The Economic Impacts of California’s Major Climate Programs on the San Joaquin Valley
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A Report from Next 10
The San Joaquin Valley, comprised of the eight counties of Fresno, Madera, Merced, Kern, Kings, San Joaquin, Stanislaus, and Tulare, plays a critical role in shaping California’s climate policy and is worthy of study due to its function as a bellwether of the state’s transition to a low-carbon economy. Reducing emissions is vitally important for the region, as the Valley’s topography traps pollution, resulting in worse air quality and related health conditions than other regions of the state. The region also faces more socioeconomic challenges than California as a whole. Thus the Valley is vulnerable to both climate change and to climate policy. If policymakers can make climate policy work for the Valley, it will work for the state and demonstrate that these policies and programs can work for vulnerable communities around the country.
In the California Legislature, some San Joaquin Valley (“Valley”) representatives have raised concerns about the impact the state’s climate policy and programs could have on jobs. But claims and counter-claims about the economic impact of climate policies have been wielded in an informational vacuum. Until now, no comprehensive independent study has sought to calculate and analyze economic impacts of state climate policies within the San Joaquin Valley.
With this report, the UC Berkeley Donald Vial Center on the Green Economy (DVC), a program of the Labor Center, and the Center for Law, Energy and the Environment (CLEE) at UC Berkeley School of Law, with support from Next 10, offer a quantitative assessment of the economic impacts of three of California’s major climate programs and policies in the Valley: cap and trade, the renewables portfolio standard, and investor-owned utility (IOU) energy efficiency programs. We also offer policy recommendations based on the findings. As the costs and benefits for each program were calculated differently, results cannot be equally compared across all programs. However, analysis from this report suggests that total net economic benefits thus far for the three programs investigated is more than $13.4 billion. In short, the findings indicate that despite the heightened fears of job loss, California’s major climate policies have been a net economic boon to the San Joaquin Valley. Strengthening and refining those policies, not backtracking on them, is likely to continue that success and accentuate the positive effects in the region. After accounting for the costs and benefits, the net impacts are bulleted below:
Cap and Trade
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. These programs have created 1,612 total jobs in the Valley, including 709 direct jobs. When one includes expected benefits based on funds for projects approved but not yet spent (with funds to be disbursed on a yet-to-be-determined date), this figure balloons to nearly $1.5 billion when accounting for total impact on the economy. These projects will create 10,500 total jobs, including 3,000 direct jobs.
The state’s Renewables Portfolio Standard has had a substantial economic impact on the Valley and is a key source of job creation. Construction on RPS-related projects resulted in a total economic impact of $11.6 billion in the Valley. Between 2002-15, the RPS created 88,000 total jobs, including 31,000 direct jobs.
Energy efficiency projects in the Valley have had a net economic benefit of $1.18 billion. Energy efficiency is also a significant job creator, particularly in the construction sector, and was responsible for creating a total of 17,400 jobs in the Valley between 2006-2015, including 6,700 direct jobs. Benefits from efficiency programs include lower electricity costs, consumer savings from reduced energy use, jobs created to implement energy upgrades and jobs flowing from the boost in local economies that results from lower utility bills.