The bigger the carbon footprint, the bigger the economic opportunity in reducing it.
A new study claims that the comprehensive carbon reduction, efficiency and renewable energy measures of the energy and climate bill now before Congress could benefit heartland states like Ohio as much as, if not more than, green enclaves like California.
The report from U.C. Berkeley, Ceres, E2 and the state's Clean Economy Network says that Ohio could add about 61,000 jobs and increase its economic output by about 0.7 percent under a regime like that being proposed in the American Clean Energy and Security Act.
That assumes renewable energy will make up about 15 percent of the state's power by 2020, and that the state will improve overall energy efficiency by about 1.7 percent per year, said David Roland-Holst, an economics professor at U.C. Berkeley and co-author of the report. It also assumes some sort of carbon cap-and-trade scheme passes Congress, which remains an open question (see Green Light post).
But the important point, Roland-Holst claimed, is that the report shows that Ohio stands to reap greater than average benefits of a green economic shift, with an average household income increase of about $1,000, compared to a national per-household income increase in the range of $488 to $1,176 (see Will The Rust Belt Become the Green Belt?)
The study's results contradict many more gloomy projections from industry groups like the U.S. Chamber of Commerce and the American Petroleum Institute, which have said the energy legislation could lead to layoffs and reduced economic activity (see Green Light post).
A version of the bill introduced by Sens. John Kerry, D-Mass, and Barbara Boxer, D-Calif., faces an uphill battle in the Senate. The senate bill aims to cut the nation's greenhouse-gas emissions by 20 percent by 2020, compared to the House's aim of a 17-percent reduction.
A study by the U.S. Energy Information Administration indicated that cap-and-trade could yield a slight rise in electricity prices, as coal-fired power plants are retrofitted to prevent carbon dioxide emissions or shut down. Other groups have said it could cost the average American household a lot more (see Energy-Climate Bill Could Boost Electricity Costs 20% by 2030).
But the Ohio study contradicts that claim, indicating that a combination of cheaper renewable power, less demand through efficiency improvements, and financial incentives under cap-and-trade could actually reduce power bills over the long term, Roland-Holst said.
"This is not a case of environmental policies raising energy costs. It's a case of environmental policies reducing energy costs," he said.
It seems like a hard claim to make, given that Ohio gets 90 percent of its power from coal, noted Eric Zimmer, CEO of Ohio solar developer Tipping Point Renewable Energy.
But with a large carbon footprint to reduce comes a big target for new technologies and business models to reap outsized efficiency improvements in a state that hasn't yet seen a lot of money directed at the problem, he said.
"If you understand energy efficiency, you walk around here and see a lot of opportunities for energy efficiency, from or large industry on downwards," Zimmer said.
Still, that's not to say that short-term costs won't have to be handled, Roland-Holst said.
"Energy by revenue is the world's largest industry," Roland-Holst said. "Energy efficiency and renewable energy will be the next breakout sector, because they can revolutionize the energy industry, the largest in the world."
Besides throwing support behind backers of climate and energy legislation in Congress, the report highlights the fact that Ohio needs to move quickly to bring green industries online to counter its slide in traditional industries like automotive manufacturing (see Green Light post).
After all, Zimmer said, "Michigan has announced three new manufacturing plants for renewable technologies over the last three weeks. Ohio hasn't announced any yet" (see Green Light post and Oerlikon Solar Tools Coming to America).