The Attack on California's Climate Law: Economic Fear-Mongering or Legitimate Concern?

Even as environmental activists are still licking their wounds after failing to convince the U.S. Senate to pass a climate bill before the August recess, opponents of a legislative response to global warming have moved on to their next target. This time, however, they’re not just working to stop new legislation from being enacted. Instead, they’re trying to undermine an existing state law, The California Global Warming Solutions Act of 2006. This law, which is also known as AB 32, aims to combat global warming through a range of programs that includes cap-and-trade, a renewable electricity standard, and green building projects. The campaign against AB 32 argues that the people of California can’t afford to pay the costs of leading the nation toward a clean energy future. But is this assertion legitimate, or does it exploit the economic fears of a state whose unemployment rate is the third highest in the nation?

Surely the state’s clean technology businesses will benefit from AB 32, but can these gains offset the statewide economic burdens that come with increased energy regulation? According to an analysis
conducted by California’s Air Resources Board with input from an independent committee of “top economists, financial and business leaders, and policy experts,” the answer seems to be yes. Increases in energy costs would be offset by efficiency measures that would decrease energy consumption. Likewise, despite challenges for individual businesses, “the overall rate of California’s economic growth will be virtually unchanged.”

So, which is it? Economic fear-mongering or realistic concern with the growing pains AB 32 could produce? Do our friends in California have any personal insight about ways in which the law will affect them?

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