Environmental preservation and economic growth are balanced as individuals, businesses, and governments create a habitable future.
Leaning away from a fossil fuel economy, many organizations are opting for sustainable options that also increase their respective economies.
Since the Industrial Revolution, the consumption of resources that burn fossil fuels has been correlated with economic growth. In the modern day, it seems that people have to go out of their way to be sustainable, with flimsy paper straws, reusable canvas bags, slow energy-efficient appliances, and sustainable products that end up costing more than the fossil fuel equivalent.
An article from the Journal of Consumer Research reported that individuals have a tendency to believe that when a product is more environmentally friendly, the manufacturer “diverted” resources away from its effectiveness.
Besides the economy, health concerns can also be detractors of the fossil fuel financial model.
Kenneth Gillingham, Senior Associate Dean of Academic Affairs and professor of Environmental and Energy Economics at Yale University, explains that there is “a great deal of economic research focused on monetizing the cost of environmental externalities.”
“Take air pollution, for example. There is substantial research demonstrating the causal effect of air pollution on respiratory health, with effects on heart attacks, reduced productivity, and premature deaths. Economists use this evidence to calculate the value of the reduced economic activity due to the consequences of the air pollution,” Gillingham said.
According to Gillingham, this would give a sense of the benefits of environmental policies that reduce air pollution. It would then be weighed against the costs of the technology used to reduce the emissions.
Bård Harstad, David S. Lobel professor in Business and Sustainability and professor of Political Economy at Stanford University, explains that economic growth has been accomplished with a larger extraction of natural resources.
“That type of growth is not sustainable. But if growth comes from new ideas and better ways of organizing production, then we can have sustainable and economic growth,” Harstad said.
Examples include investments in “green technology” that can benefit the economy because, according to Harstad, investments by one firm can lead to new knowledge that can help other firms save money by using less energy.
From solar panels to electric vehicles to clean energy, the advances in technology allow for this collaboration to happen.
Individuals: San Mateo County
Rafael Reyes, Director of Energy Programs at Peninsula Clean Energy, is one of many who decided to get an electric vehicle before the pandemic.
“I calculated we were spending $200 a month on gas and when we switched to an electric vehicle, I calculated that we were spending, instead, $50 on electricity. So we were saving $150 a month by having moved to an electric vehicle,” Reyes said.
This is echoed by Carlmont sophomore Maria Skaf. She says her household’s electric consumption and water heating are powered by solar panels. California is currently leading the United States in solar energy, with solar panels generating 27.3% of the state’s electricity.
“I feel so much better about my carbon footprint,” Skaf said.
Reye explains that individual action can be effective as well as government action.
“So every time somebody chooses to recycle or buy an electric vehicle or to get a clean, efficient water heater, as opposed to something using methane gas, those are all important parts of the whole picture,” Reyes said.
Business: Caltrain
In late 2024, Caltrain finished its fleet electrification project after decades of work.
“It took a great deal of effort on all fronts, making sure that we could secure the funding for a project of this size and scope, but ultimately, we knew that we had to deliver a modernized, green public transit service that provides a lot of modern amenities,” said Dan Lieberman, Public Information Officer of Caltrain.
This project was not without many obstacles along the way, as trains had to continue running while the electrification progress was being made.
“Any multi-billion dollar construction project is going to take a great deal of effort, and it took a lot of collaboration between our local, regional, state and federal leaders to make sure this money came through and this project moved forward,” Lieberman said.
Lieberman says the real challenge was building the project in the first place.
The last major electrification project was in 2000, with Amtrak’s Acela in Boston, Massachusetts. For Caltrain’s electrification, an overhead contact system was built along 51 miles of an active railway.
“That obviously took a great deal of time and effort to get done, but yet, now that we’re there, things are going remarkably well. We had some issues during the initial weeks with some on time performance issues that have most generally been resolved,” Lieberman said.
In the past few months, the ridership after electrification has grown to over 750,000 riders. The weekend riders have now surpassed pre-pandemic levels.
“The fact that we’ve seen this ridership growth is absolutely good news. Trends are continuing. We expect them to continue to grow,” Lieberman said.
Although with policies like Measure RR, which enacted a sales tax for public transit and a source of revenue for Caltrain, growth in ridership still benefits their profit. This translates to 29.9 million dollars in revenue for the 2024 fiscal year.
“The more we can get people on board, the more we are doing what we are here to do and at the same time working towards a better fiscal picture,” Lieberman said.
