A Green Growth Program for Colorado

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Abstract

This study examines the prospects for a transformative green growth program for Colorado. The centerpiece of the program is clean energy investments—i.e. investments to raise energy efficiency levels and expand the supply of clean renewable energy sources. These investments should be undertaken in combination by the public and private sectors throughout the state. This program can advance two fundamental goals: 1) promoting global climate stabilization by reducing carbon dioxide (CO₂) emissions in Colorado without increasing emissions outside of the state; and 2) expanding good job opportunities throughout the state while the state’s economy continues to grow. The program is specifically designed to reduce Colorado’s CO₂ emissions by 50 percent as of 2030 and by 90 percent as of 2050 relative to the state’s 2005 emissions level while the economy grows at an average annual rate of 2.4 percent. The consumption of oil, natural gas and coal to generate energy will need to fall sharply in Colorado, since CO₂ emissions result through the combustion of fossil fuels.

We estimate that total investments in energy efficiency and renewable energy will need to average about $14.5 billion per year between 2021 – 2030, equal to about 3.5 percent of Colorado’s average annual GDP over those years. These investments will generate about 100,000 jobs per year in the state. New job opportunities will be created in a wide range of areas, including construction, sales, management, production, engineering and office support. At the same time, the contraction of the state’s fossil fuel related industries will generate about 700 job losses per year, of which about 600 will be non-managerial jobs. We develop a Just Transition program for workers impacted by the contraction of the state’s fossil fuel industries. The program includes: pension guarantees for retired workers who are covered by employer-financed pensions; retraining to assist displaced workers to obtain the skills needed for a new job and 100 percent wage replacement while training; re-employment for displaced workers through an employment guarantee, with 100 percent wage insurance; and relocation support as needed. We also propose a broader set of policies to meet the state’s emissions reduction goals. These include a carbon tax; strengthening the state’s existing energy efficiency and renewable portfolio standards; strengthening existing procurement programs for clean energy public investments; increasing financial subsidies for clean energy investments; expanding the state’s worker training programs for clean energy employment opportunities; and channeling a disproportionate share of new clean energy investments into communities that will be significantly impacted by the contraction of the state’s fossil fuel related industries.