Efficiency Fuels Economic Growth

Through an aggressive state program to cut energy use, Californians reduced their per capita electricity consumption by 40% compared with the national average over 35 years and saved $56 billion in household income, a recent study says. Most important, they redirected $46 billion of that savings to buying goods and services, creating 1.5 million new jobs and boosting the state’s economy, according to the study by David Roland-Holst, an economist at the University of California, Berkeley, Center for Energy, Resources & Economic Sustainability. Although household energy efficiency resulted in a revenue reduction of $1.6 billion and the loss of 23,500 jobs for the energy sector, the report estimates that efficiency increased income and jobs for a host of other sectors, including wholesale and retail trade ($11.2 billion, 457,000 jobs), light industry ($1.1 billion, 41,000 jobs), and chemicals ($258 million, 6,526 jobs). Looking forward, the report projects that implementation of a new state program to cut CO₂ emissions to 1990 levels by 2020 may actually spur economic growth through new efficiency measures, leading to 400,000 new jobs and an increase for California’s economy of $76 billion by 2020. The report is available at are.berkeley.edu/~dwrh/CERES_Web.