Study: California energy efficiency pays off

updated 12:32 p.m. ET Oct. 20, 2008

SAN FRANCISCO - California has saved about $56 billion in electricity costs and created 1.5 million jobs over 35 years by using energy more efficiently than other states, according to a new study.

The report released Monday by an economist at the University of California at Berkeley found that state policies that boost energy efficiency aren't just good for the environment, they're also good for the economy.

"Energy efficiency is very good for real incomes, purchasing power and job creation," said the study's author, UC Berkeley economics professor David Roland-Holst. "Energy efficiency has really helped us stimulate the economy."

Roland-Holst analyzed the economic impacts of government policies enacted since the early 1970s that have made California the country's most energy-efficient state. California was among the first states to create energy-efficiency standards for new homes, buildings and household appliances such as refrigerators and washing machines.

The average Californian now uses about 40 percent less electricity than the average American. That means the $56 billion that Californians would have spent on electricity between 1972 and 2006 could be spent on goods and services that create more jobs than energy, most of which is imported from other states and countries, according to the study.

The report, entitled "Energy Efficiency, Innovation, and Job Creation in California," also analyzed the economic impacts of a recently proposed plan to reduce California's greenhouse gas emissions over the next 12 years to achieve aggressive targets set by the California Global Warming Solutions Act.

The UC Berkeley study estimated the state's plan to reduce the greenhouse gases, which include measures to cap emissions and increase energy efficiency standards, could create 400,000 new jobs and increase household incomes by up to $48 billion annually by 2020.

"If the country can follow California's example, it will have a dramatic effect on our future emissions and energy independence," Roland-Holst said.

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