Climate Change and the California Economy

California's recent Assembly Bill 32 will help the Golden State reduce its carbon emissions. AB 32 requires the California Air Resources Board (CARB) to develop regulations and market mechanisms that will ultimately reduce California's greenhouse gas emissions by 25 percent by 2020. Mandatory caps will begin in 2012 for significant sources and ratchet down to meet the 2020 goals.

Impressively, the Union of Concerned Scientists was able to organize a letter from sixty of California's leading economists, including three Nobel laureates, addressed to Governor Schwarzenegger and state legislators, urging them to accelerate policies to reduce global warming emissions. “The most expensive thing we can do,” they wrote, “is nothing.”

Critics of this recent legislation claim that it will cost California jobs, or that it will only curb carbon emissions by a small percentage compared to global carbon emissions. These criticisms miss the point. California's recent legislation is as much about the economy as it is about climate change. Even the state's largest investor-owned utility, PG&E, vocally supported the legislation.

This legislation will create new jobs in new sectors. It is an investment in California's economic future while we still have a strong economy and before any negative impacts from global climate change are severely felt. A recent study by the University of California at Berkeley projects that meeting AB 32's emissions limits can boost the Gross State Product (GSP) by $60-74 billion and create 17,000-89,000 new jobs. More importantly, it pushes California back out in front of the technological curve. The technologies that will be developed in California between now and the 2020 deadline will be vital to the whole world over the coming century.