"In short, the economic modeling shows that the electrification policy proposed by the Coalition offers significant and widespread benefits to the American people, including reducing our federal budget and trade deficit," Electrification Coalition member David Crane, President and CEO of NRG Energy, said in a speech given at the National Press Club. "I believe we are on the cusp of the next great tectonic shift in our economy, one that will transform the way we use energy both in our homes and on the road."
The Electrification Coalition, a group of business leaders representing the entire value chain of an electrified transportation sector, released their Electrification Roadmap in November 2009. The plan called for the creation of localized concentrations of electrification, geographic areas in which all of the elements of an electrified transportation system are deployed, thus providing a crucial first step toward moving electrification beyond a niche product into a dominant, compelling, and ubiquitous concept.
Shortly after releasing the Roadmap, the Coalition commissioned the Interindustry Forecasting Project at the University of Maryland and Keybridge Research to study the long-term economic effects of their policy proposals. A summary of the study’s findings is attached.
Summary of Findings
The study being released today finds that the EC policy package results in significant economic benefits for the United States over the simulation period:
By 2030, total employment would increase by 1.9 million jobs. Among the interesting industry effects: by 2030 there would be 560,000 more manufacturing jobs, 276,000 more jobs in travel and tourism, and 73,000 more jobs in professional services. Employment in the motor vehicle industry (including motor vehicle parts) would be about 106,000 jobs higher than the base. Employment in the industries that supply key electric and electronic components to electric vehicles would increase by 112,000 jobs.
Over time, the federal budget deficit would improve as a result of the policies in the Roadmap. Because of the higher levels of income and GDP resulting from the policies, the U.S. federal budget deficit would improve by a cumulative (2010 to 2030) $336 billion, net of policy costs.
By 2030, the typical U.S. household’s annual income would rise by $2,763 (2008 dollars). This represents an increase of about 2.2 percent.
Cumulatively, during the 2010-2030 period, households would experience an increase of $4.6 trillion (2008 dollars) in aggregate income–money that can be saved or spent on other goods and services.
By 2030, the typical U.S. household would spend less per year directly on energy for transportation. The combination of higher income and less spending on energy means that the typical household would be able to enjoy about $3,687 (2008 dollars) more in consumption of goods and services (or personal savings).
U.S. crude oil and petroleum product imports would fall sharply, by 3.2 million barrels per day by 2030. Cumulatively, between 2010 and 2030, the United States would import nearly 11.9 billion fewer barrels of foreign oil. This compares to estimated reserves of 4.3 billion barrels for Prudhoe Bay, and slightly less than 30 billion barrels for total U.S. proved reserves.
By 2030, the U.S. trade balance would improve by about $127 billion dollars (2008 dollars).
World demand for oil would fall, leading to lower world oil prices. Outside commodity price experts have estimated that the price of oil would be almost 7 percent lower by 2030 than it would be without the EC policy package.
The U.S. economy will be stronger and more resilient. The Electrification Coalition policies–once fully implemented–would mitigate roughly one-third of the economic losses caused by a future oil price shock. By 2025, the EC policies would prevent the loss of 1.4 million jobs in the first year alone of a price shock-induced recession.