Posted on 08/16/2006 2:50:11 PM PDT by calcowgirl
BERKELEY – A new University of California, Berkeley, report to be delivered to state legislators today (Wednesday, Aug. 16) finds that returning California greenhouse gas emissions to 1990 levels by 2020, as envisioned by pending global warming legislation, can boost the annual Gross State Product (GSP) by $60 billion and create 17,000 new jobs by 2020.
The report, "Economic Growth and Greenhouse Gas Mitigation in California," offers an independent assessment of the economic benefits of Assembly Bill 32 (AB 32), The Global Warming Solutions Act, sponsored by Assemblyman Fabian Nuñez (D-Los Angeles) and Assemblywoman Fran Pavley (D-Agoura Hills).
The study finds that the gains could be even larger - $74 billion in annual GSP and 89,000 new jobs by 2020 - if climate policies are designed to create direct incentives for California companies to invest in new technology.
"Our study demonstrates that meeting the 2020 limits under debate in Sacramento can stimulate the state economy," said David Roland-Holst, UC Berkeley adjunct professor of agricultural and resource economics and author of the report. "Climate action can be profitable."
The new analysis follows up on a January study that concluded that achieving half of the 2020 targets would promote economic growth in California. The new study extends its scope to meet the 2020 targets and reinforces the earlier conclusion about economic benefits. Furthermore, this new study identifies new benefits when innovation goals are coordinated with climate policy action.
Both studies use the Berkeley Energy and Resources (BEAR) model, a state-of-the-art, economy-wide forecasting tool, to trace the complex market interactions of a greenhouse gas emissions cap across key elements of the California economy. BEAR is the most sophisticated energy model of the California economy in use today. The model predicts economic benefits, largely because innovation and efficiency improvements - driven by climate policy - save money, allowing consumers to re-direct their spending from imported energy to in-state goods and services, providing new stimulus to the California economy.
Separately, UC economists have organized a letter to the legislature and Gov. Arnold Schwarzenegger urging state leaders to accelerate climate action. It calls emissions caps a "particularly potent strategy" and warns that "the most expensive things we can do is nothing." The Aug. 16 letter, updated from an earlier version sent to state officials on June 26, has now been signed by 60 Ph.D. economists from across California - including three Nobel Laureates.
"California's economy is vulnerable to climate impacts, but it can benefit from climate action," said Michael Hanemann, UC Berkeley professor of agricultural and resource economics and a lead signer of the economists' statement. "The economic evidence supports a cap on global warming emissions."
The full report and economists' letter are both available for viewing at: http://calclimate.berkeley.edu
Where's the
Aw Geez guy pic?
This whole article presupposes that there is one darned thing we can do that will effect climate one way or another.
wow....just, wow....
(shakes head grimly)
Yep, those buggy whip manufacturers are gearing up for production as we speak. Jobs galore!
Looks like yet another case of the broken window fallacy. The resources spent on state-mandated "innovation and efficiency improvements" would otherwise have been spent on more profitable endeavors.
Damn, you beat me to it. Broken Window was the first thing that popped into my mind when I read the title.
"climate policies are designed to create direct incentives for California companies to invest in new technology"
If these evil corporations would just stay put long enough to be forced into it, they mean. Look out Arizona, Idaho and Nevada, here comes another wave of economic refugees from California.
David Roland-Holst†
UC Berkeley
August 2006
† The author is Adjunct Professor of Agricultural and Resource Economics at UC Berkeley and Professor of Economics at Mills College. Financial support from the Energy Foundation is gratefully acknowledged. Thanks are also due Chris Busch, Alex Farrell, Michael Hanemann, Skip Laitner, Jason Mark, and Marcus Schneider for helpful insights and comments, and to Fredrich Kahrl for excellent research assistance. Opinions expressed here are the author’s and should not be attributed to his affiliated institutions.----------
The California economy has an enviable record of technological progress, and the challenge presented by climate change is a new opportunity for the state to demonstrate its talent for combining advances in public policy and private sector innovation to enhance environmental quality and economic growth.
This research note offers preliminary results on the link between greenhouse gas (GHG) abatement strategies and economic growth from on-going research with a forecasting model of the California economy. The Berkeley Energy and Resources (BEAR) model is a detailed empirical simulation tool that can evaluate the complex linkages between climate policy and economic activity. In the analysis presented here, eight targeted GHG emission policies are combined with an overall cap to meet the state’s targets for 2020. No specific implementation of the cap is assumed; these results can be interpreted as the result of an efficient combination of policies. Examining alternative scenarios for state climate policy over the next fifteen years, a few salient conclusions emerge:
1. California’s GHG targets are attainable, but too ambitious to be met by voluntary initiative. Policy action to meet the targets should be relatively inclusive, with mandatory participation by all sectors representing a significant share of emissions.----------2. An Emissions Cap, supported by regulatory and market-based implementation programs, can return California’s GHG emissions to 1990 levels by 2020 and stimulate the state economy.
3. Climate policies that create direct incentives for industries to invest in new technologies can provide additional stimulus for new employment and growth.
