Environmental Law

CA Economy, Health to Benefit from Greenhouse Gas Cuts -- Reports

By Dennis Pfaff and Kevin Livingston, Editors

California air regulators Wednesday issued two reports on the economic and health impacts of complying with the state's aggressive plans for cutting greenhouse gas emissions, suggesting both could benefit at least to some extent from the effort.

Mary Nichols, who chairs the California Air Resources Board, which is the state agency primarily in charge of directing the state's efforts to implement the 2006 law, AB 32, touted the documents in a  statement issued by the air agency:

“The facts are in. These reports support the conclusion that guiding California toward a clean energy future with reduced dependence on fossil fuels will grow our economy, improve public health, protect the environment and create a more secure future built on clean and sustainable technologies ."

The law sets a goal of reducing emissions of carbon dioxide and other heat-trapping gases to 1990 levels by 2020. That's the equivalent of about a 30 percent cut from what would be expected if nothing were done. The new reports analyze the measures outlined in a plan released in June to achieve that objective -- a draft blueprint that relies on a variety of mechanisms, including boosting renewable energy and reducing the use of fossil fuels. It also anticipates California's participation in a cap-and-trade program to set a price on emissions of heat-trapping gases. 

Among the key findings in the documents were that production activity would increase by $27 billion and California's gross state product would see a $4 billion increase over business-as-usual estimates. It also showed that individual incomes would rise modestly and more than 100,000 jobs could be created.

The economic report called the $27 billion "relatively minor" in the context of what is anticipated to be a $2.6 trillion economy by 2020 but noted the figure was still positive. It attributed some of the increase to investments in energy efficiency that more than pay back their costs at expected future prices.

In fact, the report said the economic benefits could be understated because economic models are unable to predict how companies might invest in energy efficiency technologies. It did predict, however, that output and employment could drop in the utility industry.

As for health, one of the documents released Wednesday predicted that the greenhouse emissions cuts would improve on existing air pollution programs and produce reductions in premature deaths, asthma and respiratory illnesses and lost work days.

The agency said it was hoping for public comments on the reports. Air pollution officials have until Jan. 1 to develop a final plan for implementing the law. 

Release of the report comes on the heels of state energy regulators putting forth their  proposed recommendations on how the utility industry can comply with the mandates of the law, including boosting the state's renewables portfolio standard. 

--Dennis Pfaff of Thelen LLP    

Full post as published by Climate Law Update on September 17, 2008 (boomark / email).