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Executive Summary
Iowa can be a leader in renewable
energy, providing home-grown power to increase our state’s and country’s energy
security. Fortunately, investing in clean energy policies would generate new
high-paying jobs, save consumers and businesses billions of dollars, and boost Iowa's economy while
reducing power plant pollution. Both reducing demand through energy efficiency
and diversifying our electricity mix with renewable energy sources also will
solve the problems of Iowa’s
current reliance on coal, oil, gas, and nuclear power for electricity
generation – a legacy of environmental and public health problems. This legacy
also includes volatile price fluctuations, costing consumers dearly on
electricity bills.
Over the past
50 years, the federal government has provided more than $500 billion in
subsidies to the fossil fuel and nuclear industries, investing a fraction of
that in energy efficiency and renewable sources of energy such as wind, solar
and geothermal. As a result, coal, nuclear power, oil and gas provide more than
95 percent of Iowa’s
electricity. This dependence on fossil fuels carries severe public health
consequences, including asthma attacks, respiratory disease, heart attacks, and
premature deaths. Moreover, fossil fuels, such as coal and oil, pollute the
environment from the point of extraction to combustion in the form of global
warming, acid rain, oil spills and runoff pollution. At the same time, nuclear
power has left us with a nuclear waste problem for which no safe solution
exists.
Despite the
environmental and public health implications of relying on fossil fuels and
nuclear power to meet our energy needs, the federal government continues to
push energy policies that would offer more of the same. Last year’s federal
energy proposals included billions of dollars in new and extended tax breaks
for oil and gas drilling, loan guarantees and federal subsidies for building
new coal plants, and incentives to build the first new nuclear power plants in
30 years. This continued investment in fossil fuels and nuclear energy ignores
recent research documenting the potential to meet more of our electricity needs
with energy efficiency and renewable sources of energy.
We can rely on
clean energy resources; in fact, the technical potential of wind, clean
biomass, and geothermal resources in the United States is four times greater
than our current total electricity consumption. Here in Iowa, we could generate 17 times our current
electricity usage from renewable energy sources such as wind and clean biomass.
Additionally, conservative estimates suggest that energy efficiency programs
could reduce our electricity use in Iowa
by 18 to 28 percent. Rather than import dirty coal and rely on outdated fossil
fuels, Iowa
should harness its homegrown sources of renewable energy, including wind, solar
and biomass, and lead the development of energy for the 21st Century.
Proponents of
the dirty energy status quo contend that investing in fossil fuels and nuclear
power are essential for a healthy and vibrant economy and that diverting
investment to renewables and efficiency will cost us jobs and increase costs to
consumers. A growing body of literature, however, shows that investing in
energy efficiency and technologies such as wind and solar power boosts local
economies and creates jobs, particularly in a state such as Iowa, whose renewable energy resources are
great. Moreover, investing in renewables and energy efficiency helps to
diversify the electricity market and reduces consumer dependence on coal and
natural gas, thereby saving consumers money and shielding them from
fluctuations in market prices.
This brings us
to the central question of this report: what would be the economic and consumer
impacts of pursuing clean energy policies?
Specifically,
we examined the economic and consumer impacts of pursuing two different
scenarios involving renewable energy and energy efficiency policies:
Scenario 1:
Enacting a 20 percent clean renewable energy standard, commonly referred to as
a renewable portfolio standard or RPS, which would require Iowa to generate 20
percent of its electricity from clean energy by the year 2020, and funding
publicly-run energy efficiency programs in Iowa with $50 million each year from
2007 to 2020; and
Scenario 2:
Enacting a 20 percent clean renewable energy standard and funding publicly-run
energy efficiency programs with $100 million each year from 2007 to 2020 in Iowa, which would eliminate Iowa’s projected 1.5 percent yearly increase
in electricity demand.
We found that
implementing these clean energy policies would greatly benefit the economy and
consumers in Iowa
while reducing air pollution from power plants.
In Iowa, the clean energy
policies of Scenario 1 would:
• Create 2,340
net jobs in 2020 and a net annual average of 1,413 jobs between 2005 and 2020;
Increase wages by $31 million in 2020;
• Save all
consumers—residential, commercial, and industrial—$147 million on energy bills
cumulatively by 2020 and in 2020 would cut expected electricity demand by 10
percent;
• Reduce
global warming carbon dioxide emissions from power plants by eight percent of
2002 levels; smog-forming nitrogen oxide emissions by seven and one-half
percent of 2002 levels; and soot-forming sulfur dioxide emissions by six and
one half percent of 2002 levels, all by 2020.
In Iowa, investing in these
clean energy policies in Scenario 2 would:
• Create 5,166
net jobs in 2020 and a net annual average of 2,679 jobs between 2005 and 2020;
Increase wages by $37 million in 2020;
• Save all
consumers—residential, commercial, and industrial—$1.086 billion on energy
bills cumulatively by 2020 and in 2020 would cut expected electricity demand by
20 percent;
• Reduce
global warming carbon dioxide emissions from power plants by 11 percent of 2002
levels; smog-forming nitrogen oxide emissions by nine percent of 2002 levels;
and soot-forming sulfur dioxide emissions by eight percent of 2002 levels, all
by 2020.
The findings
of this report—and hence the title—underscore the benefits of Redirecting Iowa’s
Energy. Strong support for energy conservation and efficiency, coupled with
increased emphasis on the development of renewable energy, can help solve our
current energy problems, provide a significant boost to the economy and move us
towards a safer, healthier energy future.
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