Here is the conclusion from the just-released economic analysis by the California Air Resources Board’s of AB32, the Global Warming Solutions Act of 2006:
The analysis we have conducted indicates that if California implements the comprehensive greenhouse gas strategy, as recommended in the draft Scoping Plan, not only will the economy grow by a similar amount as we move toward 2020, but it will grow at a slightly higher rate. Increased economic growth is anticipated primarily because the investments motivated by several measures, such as the expansion and strengthening of existing energy efficiency programs and implementation of new and existing policies to reduce emissions from the transportation sector, result in substantial energy savings that more than pay back the cost of the investments at expected future energy prices.
These results support the conclusion that the decision made in 2006 to reduce its greenhouse gas emissions was not just a good environmental choice, it also will help sustain growth and enable the state to reap the full range of economic benefits that come with a transition to a more sustainable future.
The debate over this long-awaited analysis, which I have not yet digested, should be an important indication about whether policy makers are committed to an honest assessment of economic impacts – or whether those assessments are reverse-engineered to satisfy a policy agenda. A straight and disciplined analysis that comes to the above conclusions would indeed be impressive support for more command-and-control regulations. However, to succeed in this the analysis must explain how investments required by government mandates will result in a better economic return than investments determined in the private marketplace.
New investments in energy efficiency, etc., are not made in a vaccuum, but in competition with all the other opportunities for economic return. That these investments are not already being made would seem to speak to their relative economic value.