Study: California's Energy Policies Have Created Economic Growth

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Study: Holst Talks About California's Energy Policies

David Roland-Holst talks about how the financial downturn is affecting California's economy and his hopes for AB32, the state's Global Warming Solutions Act.

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California's aggressive energy efficiency policies have saved consumers billions of dollars and created millions of new jobs, according to a study released Monday by a UC Berkeley researcher.

The study analyzed 35 years of legislative and economic data from 1972 to 2006 in order to assess the impact of the state's energy policies on the economy and predict what may happen in the future.

The report states that since 1972, consumers have saved $56 billion in energy costs and 1.5 million full-time equivalent jobs have been created, with a total payroll of $45 billion. These improvements are a direct result of the state's energy policies, said David Roland-Holst, the study's author and a UC Berkeley adjunct professor of agricultural and resource economics.

"This idea that there's a trade-off between the environment and economic growth is a fallacy," Roland-Holst said. "In California, we can prove that."

Roland-Holst explained that since Californians saved money by being more energy-efficient, they shifted their spending from electricity and fuel to goods and services they could then afford.

"Frankly, we spend about two-thirds of our income on services and retailing and those are much more employment-intensive than the carbon fuel supply chain," he said. "If you can save households money on energy, that's a powerful economic stimulant, and so it creates jobs all across the economy."

The study, which used data from the U.S. Bureau of Economic Analysis and the California Regional Economies Employment Series, found that California has maintained its per capita energy consumption over the last 35 years. Meanwhile, the rest of the country has increased its energy consumption by 60 percent.

These numbers show that California is moving in the direction of a carbon-free future, which will promote the growth of clean and green technology, Roland-Holst said.

In Berkeley, demand for green technology has already grown. Sun Light and Power, a local business specializing in the design and building of alternative energy systems, has seen a rise in business over the last several years.

"I can say for certain that our business has increased by about 25 percent per year for the last five years," said company president Gary Gerber. "(The business increase) is pretty much a direct outgrowth of the increase in demand for solar products."

According to Michael Caplan, economic development manager for the city, green sectors are just emerging in Berkeley and are not yet a major factor in local employment.

"The green sector is a growing field, as I think this report is reflecting," Gerber said. "But a lot of green infrastructure jobs are by definition local; Berkeley will benefit and has been benefiting."

Gerber's view of green technology as an emerging field mirrors Roland-Holst's analysis of the future of California, which Roland-Holst says could continue with the creation of new jobs and expansion of the economy.

"There will be explosive growth and advancements in energy efficiency," he said. "Energy efficiency needs to join the knowledge-intensive industry of the state to establish global standards and capture this new market."

According to Roland-Holst, energy efficiency could revolutionize how power companies convert and distribute energy around the world.

"The need for energy efficiency isn't just coming from energy markets and higher prices; it's coming from a global climate agenda that's just beginning to emerge," he said. "There will be an avalanche of demand for technologies to reduce energy dependence not just in the United States, but all over the world."


Mai Fung covers environmental issues. Contact her at [email protected]

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