by Rebecca Walker — March 26, 2010—California’s landmark climate change law will likely have a modest impact on the state’s economy, a new analysis found, but will save the state billions of dollars in avoided fuel expenses.
The state’s Air Resources Board (CARB) released an updated study of the projected economic impacts from the Global Warming Solutions Act of 2006, also known as AB 32. It follows an earlier assessment panned by some as too optimistic.
The new analysis estimated 10,000 net jobs would be created in 2020 as a result of AB 32; the state is forecast to create roughly two million jobs in 2020, regardless of whether the law is implemented. AB 32 aims to reduce greenhouse gas emissions to 1990 levels by 2020.
The state would collectively spend about $3.8 billion less on gasoline and diesel fuels due to better efficiency, or 4.9 percent. Projected gross state product is forecast to grow to nearly $2.5 trillion, 2 percent less than if AB 32 was not implemented.
A 16-member panel of outside economists reviewed the findings and offered CARB counsel during their analysis. The analysis determined AB 32 will probably not have a significant effect on small businesses in the state but would impact some sectors more than others, particularly those in carbon-intensive industries.
CARB also concluded that failing to fully or successfully implement its Scoping Plan or restricting the use of carbon offsets would have more of a negative impact on the economy because of the missed energy savings and higher price tag for carbon allowances needed for a cap-and-trade program.
Meanwhile, the California Small Business Roundtable released a report conducted by the dean of Cal State Sacramento’s business school finding AB 32 would cost small businesses $50,000 a year, while also taking a $3,857 toll on each California household.
