Reaping the Wind: The Economic Impacts of Spending on Renewable Energy and Energy Efficiency Programs

Alec Josephson and Stephen Grover, ECONorthwest
Ben Bronfman and Fred Gordon, Energy Trust of Oregon

Keywords

Abstract

As part of Oregon’s electricity market deregulation, a public benefits fund was established to fund energy efficiency and renewable energy programs within the state through the Energy Trust of Oregon (Energy Trust). To help demonstrate the benefits of these programs, an input-output model was used to estimate their economic impacts in terms of jobs and economic output. All economic impacts of Energy Trust spending are reported as net impacts relative to what would have occurred had the money been returned and spent by Oregon residents. With over $60 million spent on these programs in 2002 and 2003, approximately 530 jobs were created in Oregon and economic output increased by $60 million. In addition, energy efficiency gains for Oregon industries are estimated to create 616 jobs and increase output by $62 million annually if 2003 spending levels are maintained.

This analysis emphasizes benefits that are not often considered with conservation and renewable energy programs. While employment and economic output benefits should not be the primary justification for these programs, these are the benefits that tend to resonate most clearly with lawmakers. This is particularly true for states like Oregon that face budget deficits and high unemployment. In several states lawmakers have looked to public benefit funds to finance other programs and have siphoned off money that was originally mandated for energy efficiency and renewable energy. This paper will be of interest to anyone interested in defending public benefit funds against these types of raids.