Center for Climate Strategies: Macroeconomic analysis of Wisconsin climate & energy actions

For Further Information Contact:

Jeff Wennberg, CCS: (802) 793-5345, x105

Dr. Steven Miller, Michigan State Univ.: (517) 355-2153

Implementation of the recently introduced Clean Energy Jobs Act (CEJA) would expand the state’s economy and create thousands of additional new jobs for Wisconsin. These impacts are reported in a recent Center for Climate Strategies (CCS) analysis of the macroeconomic effects of the proposed law, conducted by Michigan State University and the University of Southern California in association with the State of Wisconsin. The analysis focuses on nine proposed policy actions that address clean and renewable energy, energy efficiency, industrial processes, transportation and agriculture.

Based on a state-of-the-art macroeconomic analysis, implementation of these CEJA actions would result in the following outcomes for Wisconsin:

* Create a net increase of more than 16,200 new jobs in the state by 2025;

* Boost the state’s economy (Gross State Product) by

— $254 million in the near term (2015),

— more than $700 million in 2020,

— $1.41 billion by 2025, and

— $4.9 billion total over the 2011-2025 period

The measures in the (CEJA) are a result of work done by a task force created through Executive Order 191, signed by Governor Doyle in April, 2007. The 29-member Governor’s Task Force on Global Warming included broad representation of Wisconsin’s interests – agriculture, business, industry, labor, energy companies, environmentalists and academics. The Task Force’s final report, Wisconsin’s Strategy for Reducing Global Warming, was completed and sent to the Governor in July, 2008, and sets forth more than 50 policy recommendations with the goal of reducing Wisconsin’s greenhouse gas (GHG) emissions 75% below 2005 levels by 2050 while growing the state’s economy and creating new jobs.

Dozens of the Global Warming Task Force’s recommendations are embodied in the CEJA. To assess the economic effects of the legislation, the Wisconsin Department of Natural Resources engaged the Center for Climate Strategies (CCS), a nonpartisan, non-profit organization that has assisted 24 U.S. States with climate action plan development and economic analysis.

The new CCS study, The Macroeconomic Impact of the Wisconsin Clean Energy Jobs Act on the State’s Economy, projects the expected macroeconomic impacts of major elements of the CJEA. CCS used the Regional Economic Models, Inc. (REMI) Policy Insight Plus Model to perform the analysis. Nine key initiatives in five sectors were modeled to estimate public and private implementation costs, job creation, and net contributions to Wisconsin’s overall economy. The modeled policies are:

Modeled Policies of

the Wisconsin Clean Energy Jobs Act

1. Conservation and Energy Efficiency Policies

Enhanced statewide energy efficiency

Residential and commercial building codes

State appliance efficiency standards

2. Utility Supply Side Policies

Enhanced renewable portfolio standard

Modify moratorium on construction of new nuclear plants

Advanced renewable tariff development

3. Overarching Policies

Industrial development revenue bond allocation

4. Transportation Policies

Freight idle reduction

5. Agriculture and Forestry Policies

Energy Crop Reserve Program

The CCS study found that the largest return on investments came from conservation and energy efficiency policies. This category was responsible for creating 88% of all the 2025 jobs and 74% of the total GSP growth between 2011 and 2025.

The study was conducted by Dr. Steven Miller, of the Center for Economic Analysis at Michigan State University, and Dr. Adam Rose and Dr. Dan Wei, of the School of Policy, Planning and Development at the University of Southern California, together with the CCS technical team and officials of the State of Wisconsin.

See the report