ENVIRONMENTAL DEFENSE FUND
Introduction and Overview
California’s clean and efficient economy encompasses more of the state’s total economy every day. There are important “growth” sectors that are helping facilitate this transition—a diverse base of companies that provide the products and services that enable business, government, education, residential, and other “users” to cut costs through energy savings, receive more economic value per unit of energy consumed, and reduce greenhouse gas emissions at the same time.
With the help of these growth sectors, California’s long-standing economic drivers—from agriculture to manufacturing to health services—are transforming their own products and processes to cut costs, spur innovation, and maintain their competitiveness in a global economy. These growth sectors have a productive business relationship with the state’s economic drivers, moving everyone towards a cleaner and more efficient economy, with benefits accruing to enablers and users alike.
This report takes a closer look at seven growth sectors of California’s clean and efficient economy. These seven growth sectors are a subset of fifteen sectors of the Green Economy identified in Next 10’s Many Shades of Green (see www.Next10.org), the sectors that specifically focus on greenhouse gas reductions. The table on the following page includes examples of the kinds of products and services provided by companies in these seven sectors.
Collectively, these seven sectors provide a critical infrastructure that supports business, government, and others in transforming their use of energy and reducing their emissions. They include companies involved in energy generation, storage, and infrastructure; those involved in alternative fuels and vehicles, as well as products, services, and advanced materials that help improve energy efficiency. Additionally, they include specialized finance and investment service firms that underwrite innovation and operations of companies in these growth sectors.
Just as information technology sectors are transforming the products and processes of the rest of the economy, so too are these energy-related growth sectors. These growth sectors are helping other industries become increasingly a part of California’s clean and efficient economy.
It is important to track these growth sectors, not just for the jobs and economic vitality they directly generate, but because they have a positive ripple effect throughout the California economy. While the full range of those benefits is difficult to measure, one important indicator is the performance of companies in these growth sectors. If these companies are experiencing success serving the California market, then California users are increasingly making choices that are helping them save money, add value, and reduce emissions.
What this report finds is that these seven sectors have grown rapidly since the 1990s. They have consistently outpaced the growth of the overall California economy. From January 1995 to January 2010 these seven growth sectors more than doubled in size, experiencing a 109 percent rise in jobs, while the state’s total employment grew by only 12 percent. The two largest sectors, Energy Generation and Energy Efficiency, generated over 32,900 new jobs and over 2,300 new establishments statewide between 1995 and 2010.
More recently, during the depths of the national and global recession (January 2009 to January 2010), these seven growth sectors in California were remarkably resilient, holding steady in terms of jobs. In contrast, California’s overall economy lost significant ground, losing seven percent of its employment. During this time, three regions actually added jobs in these growth sectors, including the Los Angeles Area (up 1%), Orange County (up 2%), and the San Diego Region (up 1%) – in each case while the overall regional economy was losing jobs.
Even in difficult economic times, the products and services of companies in these growth sectors had sufficient market demand to maintain their employment levels. In fact, in the future, market demand in these areas is likely to increase rapidly as a result of the implementation of AB 32 and other California state policies.
About The Environmental Defense Fund
The Environmental Defense Fund is “a leading national nonprofit organization, which creates transformational solutions to the most serious environmental problems. The Environmental Defense Fund (EDF) links science, economics, law and innovative private-sector partnerships. See twitter.com/EnvDefenseFund; facebook.com/EnvDefenseFund”