Study: Clean energy will stimulate California economy

UNIVERSITY OF CALIFORNIA - A more aggressive use of clean energy would help California emerge from its multi-billion dollar budget deficit by creating jobs and lowering energy costs, according to a University of California study.

The study determined that moving half of California's electric power needs to renewable energy sources such as wind, solar or biomass would help create half-a-million jobs over the next 40 years.

David Roland-Holst, a UC Berkeley economics professor and the study's author, predicted aggressive state legislation meant to curb greenhouse gas emissions would create an enormous new clean energy market and spur innovation to better harness renewable resources.

"It's an irresistible opportunity for the next breakout in technology," said Roland-Holst. "California will deliver a market, mandating a standard which will compel energy users to adopt technology in same way fuel efficiency standards forced people to buy new cars."

Roland-Holst said his study is the first to use a wide-ranging economic forecasting tool developed at UC Berkeley to study the potential effects of clean energy on the entire California economy.

The study looked at several different scenarios of renewable energy use in California over the next four decades.

If the state were to continue with its current energy demand and reliance on fossil fuels, the study predicted, California would have to import more fuel, exposing the economy to less stable prices.

On the other hand, using clean sources for half the state's electric power while increasing efficiency by 1.5 percent each year would create 500,000 new jobs with a $100 billion payroll, the study found.

The speed with which California and the nation can meet these aggressive clean energy goals was part of a debate in San Francisco between Chevron Corp. CEO Dave O'Reilly and Carl Pope, executive director of The Sierra Club.

Both men agreed that renewable energy will play a major role in the country's future, but had very different timetables for reaching clean energy goals. The debate was organized by The Commonwealth Club.

O'Reilly said he does not believe clean energy sources will allow the U.S. to reduce its carbon emissions by more than 20-25 percent by 2050. Pope said he believes emerging and still undiscovered renewable energy technologies will allow for an 80-90 percent reduction in greenhouse gas emissions by the same year.

"I disagree that renewables can replace a fossil fuels-based economy," O'Reilly said. O'Reilly said he believed that reduction needs to occur, but believes a lower amount of energy will come from renewables, and that more will be derived from natural gas, or nuclear power.

Meanwhile, a separate study released by the Pew Charitable Trusts showed that the nation, led by California, was already seeing the economic benefits of an emerging clean energy industry.

The Pew study found that the U.S. clean energy industry created jobs at a rate faster than overall job growth between 1998 and 2007. In California, clean energy created jobs at a rate of 7.7 percent during that time compared to 6.7 percent for jobs overall.

Roland-Holst said California's passage of AB32, also known as the Global Warming Solutions Act, has created the environment for a booming clean energy industry. The law seeks to reduce greenhouse gas emissions in the state 30 percent by 2020.

President Barack Obama has said he wants the U.S. to derive 25 percent of its power from renewable sources by 2025. Congress is currently mulling legislation that would put a national clean energy requirement in place for all electrical utilities.