Colorado residents may indeed find cleaner air and water to be a priceless concept, but they’re not told enough about the true cost to the state economy before new policies are passed, a study says.
More than 100 major environmental requirements have been added to state laws since 2009, the Common Sense Institute says, and those have shaved $32 billion from Colorado’s economic output. The conservative policy nonprofit, which has been critiqued for not disclosing donors or detailing the methodology of its high-profile economic studies, wants policymakers to make costs a bigger part of their deliberations.
The flurry of new environmental policies since Colorado set greenhouse gas reduction goals in 2019 have been “very costly, and the impacts have to be taken seriously, and they should be openly debated. It has to be known, first,” said Kelly Caufield, executive director of Common Sense Institute, in an interview.
The policies, such as closing coal-fired power plants or restricting how and where new oil and gas wells can be drilled, have cost nearly 31,000 jobs in that time, the institute’s analysis claims. Job losses or new jobs foregone include reductions in coal mining, power plant jobs, transportation, oil well and production jobs, and more. Companies spend far more time and money answering to regulators, the study adds.
The Colorado Energy Office and multiple environmental groups are dismissing the study as inaccurate at best and a misleading “op-ed” rather than a credible economic analysis.
“There’s simply no evidence to support any of the claims that they make that environmental policies are costing Coloradans,” said Alex DeGolia, the Carbondale-based director of state legislative and regulatory affairs for the Environmental Defense Fund. Simply pointing out that some consumer prices have gone up, or that oil and gas employment varies, is not economic analysis, he said.
“Any freshman college student in Econometrics 101, probably the first day, the first thing they learn is that correlation does not equal causation,” DeGolia said.
The EDF’s Maureen Lackner said any rigorous analysis shows the number of active drilling rigs in Colorado depends on the international price per barrel of oil, not on local well setback regulations or new rules plugging methane leaks.
In New Mexico, for example, drilling and production “have skyrocketed since regulations have been implemented,” Lackner said.
The Colorado Energy Office called Common Sense Institute’s approach “simplistic” and at odds with rigorous economic analyses required when state regulators consider a new pollution-limiting rule.
The Advanced Clean Trucks rule adopted in 2023, for example, requires an increasing percentage of heavier trucks for sale in Colorado to feature extremely low emissions through electrification or hydrogen engine technology beginning in 2027, the state energy office said. The cost-benefit analysis required before the vote “found net benefits of $15.7 billion” from savings like fuel costs and lower maintenance. The state studies also include calculations of the cost per ton of removing various pollutants from the economy, and the cost of “best available” control technology that will still allow companies to do business.
Common Sense Institute said its conclusions were reached through “observed price, production, tax, and consumption changes.” The study’s listing of more than 100 environmental policy initiatives is a detailed survey of recent pollution and greenhouse gas cleanup history in Colorado.
State air pollution staffers and environmental advocates make their own calculations of economic impact when they propose new greenhouse gas or ozone regulation. They include positive impacts, such as lower health care spending when reduced pollution eases asthma cases or heart conditions. Other economic benefits can include increased recreation spending, reductions in spending for costly fossil fuels, or attracting new residents and employers who seek clean air and water and open space.
A tanker sprays water on the coal dust after the last chuck of coal was loaded onto the conveyor at the Martin Drake Power Plant, Friday, Aug. 27, 2021, in downtown Colorado Springs, Colo. The power plant has been using coal since it began providing electricity to the city in 1925. The plant will continue to operate on natural gas until the end 2022 when it will be demolished. (Christian Murdock/The Gazette via AP)Caufield said Common Sense would welcome competing economic studies “if that can be done in a way where the playing field is even, and then policymakers can decide for themselves. The public can decide for themselves whether the costs are justified and make informed decisions.”
Environmental groups respond that the institute report is cherry-picking costs and savings to fit a narrative critical of renewable energy.
“Spikes in utility bills,” for example, “are not the result of sensible climate policies,” said Parks Barroso, Colorado clean energy manager and attorney at the nonprofit Western Resource Advocates.
Coloradans are still paying natural gas surcharges on their Xcel bills from winter storm Uri in 2021, Barroso noted — a debacle that was not a phenomenon conjured by environmental groups but a failure of natural gas distribution and storage systems in Western states.
Conservative critics like to say solar and wind are unreliable and expensive replacements for fossil fuels, Barroso said. But, he said, “during winter storm Uri, the vast majority of generators — over 70% — that experienced unplanned outages were coal and gas plants.”
On utility costs alone, Barroso said, the Common Sense report includes “fundamental” misunderstandings of current policy and regulation.
The Common Sense assessment appears to blame Colorado policies requiring the replacement of coal-fired power plants with cleaner generating alternatives for higher utility prices than in neighboring states, the EDF noted. In reality, multiple rigorous studies show fossil fuel plants cost more to build and operate now than renewable plants, DeGolia said.
He pointed to a frequently updated study called the Coal Cost Crossover, from the Energy Innovation think tank, a nonpartisan research group focused on reducing emissions. The most recent analysis showed that by 2024 “99 percent of all U.S. coal plants are now more expensive to run than replacement by new local solar, wind, or energy storage.”
Utility watchdogs also say that while certain government mandates are passed through to consumers and raise bills, the power companies are also managing to preserve their profits. Xcel Energy, a multistate power company and Colorado’s largest utility, reported $483 million in profits for the first quarter of 2025. Xcel’s Colorado operations contributed the largest share of those earnings at 53%.
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