Report: Economic Resiliency Isn’t Just About Climate Infrastructure, It’s About Jobs

Bay Area Council Economic Institute, San Francisco
Image Courtesy of the Bay Area Council Economic Institute

By Meghan Hall

California has seen its fair share of expensive climate events over the past several years, including a 376-week drought ending in March of 2019 and several successive years of brutal wildfires. State officials have worked to pass initiatives such as California’s cap-and-trade program, which has provided $12 billion in funding for nearly 430,000 environmental resilience projects. While their connection to the environment benefits is often obvious to many in the form of greenhouse gas emissions reduction, habitat protection, cleaner air and more, the economic benefits of such investments are not often as obvious. A recent report released by the Bay Area Council Economic Institute shows that the economic benefits of investing in climate infrastructure are clear, and can create nearly 15 full-time job years per $1 million of spending.

“We partnered with the Resources Legacy Fund, and really the idea behind it was to make the point that in addition to all of the environmental benefits that climate resilience projects can have—both near term when you’re talking about heat events and wildfires, but also longer term when you talk about costal resilience, droughts—the economic impacts often get lost,” explained Jeff Bellisario, executive director at the Bay Area Council Economic Institute. “The point behind this report was to say that this type of green infrastructure has dual benefits to the states climate resilience but also to its economic recovery.” 

The report analyzes two investment packages: a $5 billion and an $8 billion package. The packages are based on existing spending proposals from the California State Legislature, such as Senate Bill 45 and Assembly Bill 3256, as well as the proposed budget for the 2020-2021 fiscal year. IMPLAN modeling systems were used to estimate the resulting economic benefit of green infrastructure spending across four categories: wildfire and forest health, water, costal resilience and sea level rise, and heat and community resilience.

Wildfire and forest health made up about 35 percent of total climate resilience expenditures and includes a number of activities include engineering and consulting for project scoping, wildfire protection, conservancy and forest health. Consulting work and real-estate related spending in relation to land acquisition accounted for nearly 20 percent of assumed expenditures, while spending related to earth movement, planting, vegetation removal and site clean-up made up nearly 40 percent. Ultimately, the Bay Area Council Economic Institute found that investments in this category yields about 16.26 full-time equivalent job years per $1 million spent.

Water-related expenditures made up the next largest chunk of total climate resilience spending, at 31 percent. These programs typically include groundwater sustainability, restoration of rivers and lakes to recycled water projects. According to the report, for every $1 million spent, investment in water-related infrastructure projects produces about 13.77 full-time equivalent job years. The study posits that restoration programs along the San Francisco Bay can create between 3,300 and  6,600 jobs alone.

Following behind water and wildfire expenditures is costal resilience, which accounts for 20 percent of climate resilience spending. California has more than 3,400 miles of shoreline, making up 43.5 percent of the coastal area on the west coast. Studies have estimated that a 100-year flood event could cost the San Francisco Bay Area $10.4 billion, highlighting the importance of investments in costal resilience projects, including wetlands restoration, infrastructure projects including damns, bridges and utility plants, and ecosystem revitalization. The Bay Area Council Economic Institute found that $1 million in spending packs a punch produces 15.92 full-time equivalent job years.

The last category examined by the Bay Area Council Economic Institute is spending in extreme heat and community resilience measures, which accounts for 14 percent of related expenditures. Such spending includes urban greening, resilience planning and a variety of other construction and retrofit projects aimed at limiting environmental emergencies. While the economic impact for this category is less than its counterparts, it still produces benefit. The study states that for every $1 million spent, 12.54 full-time equivalent job years are created.

“You can see no matter where you choose to invest within these resilience categories, they do have job production benefits,” said Bellisario.

And, now with four million Californians applying for unemployment benefits, the Bay Area Council Economic Institute underlines that there is an urgent need for the state to begin evaluating how it can create jobs in the future.

“Everyone is talking about economic recovery,” said Bellisario. “When we embarked on this project, we weren’t far along in this pandemic, and we didn’t understand the long-term uncertainty and the long-term job loss that has been created—and will be created—as we go forward. As we talk about recovery, and we look at the types of jobs lost, these are the types of jobs in construction and agriculture activities that could be good job stimulus because they replace jobs that were lost, but they are also jobs that provide kind of that middle-wage and allow folks to survive this type of crisis.”

Additionally, added Bellisario, the investments can also create savings in the long run, as resilience measures mitigate the economic impact of major climate events. 

“It’s not just about the climate, it is also about the economy, and that I think these numbers are more important as the state begins to think about what policies and what investments can be made to build us back up,” added Bellisario. “These types of investments have long-term returns and benefits, maybe not in the way you think about a stock or a bond, but they have savings benefits. We know [climate events] are coming, so if we are able to make these investments to mitigate the now, that has huge potential cost savings for the state.”

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