In 2025, the revenue from Caltrain fares alone is expected to grow by 20%. Besides this economic growth, the implications of removing diesel trains are significant as well.
“Recently, we had 104 diesel trains moving up and down every weekday, and now we have none, outside of our Gilroy service. That is entirely zero emission, which is a huge impact,” Lieberman said.
Combining the fiscal and environmental aspects creates an overall positive change from this electrification.
“There hasn’t been a project like this in a generation,” Lieberman said.
Public Agency: Peninsula Clean Energy
In 2002, California’s Assembly Bill 117 allowed local governments to create Community Choice Aggregators, a program that allows local governments to purchase or generate electricity for their community.
“We were formed in 2016, so eight years ago when all the cities and the county in San Mateo County came together and unanimously voted to create Peninsula Clean Energy,” Reyes said.
Reyes describes the motivation behind establishing PCE as both a sustainable and economic choice.
“The cities and the county decided to do this because Peninsula Clean Energy and other agencies like ours allow communities to invest more funds into the community to create jobs and also provide programs that are custom to those communities, as opposed to having all the dollars go outside of the region,” Reyes said.
Peninsula Clean Energy (PCE) is one of the first four community choice aggregators in California, according to Reyes. As a public agency, PCE produces the electrons used for electricity, which Pacific Gas and Electric Company (PG&E) takes “through the poles and wires and delivers to your home and everybody else’s homes and businesses.”
As a result, most municipal electricity comes from PCE. By default, anytime an electric account is created, it is automatically subscribed to PCE.
“Every time you flip a light switch, that’s coming from electrons that we provide,” Reyes said.
Individual residents in San Mateo County are saving money without any conscious effort.
“Some people think that we’re an extra charge on the bill when actually we’re replacing what would have been a larger charge instead,” Reyes said. “Most customers today are receiving electricity where the generation line is about 10% lower than what they would be paying for if they were getting that electricity from PG&E.”
After operating for eight years, Reyes says that PCE has saved customers close to $200 million on their electric bills. Additionally, PCE has cut hundreds of thousands of metric tons of greenhouse gas emissions by removing reliance on them. There are multiple reasons why PCE can afford this kind of financial mode, according to Reyes.
“One of the benefits that we bring is being ‘not-for-profit’; we’re not trying to make a profit. But the other thing is, because we are able to operate maybe more flexibly in the market with an emphasis on clean energy, we have been able to lower costs,” Reyes said.
Solar and wind power, which PCE relies on, is less expensive than fossil fuel energy generally. The International Renewable Energy Agency states that the cost per kilowatt of solar is $0.049 per kilowatt. Meanwhile, the fossil fuel-fired power generation cost range is between $0.055 and $0.148 per kilowatt.
“But then also because the cost of renewables has gone down tremendously in the last 10 years, the cost of installing solar power has gone down something on the order of 90%,” Reyes said. When we go to the market to buy power, generally, we’re seeing much better costs than fossil fuel alternatives.”
Besides cost, the lack of fossil fuels is beneficial for the environment. Moving outside of San Mateo County, many local governments are implementing community choice aggregators across California.
“There are now about 25 community choice aggregators across the state, so about a quarter of the population of California is a community choice aggregation,” Reyes said.
Other mandates such as the Renewables Portfolio Standard, a program created by the state of California to promote renewable energy, require 50% of energy from utility companies to be renewable by 2030.
“The fact that California has policies or the renewable portfolio standards has been very important in developing clean energy on the grid,” Reyes said.
There are a lot of important policies in place nationally, state-wide, and even locally, states Reyes.
Many cities, for example, have adopted building codes that require new construction, new buildings to be cleaner, and use clean electricity.
“The work to address climate change is important for many reasons, including its consequences and the economy. And the consequences for communities are large and will grow over time, so it’s very important for us to reduce those negative impacts by getting climate change under control,” Reyes said.
Moving Forward
Reyes believes that economic growth and sustainability are directly related to each other.
“We cannot have a strong economy if we are constantly having wildfires or constantly have drought,” Reyes said.
Lieberman corroborates this idea. He believes that there is “no intelligent way to grow economically that isn’t also growing environmentally at this point.”
“Non-sustainable growth is unsustainable, just by definition,” Lieberman said.
Recognizing this, the focus shifts toward solutions that balance economic development with environmental responsibility.
“This sort of intelligent, environmentally minded growth just seems like the only way forward, to make sure that we can responsibly manage the challenges of climate change and grow in a manner that can still be here in the future,” Lieberman said.
