Energy efficiency boosts California's economy

Report links efficiency efforts to a strong economy.

California’s energy efficiency policies created 1.5 million jobs in the past 35 years and have lessened the state’s vulnerability to the current economic crisis, according to a University of California study released October 20.

The study offers "hard evidence" linking energy efficiency and economic growth, says F. Noel Perry, founder of Next 10, the nonpartisan group focused on California’s environmental and economic issues that funded the study.

Authored by UC Berkeley economics professor David Roland-Holst, the study looks at household per capita energy use as a measure of the state’s energy policies. Between 1972 and 2006, Californians saved more than $56 billion in energy costs. Those savings plus a reduced dependence on imported energy redirected money to goods and services, sparking a "multiplier effect" of increased job creation, according to the study.

Some energy sectors saw slow job growth or job losses, but those were offset by overall gains, the study reports.

Perry stressed the importance of policies in driving efficiency. The study credits utility efficiency programs and building and appliance standards as tools that have made California’s per capita energy use 40 percent less than the national average.

The study comes as California is poised to adopt policies to meet emissions goals set by California Global Warming Solutions Act (AB32), which aims to reduce carbon emissions to 1990 levels by 2020.

Examining the draft policies facing approval by the end of 2008─including strengthening existing efficiency programs, sourcing one-third of the state’s power from renewables and establishing a cap and trade program─the study predicts a net economic benefit from AB32 implementation. Such policies would create more than 400,000 "climate action-driven" jobs, boosting the Gross State Product (GSP) by more than $75 million, it says.

Added efficiency gains would reportedly have compounded benefits, with an additional one percent annual efficiency gain producing more than 220,000 additional jobs.