The study, conducted by David Roland-Holst, an economist at the
Center for Energy, Resources and Economic Sustainability at the
University of California, Berkeley, found that while the state’s
policies lowered employee compensation in the electric power industry
by an estimated $1.6 billion over that period, it improved compensation
in the state over all by $44.6 billion.
Built into that figure were increases of $1.2 billion in the light
industrial sector, $11.2 billion in wholesale and retail trade, $7.3
billion in the financial and insurance sectors and $17.8 billion in the
service sector.
“Consumers were able to reduce energy spending,” the study said, adding that “these savings were diverted to other demand.”
“When consumers shift one dollar of demand from electricity to
groceries,” the report said, they create jobs among retailers,
wholesalers, food processors and other businesses.
The study, which examined household spending, comes as state and
regional initiatives on climate-change policies have been gathering
momentum. At the same time, arguments have sharpened over how much it
will cost the economy to cut the emission of greenhouse gases like
carbon dioxide produced by burning fossil fuels, which are linked to climate change.
Roughly half the country’s electric power is generated by burning
coal, the fuel that produces among the highest greenhouse-gas emissions
of any in widespread use.
Some economists focus their studies on the cost of converting the
power grid to run on low-carbon technologies, like wind energy, or the
cost of developing technologies to separate the carbon dioxide from
coal-plant emissions and bury it underground. Others focus on the job
creating potential of new energy industries.
The Berkeley study is different in that it focuses as much on
historical data as on modeling the future. California’s
energy-efficiency policies were adopted in 1978, long before the
widespread push for greenhouse-gas reductions, but the data they
provide is highly relevant to the current economic debate.
Professor Roland-Holst said that he based his calculations on
residential spending on electricity over the last 30 years, factoring
in both the decrease in per-capita demand for electricity — now 40
percent below the national average — and the increase in California’s
electrical rates, which were about 40 percent above the national
average in June, the latest month for which data is available.
Household spending represents more than 70 percent of the gross state
product.
Historically, Professor Roland-Holst said, the decrease in
per-capita demand for electricity outstripped the increase in rates.
Much of the economic growth, the study said, was driven by both
efficiency standards for large appliances like refrigerators and for
residential and commercial buildings.
In an interview, Professor Roland-Holst said, “What I wanted to do
to support the forward-looking vision is go back and look at the
evidence we have in front of us.”
In two months, California is set to adopt broad policies to enforce
a new cap on greenhouse gas emissions signed into law two years ago.
More detailed regulations will then be developed; that process is
likely to be contentious, as it divides the overall costs of the new
program among competing sectors of the state’s economy.
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