Originally posted at the Wonk Room.


As Bush’s pollution-based policies continue to drive our economy and planet to the brink of disaster, conservatives are crying that changing course with progressive energy policies would “ravage the countryside” with “huge economic costs.” But a major new study of the success of California’s green economy tells the true story: a green recovery will restore the middle class, lift people out of poverty, and protect the planet. The study by economist David Roland-Holst finds that “California’s energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000.” Today, California’s per-capita electricity demand is 40 percent below the national average:

Total electricity use, per capita, 1960-2001

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Instead of household income being lost to the capital intensive energy sector, Californians have enjoyed the benefits of their wages being plowed into job creating sectors, such that “induced job growth has contributed approximately $45 billion to the California economy [PDF] since 1972.”

Energy Efficiency, Innovation, and Job Creation in California” [PDF] by David Roland-Holst, an economist at the Center for Energy, Resources and Economic Sustainability at the University of California, Berkeley, is the first study of how the savings from California’s energy efficiency standards affected its economy through “expenditure shifting” away from the energy sector. The author explains:

When consumers shift one dollar of demand from electricity to groceries, for example, one dollar is removed from a relatively simple, capital intensive supply chain dominated by electric power generation and carbon fuel delivery. When the dollar goes to groceries, it animates much more job intensive expenditure chains including retailers, wholesalers, food processors, transport, and farming. Moreover, a larger proportion of these supply chains (and particularly services that are the dominant part of expenditure) resides within the state, capturing more job creation from Californians for California. Moreover, the state reduced its energy import dependence, while directing a greater percent of its consumption to in-state economic activities.

California’s appliance, building, automotive, and utility efficiency standards are a model for the nation — saving money, creating jobs, and saving lives through significant reductions in pollution.

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