Here is an email I received from EDF:
Yesterday's passage of the Global Warming Solutions Act (AB 32) in California is an incredible achievement and gives huge momentum to our efforts to pass a national global warming cap.
The bill, co-authored by Environmental Defense, sets a statewide cap on global warming pollution and creates incentives for businesses and entrepreneurs to invest in clean energy technological innovations.
For more on how this law will work, listen to NPR's story featuring an interview with Environmental Defense's president Fred Krupp.
We also want to give you a sense of the dozens of Environmental Defense program staff members who worked around the clock to get this bill passed.
When you listen to the NPR story, make sure you notice how Fred Krupp dodges Melissa Block's question about the potential for increased costs with the GWSA (at 2.:15 into the story). Instead, Krupp chooses to describe the energy efficiencies that will be discovered with the regulatory incentive.
I don't buy into the idea that the GWSA will be costless. Nothing ever is, right?
Here is one back-of-the envelope estimate of the potential costs. From a previous post:
... cost estimates [of the Kyoto Protocol] range up to .54% of annual GDP (with global trading).
Since the GWSA sounds very similar to Kyoto (e.g., targets and trading), we can use this cost estimate, I think. According to the BEA, CA's gross state product is 1,621,843 million and .54% is $8758 million.
In other words, the CA GWSA might cost 8,758,000,000, almost $9 billion, annually. Are there $9 billion in new products and energy efficiencies out there?
On the other hand, an article in the NYTimes* (Select-$$$) says that the currently undiscovered energy efficiencies are huge:
But the backers of the law said that developing new energy sources and emphasizing efficiency would actually help expand California’s economy.
They cited a recently published study by researchers from the University of California**, Berkeley, which argued that cutting carbon emissions back to 1990 levels would add $74 billion in value, or 3 percent, and contribute to the creation of 89,000 jobs.
I have no idea if these numbers are annual or present value or what, 3% of what? But, $74 billion is big annually -- 4.6% of CA's annual GSP. That is an unbelievably big number, don't you think? Maybe it should be the present value of the future stream of currently undiscovered energy efficiencies?
By the way, $74 billion and 89 thousand jobs amounts to $831 thousand per job. Sweet! Where can I sign up?***
Notes:
*To the right is the picture that accompanies the article (click on the thumbnail). The caption says "Emissions from installations like this Chevron refinery in El Segundo, near Los Angeles, might be susceptible to 25 percent curbs by 2020."
**Does anyone know where one might find this study?
***My math is usually wrong. The inevitable mea culpa should appear very soon.
