Study: State Climate Policies Boost Inland Empire’s Economy

Southern California’s Inland Empire — San Bernardino and Riverside counties — netted more than $9 billion in direct economic activity and gained 41,000 jobs over five years from the state’s climate programs, a new study has found.

The study flies in the face of arguments that regulations kill jobs — arguments some politicians reel off without taking a breath. Researchers looked at the economic effects of California’s renewables portfolio standard and cap-and-trade policies, along with the California solar initiative, federal solar investment tax credit and investor-owned utilities energy efficiency programs between 2010 and 2016.

The state’s renewables portfolio standard mandates that 50 percent of California’s electricity come from renewable sources by 2030. The proliferation of renewable energy plants is responsible for over 90 percent of the direct economic benefit to the region from the state’s major climate programs and more than $12 billion in net benefits, the study found.

Commissioned by Next 10, a San Francisco-based non-partisan, non-profit group, the study was conducted by the University of California, Berkeley Labor Center and the university’s Center for Law, Energy and the Environment.

Researchers found that one-time investments in building renewable energy power plants boosted construction that benefited the region indirectly as well. The ripple effects of these investments, including retail and real estate, generated $14.2 billion in economic activity and 73,000 jobs, the study said.

Earlier this year, another Next 10 study showed similar economic benefits to the San Joaquin Valley from the state’s climate policies. That study found that climate policies led to the creation of tens of thousands of jobs and a net economic benefit of $13.4 billion.

“Both reports show that in the most economically and environmentally challenged regions, regulations can create jobs,” Next 10 founder F. Noel Perry said. “And most of these jobs require on-site construction and can’t be mechanized.”

But one economist cast a wary eye on the Inland Empire study. John Husing, chief economist of the Inland Empire Economic Partnership, said he was unimpressed with the increase in clean energy jobs shown in the study.

“Many of the jobs are one-shots, and not permanent,” Husing said. “And many of the jobs, like installing solar panels, are lower paying.”

Husing said many of the green economy jobs created are “cannibalizing” jobs in distribution that the Inland Empire depends on. And he sees a looming threat from indirect source rules requiring regulators and developers to project how much pollution a development will generate through energy use and traffic.

“If you put restrictions on trucking companies, like the governor wants to do with the indirect source rule, many of the warehouses here could up and move to Arizona or Nevada,” Husing said.

While many construction jobs are not permanent, those jobs and their ripple activity “helped the Inland Empire recover from the Great Recession faster,” said Ethan Elkind, director of the Climate Program for the Center for Law, Energy & the Environment at the UC Berkeley Law School. “Construction employment is where California’s climate policies have been an economic game changer,” Elkind said.

The Inland Empire study’s lead author, Betony Jones, noted that 80 percent of jobs created were from the renewables portfolio standard, and most were “union jobs with paid training – the crème de la crème of construction jobs.”

The study, however, did acknowledge a need to develop a transportation program “to maximize benefits and minimize harm” for industry and residents. “Warehousing, logistics and long commutes make transportation the most uncertain aspect of California’s climate program,” researchers said.

The report’s authors also recommended that policymakers expand energy efficiency programs to reduce energy use in existing buildings and homes while reducing energy costs and creating jobs and economic activity. Policymakers should also ensure that the Inland Empire receives appropriate statewide spending based on its economic and environmental needs, the study said. And transition programs should be developed for workers and communities affected by the decline of the Inland Empire’s greenhouse gas-emitting industries, researchers recommended.

The Southern California Association of Governments is pleased that two of its member counties have benefited from the state’s climate policies. But Hasan Ikhrata, the association’s executive director, is not happy with how money from the state’s Greenhouse Gas Reduction Fund is distributed. He wants more “geographic equity” in the distribution of that money collected from the sale of pollution permits under the cap-and-trade policy.

Along with San Bernardino and Riverside counties, the association of governments also includes Imperial, Los Angeles, Orange and Ventura counties. Forty-nine percent of the state’s population lives in the association’s region, Ikhrata said, “but overall we’ve received only 29 percent of the benefits from the Greenhouse Gas Reduction Fund.”

Southern California should have more representation on the Strategic Growth Council, the lead agency distributing cap-and-trade revenues, Ikhrata said. “We are not against the state setting up formal climate policies,” he said, “but we are against having a small group of people deciding who benefits from them.”