Economic growth, new jobs would result from regional climate plan

An independent economic analysis indicates that Washington's economy would grow by $3.3 billion and add 19,300 jobs if a regional plan to mitigate climate change and build a clean-energy economy goes into effect as designed starting in 2012.

The Washington Department of Ecology (Ecology) and the non-governmental Energy Foundation jointly commissioned the study to better understand the potential economic implications of a regional plan designed by the Western Climate Initiative (WCI).

The WCI is a coalition of seven U.S. states and four Canadian provinces working together to mitigate climate change, spur investment in clean-energy technologies that create green jobs and reduce dependence on foreign oil. Its regional plan would reduce climate-changing greenhouse gas emissions to 15 percent below 2005 levels by 2020.

The Washington state economic report — conducted by the economic consulting group, ECONorthwest — is based on an updated economic modeling analysis released today by the WCI. See details of the WCI analysis.

“Both of these reports offer fresh and compelling evidence that reducing greenhouse gas emissions and building a clean-energy economy go hand-in-hand,” said Gov. Chris Gregoire. “They show that acknowledging the realities of a carbon-constrained world and seizing opportunities in the rapidly growing green economy will help mitigate climate change and create thousands of new jobs.”

“Here in Washington, we are already reaping the rewards of the early actions we have taken,” Gregoire added. “In March, state economists reported that Washington is home to over 99,000 green jobs. This is evidence that businesses here are already forward-thinking, and that Washington can help lead the nation in sustainable methods and technology.”

(Note: A link to related Employment Security Department news release is provided at end of this section.)

Other jurisdictions are also realizing the positive economic benefits of climate mitigation and clean-energy efforts.

• In the U.S., the seven WCI Partner states comprise 20 percent of the U.S. economy, yet they garnered 60 percent of venture capital investments directed toward clean-technology businesses between 2006 and 2008.
• Jobs tied directly or indirectly to British Columbia’s green economy are forecast to increase from nearly 166,000 jobs in 2008 to more than 225,000 jobs in 2020. (See British Columbia's Green Economy)
• The Regional Greenhouse Gas Initiative (RGGI) – a cooperative venture of 10 Northeast and Mid-Atlantic states – realized nearly $88 million through a market-based carbon reduction program for investment in clean energy resources in its first quarterly auction of carbon dioxide allowances.
  
  

“State by state, region by region, all the economic analyses point in the same direction: government policies that foster greenhouse gas reductions have multiple benefits,” said Janice Adair, climate policy advisor to state Ecology Director Ted Sturdevant. “They help create jobs, improve efficiencies so we spend less on energy, and reduce the impacts of climate change. Our new economic assessment of the Western regional carbon market on Washington’s economy affirms this trend.”

If fully implemented in 2015, the plan developed by WCI would cover nearly 90 percent of the region’s greenhouse gases. The new Washington state economic report identifies three primary areas of economic growth associated with the regional strategy:

• Benefits of investing in energy efficiency: Businesses that invest in energy efficient equipment will see an increase in their economic output over time. Similarly, households that purchase energy efficient equipment will realize lower energy bills and consequently have more money to spend on other goods and services.
  
  
• Benefits of selling energy-efficient equipment: Suppliers of energy efficient equipment (contractors, construction, retail trade sectors) will benefit from increased spending on energy-efficient equipment.
  
  
• Up-front investments will pay off in future savings: Investments by households and businesses in energy-efficiency equipment will be more than offset by energy cost savings in future years.
  
  

The Washington economic analysis indicates that consumer and business spending on energy efficiency will create new jobs in 30 of 38 business sectors. Examples include: agriculture, forestry, fishing and hunting; construction; food manufacturing; wood product manufacturing; paper manufacturing; printing; machinery manufacturing; electrical equipment, appliance and component manufacturing; furniture manufacturing; wholesale trade; transportation and warehousing; and retail trade.

Business sectors where consumers and businesses are likely to have less money to spend include metal manufacturing, information, finance and insurance, real estate rental and leasing; professional and technical services; and administrative services.

Ecology’s Adair said, “The smart, innovative businesses in these sectors can seize the opportunity to market their services to businesses in energy-efficiency growth sectors, and our state agencies and policy makers can help them."

The economic analysis is not intended to predict the future, but rather to help policy makers, businesses and individuals make informed choices regarding the clean-energy economy.

• See the economic study: http://www.ecy.wa.gov/climatechange/econanalysis.htm
• See more about the Western Climate Initiative: http://westernclimateinitiative.org/
• See more about climate action in Washington state: http://www.ecy.wa.gov/climatechange/index.htm
• Employment Security Department news release (March 18, 2010) - Gov. Gregoire announces Washington state economy is getting “greener” http://www.esd.wa.gov/newsandinformation/releases/wa-state-economy-is-getting-greener.php

.