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A Program for Economic Recovery and Clean Energy Transition in California

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A Program for Economic Recovery and Clean Energy Transition in California A PROGRAM FOR ECONOMIC RECOVERY AND CLEAN ENERGY TRANSITION IN CALIFORNIA By Robert Pollin, Jeannette Wicks-Lim, Shouvik Chakraborty, Caitlin Kline, and Gregor Semieniuk Department of Economics and Political Economy Research Institute (PERI) University of Massachusetts-Amherst JUNE 2021 Acknowledgments This project was commissioned by the American Federation of State, County and Municipal Employees Local 3299, the California Federation of Teachers, and the United Steelworkers Local 675. We greatly appreciate their financial support as well as the fact that they respect- ed our terms of engagement. Those terms included full autonomy in drafting the study and reaching the conclusions presented here. The study greatly benefitted from many discussions over the course of a year with Tracey Brieger, Campaign Director for Jobs with Justice, San Francisco; Michael Leon Guerrero, Executive Director of the Labor Network for Sustainability; Jeff Johnson, former President of the Washington State Labor Council, AFL-CIO; Joe Uehlein, President of Labor Network for Sustainability; and Veronica Wilson, California Organizer for Labor Network for Sustainability. Paul D. Brooks, Dave Campbell of United Steel Workers Local 675, Martha Hawthorne of the Service Employees Industrial Union Local 1021, James Martel of the California Federation of Teachers, San Francisco State University, Jim Miller of California Federation of Teachers, Ernie Pacheco of Communications Workers of America Local 9412, and Meredith Staples read a preliminary draft of this study and provided valu- able comments. Ray Carharer, Emily Diaz-Loar, Bilen Gurara, and Sophia Normark all made valuable con- tributions through their research assistant work. Kim Weinstein produced this wonderfully readable document out of our multiple cyber-piles of text and tables. PERI’s Administrative Director Nicole Dunham provides a bedrock of support for all of our research work. PERI: A PROGRAM FOR ECONOMIC RECOVERY AND CLEAN ENERGY TRANSITION IN CALIFORNIA II Endorsements The following unions have endorsed this report and its findings: ¡ Alameda Labor Council ¡ American Federation of State, County, and Municipal Employees Council 57 ¡ American Federation of State, County, and Municipal Employees Local 3299 ¡ American Federation of State, County, and Municipal Employees United Domestic Workers ¡ California Faculty Association—San Francisco State University Chapter ¡ California Federation of Teachers ¡ Communication Workers of America District 9 ¡ International Federation of Professional and Technical Engineers Local 21 ¡ Service Employees International Union California ¡ Service Employees International Union Local 721 ¡ Service Employees International Union Local 1021 ¡ Service Employees International Union Nurse Alliance of California ¡ Service Employees International Union United Service Workers West ¡ United Auto Workers Local 2865 ¡ United Auto Workers Local 5810 ¡ UNITE HERE Local 30 ¡ United Steelworkers Local 5 ¡ United Steelworkers Local 675 ¡ University Professional and Technical Employees—Communications Workers of America 9119 PERI: A PROGRAM FOR ECONOMIC RECOVERY AND CLEAN ENERGY TRANSITION IN CALIFORNIA III Table of Contents Acknowledgments .......................................................................................................................................................................... ii Endorsements ................................................................................................................................................................................iii Summary of Study........................................................................................................................................................................1 Study Highlights ...........................................................................................................................................................................6 1. THE PANDEMIC, ECONOMIC COLLAPSE, AND CONDITIONS FOR RECOVERY ...............................................................11 2. CALIFORNIA’S CLEAN ENERGY TRANSITION PROJECT ....................................................................................................20 3. CLEAN ENERGY INVESTMENTS AND JOB CREATION .......................................................................................................49 4. INVESTMENT PROGRAMS FOR MANUFACTURING, INFRASTRUCTURE, LAND RESTORATION, AND AGRICULTURE ...........................................................................................................................76 5. TOTAL JOB CREATION IN CALIFORNIA THROUGH COMBINED INVESTMENT PROGRAMS .................................94 6. CONTRACTION OF CALIFORNIA’S FOSSIL FUEL INDUSTRIES AND JUST TRANSITION FOR FOSSIL FUEL WORKERS ....................................................................................................................96 7. COUNTY-LEVEL JOB CREATION, JOB DISPLACEMENT, AND JUST TRANSITION .......................................................114 8. ACHIEVING A ZERO EMISSIONS ECONOMY BY 2045 ....................................................................................................127 9. FINANCING CALIFORNIA’S RECOVERY AND SUSTAINABLE TRANSITION PROJECTS ..............................................134 Appendix 1: Employment Estimating Methodology .............................................................................................................................. 139 Appendix 2: Estimating Job Characteristics for Clean Energy, Manufacturing/Infrastructure, Agriculture/Land Restoration, and Fossil Fuel Industry Jobs .......................................................................................... 143 Appendix 3: Detailed Sources for Pension Fund and Income Data ....................................................................................................... 146 Appendix 4: Job Attrition Figures for Episodic Transition of Fossil Fuel Sectors: Episodes 2 and 3 .................................................. 148 Endnotes ....................................................................................................................................................................................................... 150 References .................................................................................................................................................................................................... 160 About the Authors ....................................................................................................................................................................................... 172 PERI: A PROGRAM FOR ECONOMIC RECOVERY AND CLEAN ENERGY TRANSITION IN CALIFORNIA IV SUMMARY OF STUDY The COVID-19 pandemic generated severe public health and economic impacts in Califor- nia, as with most everywhere else in the United States. However, as of this writing in May 2021, the public health dangers from COVID-19 have diminished dramatically, in California and throughout the U.S. more generally, due to the development and distribution of multiple vaccines that have demonstrated their effectiveness. The U.S. economy, and the California economy specifically, are moving toward a full reopening, with the U.S. economy having grown by 6.4 percent over the first three months of 2021. Both at the national level and within California, the focus of economic policy should therefore start shifting to the question of how to advance a recovery that is strong, equitable and sustainable. This study presents a recovery program for California that will also build a durable foundation for an economically robust and ecologically sustainable longer-term growth trajectory. As we emerge from the pandemic experience, we can also regain focus on the reality that we have truly limited time to take decisive action around climate change. The State of California has long been a national and global leader in implementing robust climate stabilization policies. This includes the 2018 Executive Order B-55-18 by then Governor Jerry Brown. This measure committed the state to become carbon neutral no later than 2045 and to produce net negative emissions thereafter. Governor Newsom has built on this foundation through his 2020 Executive Order N-79-20. Among its provisions, this order es- tablishes that, as of 2035, all new cars and passenger trucks sold in California are required to be zero-emissions vehicles. The program we present in this study is based on these climate and emissions-reduction goals that are already established in policy in the State of Califor- nia. This study outlines an investment program through which the state can achieve these established goals. As we show, designing a robust climate stabilization project for California that is able to achieve the state’s established emissions reduction commitments is a realistic prospect. The climate stabilization project can also serve as a major engine of economic recovery and expanding economic opportunities throughout the state. This includes an increase of over 1 million jobs in the state through investment programs in energy efficiency, clean renewable energy, public infrastructure, land restoration and agriculture. We also develop a detailed just transition program for workers and communities in California that are currently dependent on the state’s fossil fuel industries for their livelihoods. In particular, we focus here on condi- tions in Kern, Contra Costa, and Los Angeles
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