The Environmental Protection Agency (EPA) recently held a webinar discussing the benefits that arise out of the clean energy economy and the ways in which these “metrics of success” might be estimated. Denise Mulholland, Senior Program Manager at the EPA D.C. headquarters, stressed two particular economic benefits of clean energy initiatives: 1) long-term savings from increased energy efficiency and 2) job creation in sectors directly tied to implementation of initiatives. The resultant cost savings and job market growth signify increased cash flow into the economy.
The panelists examined three separate methods for estimating these economic benefits. Marc Breslow, Massachusetts Director of Transportation and Buildings Policy, described an input-output model that inputs an industry’s production and then measures the effect that production has on other industries, consumers, the government and foreign suppliers. Using this method, he examined the effect on the Massachusetts economy of its energy efficiency initiatives for buildings and transportation. Breslow found that by 2020, Massachusetts would save over $6 billion in energy costs and create 36,000 new green jobs through its energy efficiency initiatives.
Karl Michael, Project Manager at the New York State Energy Research and Development Authority, discussed the Econometric Approach as another method for estimating economic benefits tied to clean energy initiatives. The Econometric Approach is an input-output model that takes into account responses to economic factors over time, similar to the input-output model Breslow described, but also taking price inflation, deflation, and other cost dynamics into account. Michael used the econometric method to estimate the net cumulative job years New York energy initiatives would produce, estimating about 69,100 new job years by 2024. A job year is defined as one job sustained for one year. Multiple job years can either be calculated as multiple jobs per year or one job sustained through multiple years.
Suzanne Tegen, Market and Policy Impact Analysis Group in the Strategic Energy Analysis Center of the National Renewable Energy Laboratory (NREL), discussed the use of the Jobs and Economic Development Impact (JEDI) model to project potential jobs and cost benefits from a Wyoming wind project. Applying the JEDI model, Tegen found that the project would produce over 1,700 new long-term jobs and save over $1.2 billion in energy costs by 2022.
In the EPA’s full report, Assessing the Multiple Benefits of Clean Energy, it is stressed that:
States have historically evaluated clean energy policies based predominantly on their costs and impacts on energy demand. However, by considering and estimating the multiple energy system, environmental, and economic benefits of clean energy as they design and select clean energy policies and programs, states can more fully understand the range of costs and benefits of these potential actions.