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Clean energy programs have helped the Inland Empire's economy, study says

A truck drives into the Valero Benicia Refinery, Wednesday, July 12, 2017, in Benicia, Calif. California Gov. Jerry Brown is racing to convince lawmakers to extend the state's cap-and-trade program which puts a price on carbon emitted by polluters, including oil refineries. The program has been closely watched around the world as a market-based way to reduce greenhouse gas emissions, but it expires in 2020. (AP Photo/Rich Pedroncelli)
Rich Pedroncelli/AP
A truck drives into the Valero Benicia Refinery in Benicia. The state's cap-and-trade program puts a price on carbon emitted by polluters, including oil refineries.

California's clean energy programs, including cap-and-trade, have helped the Inland Empire's economy more than they've hurt — that's the conclusion of a new study from UC Berkeley and the public policy organization Next 10.

The state's cap-and-trade program aims to reduce carbon emissions over time by giving polluters, primarily oil refineries and power utilities, an incentive to reduce their emissions. Those companies buy and trade allowances to emit carbon. Money from the program goes into a special fund that pays for transportation, environmental and housing projects.

The Berkeley researchers weighed the costs and benefits of that program and three others: the renewables portfolio standard, distributed solar programs, and energy efficiency programs funded by the ratepayers of investor-owned utilities.

The study found that from 2010 to 2016, those clean energy programs brought San Bernardino and Riverside counties net gains of $9.1 billion and 41,000 jobs.

That's largely due to an influx of new clean energy plants in the area, according to the researchers. Over the past seven years, 108 power plants were built in San Bernardino and Riverside counties. Nearly all of them - 106 - produce renewable forms of energy like solar and wind, a perfect match in an area where land, sun and wind are plentiful.

"Because the Inland Empire is such a good region for building renewables, it’s getting a lot of the state’s investment for those, and that money is helping the regional economy," said Betony Jones, a study co-author and climate specialist at the UC Berkeley Labor Center's Green Economy Program.

The report found that the local construction industry benefited most from the state's clean energy programs, mostly because of the robust investment in clean power plants. From 2010 to 2016, Inland Empire construction companies experienced increases of more than $9.6 billion in additional business and over 36,000 jobs.

Not surprisingly, fossil fuel power plants and extractors were hurt most by those same state programs, the researchers found. Fossil fuel-based electric power generators experienced over $1.7 billion in reduced sales and the loss of over 1,100 jobs. Businesses involved in fossil fuel extraction in the region lost almost $15 million in sales and over 40 jobs. 

The study noted that consumers have had to foot the bill for California's clean energy programs. For example, companies forced to buy cap-and-trade allowances pass along those costs to customers through higher prices. The researchers didn't deeply analyze the economic impact of those costs in a region that is still finding its bearings in the wake of the Great Recession.

For that reason, John Husing, a longtime Inland Empire economist, was critical of the report. He said Californians already pay some of the highest energy prices in the country, which is due in large part to state regulations and environmental programs that consumers pay for. While a rising electric bill is manageable for the state's upper middle class and wealthy, he said, most residents and small business owners in the Inland Empire can't afford it.

"Companies refuse to come to California," said Husing. "Why would they when the cost of energy in California is roughly two-thirds higher than the second most expensive western state?"

He acknowledged that some California consumers reap financial benefits from these same clean energy programs, either by adding solar power to their homes or using electric car tax credits. But he said those benefits are out of reach for most Inland Empire residents.

"Who benefits is who can afford to take advantage of it," he said. "If I can’t afford to put on a solar roof, if I can’t afford an electric car, then I'm being disadvantaged economically in favor of people who are higher income who can afford those things."