Decarbonization initiatives would generate significant benefits to Florida’s economy
Cambridge Econometrics applied our macroeconomic model E3-US to complete a first-of-its kind analysis in Florida on the economic benefits of decarbonization for The Nature Conservancy, in partnership with AECOM.
The Nature Conservancy is working in Florida to shape policies that benefit both people and nature, including efforts aimed at reducing Florida’s greenhouse gas (GHG) emissions and ensuring access to clean and reliable energy.
In 2022, the Florida Climate Institute (FCI) quantified Florida’s baseline GHG emissions and set out three emissions scenarios. A business-as-usual baseline; 100% clean electric power by 2035; and net zero emissions by 2050.
Using our in-house macroeconomic E3-US model, Cambridge Econometrics modeled the effects of both decarbonization scenarios outlined the FCI report. The analysis focused on evaluating the effects of additional investments (over the baseline) on gross state product, employment, consumer spending, and other economic indicators. Additionally, E3‑US’ integrated treatment of the energy system provided an estimate of the effect of transitioning away from fossil fuel-based electricity to clean power on the cost of electricity.
By 2035, Florida will see a significant shift towards renewable energy with solar set to account for more than 67% of power generation. The transition will also be seen in the transportation sectors as EV’s reach price parity with internal combustion engine vehicles and by 2050, EVs will make up more than 70% of the passenger vehicle fleet.
Brendan Cox, Principal Economist of Cambridge Econometrics comments:
We are pleased to have collaborated with AECOM on our report for The Nature Conservancy: Economic Benefits of Decarbonization in Florida. Our analysis highlights that strategic investments in clean energy and multi-sector decarbonization efforts can further economic growth, job creation, and consumer savings across the state. We are proud to be part of this critical initiative, highlighting our commitment to economic research that fosters sustainable growth.
The analysis also highlights the economic benefits of decarbonization initiatives.
By 2035, decarbonization of the power system is estimated to result in a state economy that is 1.5% larger compared to baseline projections, driven by investments in clean energy infrastructure.
By 2050, transitioning from fossil fuel-based electric power generation to clean sources like solar, will decrease the cost of electricity for consumers by around 17%, and economy-wide decarbonization results in a state economy that is 2% larger.
Greg Knecht, Executive Director of the Nature Conservancy comments:
With the support of our generous funders, donors, members, staff experts and partners, The Nature Conservancy in Florida with the expertise of AECOM Technical Services and Cambridge Econometrics has published a first-of-its kind economic breakdown of clean energy adoption in Florida: Economic Benefits of Decarbonization in Florida. TNC is guided by data and science. This report uses state-of-the-art economics and modeling to envision how continued investment in renewable energy, transportation electrification and clean technology can reduce carbon emissions and deliver economic prosperity, including higher-paying jobs for workers of all education and skill levels, lower consumer costs and multiplier effects for our economy for generations to come.