A March 4 letter from legislative analyst Mac Taylor to California State Sen. Dave Cogdill (R-Modesto) attempts to cast doubt on the economic benefits of the state’s landmark global warming bill, AB 32. According to Jasmin Ansar, a climate economist with the Union of Concerned Scientists (UCS), Taylor fails to cite any research to support his claims that the state’s economy would suffer under AB 32.
The public release of Taylor’s letter coincides with a statewide effort to gather signatures for a ballot initiative asking voters to nullify AB 32 unless state unemployment drops to 5.5 percent. Two Texas-based oil companies, Valero and Tesoro, are funding that effort. Current unemployment in California exceeds 12 percent.
“These economic attacks on AB 32 are baseless,” Ansar said. “There are many independent economic studies that show AB 32’s clean energy and climate policies will have either a neutral or slightly positive impact on our economy. California has proven time and again that economic growth and environment protection go hand in hand.”
On the first page of his letter, Taylor claims that “on balance the aggregate net jobs impact in the near term is likely to be negative.” This statement is purely speculative. It is not backed up by any research. Taylor devotes the rest of his letter to criticizing a preliminary economic analysis of the California Air Resources Board’s initial plan for implementing AB 32. He then concludes that “it seems most likely to us that the implementation of AB 32 …will result in the near term in California job losses.” Again, he presents this claim with no reference to any analysis that would support it.
Taylor’s baseless claims are contradicted by a number of independent economic analyses that find significant job growth potential at the state and national level for many climate change policies:
• Historically, energy efficiency, which AB 32 would expand, has been an economic winner for California. An October 2008 study by researchers at University of California, Berkeley found that California’s energy efficiency policies generated nearly 1.5 million new jobs from 1977 to 2007, while eliminating fewer than 25,000.
• A December 2009 report on clean energy manufacturing and related jobs by the nonpartisan research group Next 10 found that California job growth in such fields expanded 36 percent from 1995 to 2008. Overall, clean energy jobs represent one of the bright spots in California’s economy.
• An October 2009 Next 10 report concluded that if AB 32 were put on hold, the state would lose $80 billion in gross state product and a half million jobs by 2020. Conversely, implementing a 33 percent renewable electricity standard and a 1 percent annual improvement in energy efficiency would increase gross state product by $20 billion and generate 112,000 jobs.
• A December 2009 Center for Resource Solutions review of several macroeconomic analyses concluded that climate solutions are affordable and that pollution reductions called for by AB 32 are consistent with economic growth.
Failing to act on climate change would be far more expensive than adequately addressing it. Another Next 10 report, published in November 2008, found that the state has $4 trillion in real estate assets, of which $2.5 trillion are at risk from extreme weather events, sea level rise and wildfires. Climate change will come with a projected annual price tag of $300 million to $3.9 billion for California over this century, depending on how warm the world gets, the report concluded.
A recent UCS-commissioned case study by the Brattle Group found an insignificant increase in energy costs for small businesses under AB 32.
The Union of Concerned Scientists is the leading U.S. science-based nonprofit organization working for a healthy environment and a safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts, and also has offices in Berkeley, Chicago and Washington, D.C. For more information, go to www.ucsusa.org.