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BERKELEY, California, US, August 30, 2006
(Refocus Weekly)
Using more renewables, increasing energy
efficiency and taking other measures to limit greenhouse gas
emissions could boost the California economy by US$60 billion and
create 17,000 jobs by 2020.
The benefits of proposed legislation could boost the annual GSP
(Gross State Product) by $74 billion and crease 89,000 new jobs if
climate policies are designed to create direct incentives for
California companies to invest in new technology, concludes the
University of California, Berkeley in ‘Economic Growth & GHG
Mitigation in California.’ The report was prepared for state
legislators as an assessment of Assembly Bill 32 (Global Warming
Solutions Act) sponsored by two Democratic members of the state
assembly.
“Our study demonstrates that meeting the 2020 limits under debate in
Sacramento can stimulate the state economy,” says UC Berkeley
professor David Roland-Holst. The new analysis supplements a January
study that concluded economic growth would increase in California if
GHG emissions were limited, but also identifies new benefits when
innovation goals are coordinated with climate policy action.
Both studies use the Berkeley Energy & Resources (BEAR) model, a
forecasting tool that traces the market interactions of a GHG
emissions cap across key elements of the California economy. The
model predicts economic benefits because innovation and efficiency
improvements (driven by climate policy) save money and allow
consumers to re-direct their spending from imported energy to
in-state goods and services, thereby providing new stimulus to the
California economy.
“The California economy has an enviable record of technological
progress, and the challenge presented by climate change is a new
opportunity for the state to demonstrate its talent for combining
advances in public policy and private sector
innovation to enhance environmental quality and economic growth,”
the report explains. The analysis examines eight targeted GHG
emission policies, combined with an overall cap to meet the state’s
targets for 2020.
“California’s GHG targets are attainable but too ambitious to be met
by voluntary initiative,” it concludes. “Policy action to meet the
targets should be relatively inclusive, with mandatory participation
by all sectors representing a significant share of emissions.”
“An emissions cap, supported by regulatory and market-based
implementation programs, can return California’s GHG emissions to
1990 levels by 2020 and stimulate the state economy,” it continues.
“Climate policies that create direct incentives for industries to
invest in new technologies can provide additional stimulus for new
employment and growth.”
“While our results are encouraging, they may be overly conservative
for several reasons,” since only a few GHG mitigation technologies
are represented explicitly and the results “consider only limited
potential for technical and fuel substitution (eg: the substitution
of renewable energy sources for fossil fuel power plants).” The
model does not allow for lower-cost reductions from offsets or links
to other carbon regimes to replace reductions from the sources
considered in the report.
“The universe of renewable energy generation technologies is large,
growing and increasingly offers cost effective alternatives,” it
explains. “Thus, the state has a larger set of mitigation options
than those modeled here. Forcing all the necessary GHG reductions
from a reduced set of options overstates the implied cost of meeting
the target.”
“Climate change will have serious impacts on the state of California
and is now widely recognized as an important global challenge,” it
adds. As the largest state economy in the world’s largest economy,
and as an economy built upon innovation, California is in a special
position to lead climate change policy by example and by insight.”
“Policies to achieve the 2020 emissions target will induce greater
investment in energy efficiency, which in turn reduces the level of
real resources needed to provide energy-related services needed by
the state economy,” it concludes. “This, in turn, frees up resources
for other uses. In effect, these policies redeploy resources toward
more productive patterns of investment and expenditure, benefiting
both the economy and the environment.”
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