California beats Washington on efforts to combat global warming

August 31, 2006

California has taken the lead on U.S. efforts to combat global warming with a landmark agreement between Republican Gov. Arnold Schwarzenegger and state Democrats on legislation that would require big cuts in carbon emissions. A law expected to pass California’s Democratic-controlled lower house today would cut carbon gas emissions to 1990 levels by 2020, a 25 percent reduction. Schwarzenegger, who faces a re-election campaign in the fall, announced yesterday that he would sign the law. (The San Francisco Chronicle offers a good summary.)Some media reports, including the LA Times tended toportray the outcome as victory for environmentalists over business interests. But a closer reading revealed a split between petroleum companies, which were strongly opposed, and other segments of the business community. Pacific Gas and Electric Co., the state’s leading utility company, supported the bill, arguing that it would be boon to the economy. Ditto for the Bay Area Council, a business group that includes the 275 largest employers in the San Francisco Bay Area.The view that cutting greenhouse gasses may actually be good for the economy gained further support from the timely release of a University of California at Berkeley study that used a sophisticated computer program—the Berkeley Energy and Resources (BEAR) model—to simulate linkages between climate policy and economic activity. The paper Economic Growth and Greenhouse Gas Mitigation in California (PDF) by David Roland-Holst, found that rolling back emissions to 1990 levels by 2020 would boost California’s annual Gross State Product (GSP) by $74 billion (more than 3% above the 2020 baseline GSP) and create 89,000 new jobs. (HT: Dropping Knowledge)All of this can only increase pressure on Washington to move towards reality-based climate policy. It can’t happen soon enough for poor people in developing countries, who consume much less energy than people in the rich world but would bear a disproportionate share of the costs of climate change.


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