaking climate change law, AB 32. In fact, the new research suggested a more optimistic future than even the state's own recent analysis of the same subject.

Funded by Next 10, a nonprofit foundation, the study found that California's energy policies, including those that promote efficiency standards for utilities, buildings and appliances, had resulted in per-capita energy use remaining level in the state while it increased by 50 percent nationally. Those policies also created 1.5 million additional jobs with a total payroll of more than $45 billion, it said. It estimated households saved $56 billion in energy costs between 1972 and 2006.

In a statement accompanying the report, Professor David Roland-Holst, the study's author, put the findings in the context of the current economic uncertainty, as well as the state's blueprint, known as a "scoping plan" for the climate change law:

“Our analysis provides solid evidence that California’s legacy of energy policy has grown the economy, created jobs and put billions of dollars into the pockets of consumers. At this pivotal moment in history, as global markets teeter on the financial edge, our study reveals the economic power of energy innovation and efficiency, and the promise for California if the state redoubles its efforts as proposed in the Draft Scoping Plan to implement the Global Warming Solutions Act (AB
32).”

The report got considerable media attention Monday, including articles in The New York Times, the San Jose Mercury News and the Los Angeles Times. 

The report estimated that the state's policies to implement AB 32 could increase the state's economy by $76 billion, increasing real household income by $48 billion and creating as many as 403,000 new jobs in sectors related to energy efficiency and climate. The numbers are better than the state's own estimates, a difference the report attributes to the fact that the Berkeley research incorporated the potential for innovation, while the state's analysis assumed technology characteristics remained static.

Among other key points in the report, it found that the economic benefits of energy efficiency innovations had a compounding effect. For instance, according to the documents released Monday, it estimated that the first 1.4 percent of annual efficiency gain produced 181,000 new jobs, while an additional 1 percent created 222,000 more. It also said that clearly establishing a price for carbon emissions provides an economic stimulus for efficiency innovation.

California just days ago released its updated set of plans for complying with AB 32, which demands that the state cut its greenhouse gas emissions to 1990 levels by 2020, about 15 percent below current levels. The plans, which are scheduled for adoption by state air pollution regulators late this year, include participation in a cap-and-trade system that would put a price on carbon emissions. The state also recently moved forward with establishing aggressive green building standards.

California utility regulators meanwhile even more recently moved ahead with a sweeping plan to promote energy efficiency across the state, and officials in the state have even unveiled a major effort to shave energy use by its enormous prison system.  

--Dennis Pfaff of Thelen LLP  

Photo: Energy efficient home, Orange County, California; courtesy of U.S. Department of Energy-National Renewable Energy Laboratory; credit: Sara Farrar

Full post as published by Climate Law Update on October 20, 2008 (boomark / email).