Despite concerns regarding the economic and employment impacts of the state’s climate policies, a new study says that the San Joaquin Valley is in fact benefiting economically from California’s ambitious policies on global warming.
The first comprehensive, academic study on the climate policies was commissioned by Next 10 — a think tank based in San Francisco that aims to educate Californians on important issues, breaking them down in order to make them easier to understand.
“What we do is go out and find experts around the state that can help educate on these issues,” said Noel Perry, founder of the nonpartisan, nonprofit group. “We’ve done commissioning research on climate change for many years, and we thought this would be a good way to look at what the economic effects of the state’s policies have been in the San Joaquin Valley.”
Perry explained that Next 10, along with researchers from the University of California, Berkeley, chose to study the Valley because of its unique circumstances, which include air quality problems and socioeconomic challenges that are not found elsewhere in the state.
“We really have seen the San Joaquin Valley as a bellweather for climate policy,” he said. “It’s an especially vulnerable area in terms of air quality, faces higher rates of poverty and has a higher climate than other parts of the state.”
The study found a total economic benefit of $13.4 billion from data regarding three state programs and policies: Cap-and-Trade, Renewable Portfolio Standard and energy efficiency. In the report, compliance and investment costs are addressed as well as the benefits across the region, and it also details a net boost to the Valley’s economy from the programs, including the creation of tens of thousands of jobs.
“I think this study shows that climate policies can be a promising way to bring jobs back to the country,” said researcher Ethan Elkind of the UC Berkeley School of Law.
As part of the Global Warming Solutions Act of 2006, the Cap-and-Trade Program aims to reduce greenhouse gas emissions by establishing an aggregate allowance budget for covered entities and providing a trading mechanism for compliance instruments. According to the study, net economic impacts from the Cap-and-Trade Program through December 2016 include $200 million in total economic impact, including $4.7 million in state and local tax revenue. Furthermore, the program has created 1,612 total jobs in the Valley and based on funds for projects approved but not yet spent, an additional 10,500 jobs will be created in the future.
“The net benefits of the Cap-and-Trade program are hugely significant,” said researcher Betony Jones of the Donald Vial Center on Employment in the Green Economy at UC Berkeley. “The program has been a net positive, and that’s slightly surprising given that the benefits have just started to be implemented.”
Funds from the Cap-and-Trade program are implemented through projects such as the High-Speed Rail, affordable housing developments in cities like Fresno and the addition of bus routes and stops in countless locations throughout the Valley, said Jones. In spite of compliance costs that industries must bear under the Cap-and-Trade policy, the study found that industries benefiting from the policy, such as construction, generate more economic activity in the region.
The state’s Renewable Portfolio Standard has had the biggest economic impact so far, with construction on renewable energy projects resulting in $11.6 billion in total economic activity in the Valley. Twenty-four percent of the state’s solar generation and 54 percent of the state’s wind generation reside in the San Joaquin Valley, providing significant job opportunities in the region.
“Because the Valley is so well positioned in terms of wind and solar potential, it’s where developers want to build renewable energy outlets,” said Jones.
From 2002 to 2015, renewable programs created about 31,000 direct jobs for people building and operating the facilities in the Valley, and created another 57,000 indirect and induced jobs for suppliers and supporting businesses.
“These are good-paying, family-supporting jobs with health insurance, training and pension contributions,” said Jones. “It has made a huge boost in the Valley and put it on the map.”
The report also found that energy efficient programs overseen by the California Public Utilities Commission help families, businesses and institutions save money annually. Energy efficiency programs in the San Joaquin Valley are the most cost-effective in the state, and the report’s researchers found that these programs in the Valley have provided net economic benefits of $248 million since 2010.
“The San Joaquin Valley is a good investment for the state’s energy efficiency dollars because the climate is hotter,” said Jones. “You get more bang for your buck.”
From 2006 to 2015, utility energy efficiency programs created 10,700 jobs in total.
The report substantiates the idea that climate policies are in fact beneficial to the area rather than detrimental, said Elkind.
“Elected leaders in the Valley have raised questions about the impact of climate policies, and a lot of them are being raised without any real data to respond with – now we have that data,” he said. “Given the economic benefits to date, I think if regional and state leaders want to see these kinds of benefits continue, then it makes sense to continue extending them.”
The Cap-and-Trade Program is currently in place through 2020, and the California Air Resources Board has proposed to extend the program beyond that date. The Renewable Portfolio Standard requires all retail electricity sellers to procure 33 percent of their electricity from eligible renewable energy resources by 2020, and 50 percent by 2030. The state’s energy efficiency programs are expected to remain constant through 2030, and SB 350 requires the rate of energy efficiency savings to double by 2030.
The study was conducted before the recent Presidential Election, Elkind pointed out, and federal support can have a huge impact on whether or not these job-producing programs receive the funding they deserve.
“The focus of the presidential campaign was to bring good jobs back to economically-challenged parts of the country,” said Elkind. “The federal government can either be a partner in helping the state achieve its aggressive environmental goals, or it can choose not to. California is committed to this path, but if the federal government tries to undermine that, state leaders will have to push back.”