Table ES-1: Macroeconomic Impacts of 8 CAT policies plus a 2020 GHG Cap*
*(1990 GHG Emissions Levels by 2020)
Annual Impact 8 CAT policies + Cap 8 CAT policies + Cap
w/Innovation Incentives
Gross State Product (2006 dollars) +$60 Billion +$74 Billion
% change from 2020 baseline (+2.4%) (+3.1%)
Employment (thousands) +17 +89
% change from 2020 baseline (+.08%) (+0.44%)---------- The findings reported here indicate that California can establish global leadership in growth-oriented climate policy and energy innovation. Well-designed and implemented strategies can bring forth the state’s enormous innovation potential and apply it to one of the most compelling challenges of our era.
Notes on the policy scenarios and results:
The policy scenarios included here are designed to represent important elements of California’s climate action policies that are under development, including AB32 (“The California Global Warming Solutions Act”) as well as several Climate Action Team (CAT) measures. One of the key findings of this report is that regulatory and marketbased strategies are complementary; each excels at achieving different forms of mitigation. We show how all significant stationary source emitters could contribute to meeting the state’s reduction goals, either through inclusion in a cap, an offset mechanism, or through regulatory programs.
The analysis presented here is an update to a study released in January that concluded achieving half the 2020 targets would promote economic growth in California (Roland-Holst, 2006). This study extends the earlier work to meet all of the 2020 targets, and confirms the earlier conclusion about economic benefits.
The positive economic results are derived from two primary sources: savings from improvements in energy efficiency and reduced energy bills that offset the cost of achieving emission reductions and, in related policy scenarios, the benefits of investing in technologies for innovation. California has a long history of leadership in both of these areas, and continuing along these lines will yield positive economic and environmental benefits for the state.
While our results are encouraging, they may be overly conservative for several reasons. First, we do not consider spontaneous technological innovation in this version of the BEAR model, and only a few GHG mitigation technologies are represented explicitly, although these features will be added to later versions of the model. Second, only 8 of 34 Climate Action Team policies are modeled here, and several with significant mitigation potential are not considered. Including these would reduce the estimated mitigation burden and attendant costs for industries covered in this analysis. Third, the results consider only limited potential for technical and fuel substitution (e.g., the substitution of renewable energy sources for fossil fuel power plants). Finally, we do not allow for lower-cost reductions from offsets or links to other carbon regimes to replace reductions from the sources considered here.
Yeah. The other common form is "this pork-barrel project will create 50,000 jobs!".
I strongly support mandatory economics classes in high school.
I'm gonna make a wild generalization here and say that people who are on the global warming bandwagon make terrible financial advisors. They don't even know how to balance their checkbooks.
Once we've driven every business out of the state, we'll finally reach those goals. Can't wait!
how about pump out the oil and take the profits and create a new energy industry?
Create jobs and in the process convert to something cleaner? By 2020 they will be off petroleum, into something else and there will be jobs.
Then again a RAT will tax the company out of business.
If I can reduce my PG&E bill, I'll have more money for beer.
Sheesh, bwf was the first thing that crossed my mind as I read the headline. Great minds think alike eh? ;)
In short - Global warming good for liberals. Women and minorities helped most.
And California could create 50,000 new jobs if we hired 50,000 people. Heck, let's make it an even 100,000!
I appreciate the sentiment, but it probably won't happen. The extra taxes and higher costs taken on by businesses and consumers to meet these standards will likely even everything out, if not make it more expensive for you. That report would probably get shredded in peer review by disinterested economists.
Our greatest auto advancements in safety and emissions have come before the mandates. Honda was working on its CVCC before the strict 1970s emissions laws, the airbag was invented a long time before even seat belt laws were passed, and Bosch started working on ABS about 60 years before our government started requiring it in trucks (and I believe it will be mandatory in passenger cars in Europe soon, if not already).
These companies developed these technologies on their own and have made billions, furthering the economy. Libs just can't understand that concept.
At least one editorial writer (San Diego Union-Tribune) got it and took the time to read the report.
August 17, 2006
New hooey on emissions: The crusade continuesUC Berkeley researchers say capping greenhouse-gas emissions not only won't hurt the economy, it will be a tremendous boon, according to published reports based on their press release:
State laws requiring California companies to reduce greenhouse gas emissions to 1990 levels by the year 2020 would actually create as many as 17,000 new jobs, says a new University of California, Berkeley, report.It would boost the annual Gross State Product (GSP) by $60 billion, the report says.But look at the arguments in the report [PDF file]... and they're laughable:
The positive economic results are derived from two primary sources: savings from improvements in energy efficiency and reduced energy bills that offset the cost of achieving emission reductions and, in related policy scenarios, the benefits of investing in technologies for innovation.Got that? The theory that a hard cap on emissions will help the economy depends entirely on this development: Not only will technology readily yield new energy sources, but they will cost less than current sources.
Huh? We've been pursuing breakthroughs in energy since the first oil price shock in October 1973 with very mixed success. Now all of a sudden it gets easy?
What also stinks here is that one of the lead UC Berkeley academics involved in this study is Michael Hanemann. But he's no specialist in energy engineering or technology. He's just masquerading as one in service of his longstanding crusade to cap emissions by any means necessary.
But that won't matter to the governor or the greens or the Assembly speaker or all the journalists who have signed up for the crusade. Facts, schmacts. Not only will an emissions cap not hurt the economy, it will yield nirvana. Indeed, if we banned all emissions, no one would ever have to work again! It's that simple.
Give me a break. This study is a joke. Here's hoping someone in the media bothers to read the whole thing, not just the press release, and reaches the obvious conclusion about its (de)merits.
Posted by Chris Reed at August 17, 2006 02:57 PM | Send a comment
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