The study Clean Energy & Climate Policy for U.S. Growth and Job Creation: An Economic Assessment of the American Clean Energy & Security Act and the Clean Energy Jobs & American Power Act estimates that as many as 1.9 million new jobs could be created across the United States within renewable energy, annual household income could increase by US$1,175 per year, and Gross Domestic Product could increase US$111 billion by 2020.
The study was commissioned by Ceres, Environmental Entrepreneurs and the Clean Economy Network, and modelled by collaborative research teams at the University of Illinois, Yale University and the University of California. All states would have economic gains above the growth that they would see in the absence of such legislation, but clean renewable energy policies could create 78,000 jobs in Pennsylvania, 61,000 in Ohio and 45,000 jobs in Indiana.
The economic assessment was conducted using EAGLE, a forecasting model that projects the long term economic impacts of climate legislation on the economy. The model details economic interactions within and between each of the 50 states, and compares the impacts of combining a limit on carbon pollution with complementary efficiency and renewable energy policies.
“All 50 states can gain economically from strong federal energy and climate policy, despite the diversity of their economies and energy mixes,” concludes the main finding. “The states may differ on the supply side, but on the demand side they all have substantial opportunities to grow their economies by promoting energy saving and domestic renewable energy alternatives.”
“By aggressively promoting efficiency on the demand side of energy markets, alternative fuel and renewable technology development on the supply side can be combined with carbon pollution reduction to yield economic growth and net job creation,” it adds. “Indeed, a central finding of this research is that the stronger the federal climate policy, the greater the economic reward.”
“For most states, growth rates increase with adoption of renewable energy sources,” it explains. “This results from two factors, reduction in long term fossil fuel dependence and exploitation of more efficient alternative energy sources.”
Fossil fuels are currently in lower demand due to economic markets, but that situation is temporary and recent projections foresee a strong and sustained resurgence of fuel prices. “By shifting to domestic renewable substitutes, the western states can reduce their long term external energy dependence and capture more in-state expenditure multiplier effects.”
“In terms of relative efficiency, recent research on new renewable supplies suggests that a 30% RPS (renewable portfolio standard) can be met from sources with marginal cost below projected fossil fuel alternatives,” the report notes. “These savings from low hanging fruit in solar, wind, and geothermal sources will also contribute to higher long term regional growth.”
The model assumes that electric utilities will be required to meet 20% of their sales through renewable energy by 2020, as well as a cap and trade system for carbon emissions, aggressive energy efficiency standards for new buildings and vehicles, and a “substantial program (in the hundreds of billions of dollars)” to support RD&D in clean energy and energy efficient technologies, funded in part through CO2 allowances.
Ceres is a national investor coalition working with investors and companies to address the business risks and opportunities posed by global climate change. The Clean Economy Network is a national advocacy association for the cleantech and green business community. Environmental Entrepreneurs is a national community of individual business leaders who advocate for good environmental policy while building economic prosperity.