BIG MONEY, LOTS OF JOBS IN NEW ENERGY, EFFICIENCY – REPORT

Independent consultants’ research says so. Academic research says so. Anecdotal experience says so. Who DOESN’T?

Says what?

Says investing in New Energy and energy efficiency generates more jobs and revenues than it costs and provides emissions-free energy as a result.

A new report from the University of California (UC) validates previous data from the California Air Resources Board (CARB) indicating California's investment in New Energy and energy efficiency from 1972 on earned back more money in revenues and jobs than its cost.

From Sacramento to Washington, D.C., it’s time to pony up. The way to get this economy going again is to learn what every businessperson knows: You have to spend money to make money.

Experts are whispering in the blogosphere: The UC and CARB calculations of California's savings probably dramatically underestimate what the state actually saved from its energy efficiency programs and what it can save by building New Energy infrastructure.

To opponents of building New Energy: Which is the objectionable part, the high-quality new employment, the prosperity or the emissions-free energy?

From Energy Efficiency, Innovation and Job Creation in California: “California’s legacy of energy policies and resulting economic growth provides evidence that innovation and energy efficiency can make essential contributions to economic growth and stability. Had the state not embarked on its ambitious path to reduce emissions over three decades ago, the California economy would be in a significantly more vulnerable position today. Looking ahead, California’s ambitious plan to reduce greenhouse gas emissions as mandated by the California Global Warming Solutions Act (AB 32) puts the state on a more stable economic path by encouraging even greater investment in energy saving innovation. The current financial crisis reminds us of the importance of responsible risk management. The results of this study remind us that, in addition to energy price vulnerability and climate damage, the risks of excessive energy dependence include lower long-term economic growth. A lower carbon future for California is a more prosperous and sustainable future.”

The study used the Berkeley Energy And Resources (BEAR) model (described as “the most detailed and comprehensive forecasting tool of its kind”) to make its predictions for future impacts.

F. Noel Perry, founder, study-funder Next 10: "As the financial world's uncertainty continues to be the cause of anxiety and fear about the future, this report provides hard evidence that energy efficiency and innovation can pave the way to economic security and growth…Whether or not we take that path depends on policy to encourage it."

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New U.C. Report Finds Past and Future State Energy Policies Deliver Needed Economic Advantage; Provides Critical Evidence as CA Faces Global Financial Crisis
October 20, 2008 (PR Newswrie/COMTEX via MarketWatch)

WHO
Center for Energy, Resources and Economic Sustainability/Department of Agricultural and Resource Economics, University of California (David Roland-Holst, author); Next 10; California Air Resources Board (CARB)

WHAT
Energy Efficiency, Innovation and Job Creation in California finds (1) California energy efficiency policies added 1.5 million fulltime jobs in the past 3½ decades and (2) state climate policies increasing efficiency at 1%/year going forward will grow the Gross State Product (GSP) by ~$76 billion, upping household incomes and adding more new jobs.

The numbers tell the story. (click to enlarge)

WHEN
- 1972 thru 2006: The report examines historical data on job creation and revenues generated.
- Through 2020: The report examines the impacts of AB32, the California Global Warming Solutions Act which requires the states emissions to be brought to 1990 levels by 2020.

WHERE
The report studied the state of California.

WHY
- The study was funded by Next 10.
- California energy efficiency policies: added 1.5 million fulltime (FTE) jobs (total payroll: $45+ billion).
- State policies improving energy efficiency 1%/year: increase GSP ~$76 billion, increase real household income ~$48 billion, increase jobs ~403,000.
- The study examined household reductions in per capita electricity use as a catalyst for economic growth.
- Household consumption = 70% of GSP and, therefore, household expenditure is the leading determinant of energy use and employment in California.
- Historical findings:
(1) Aggressive policies in the 1970s to reduce energy waste and increase energy production protected California from the current economic crisis;
(2) 1.5 million FTE (with $45 billion payroll) because building energy and efficiency has a “multiplier” effect on employment saved consumers $56 billion in energy costs;
(3) W/every lost job due to slowed growth in energy supply chains (oil, gas, electric power, etc.) 50 new jobs were created across the state's diverse economy, and
(4) New jobs come from less energy intensive services, generating a more emissions-free economy.
- The study validated recommendations made by CARB toward implementation of AB 32 but found bigger economic benefits likely because CARB assumed static technology.

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- Prognostications, using BEAR:
(1) The state should achieve 100% of the goals set by AB 32 for greenhouse gas reductions and increase the GSP (~$76 billion), increase real household income (~$48 billion) and add jobs (~403,000);
(2) A compounding effect is expected: The first 1.4% efficiency increase = ~181,000 jobs, the next 1% gain = ~222,000 jobs, etc.;
(3) Increased jobs in efficiency sectors and a shift to an emissions-free economy will slow but not end job growth in Old Energy industries;
(4) Efficiency growth of 1% will drive a win-win situation for industry and consumers;
(5) Establishing a price for emissions with a cap-and-trade system will drive the favorable changes and growth;
(6) Energy is the world’s highest-revenue sector so efficiency changes will “…revolutionize traditional practices and increase real living standards around the world…” and
(7) The planned changes will drive California to world leadership in the sector as it transitions to an emissions-free economy.

QUOTES
- Roland-Holst, U.C.Professor and report author: "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)."
- Mike Splinter, president/CEO, Applied Materials: "The economy, energy and the environment are the great social and engineering challenges of our time…This report highlights the importance of smart policy to help accelerate adoption of future clean energy products and technologies and how they can truly make a difference to the future of our planet."