Is California’s Environmental Policy Worth Fighting For?

California’s environmental policy has made headlines recently, with Gov. Arnold Schwarzenegger announcing that he plans to sue the federal government over its refusal to let the state enact its own plan to reduce greenhouse gas emissions, and instead adopt a more lax federal plan. While the E.P.A.’s regulation promises to increase fuel efficiency standards by 40 percent come 2020, the California plan would cut emissions from new vehicles by around 30 percent by 2016.

But from an economic standpoint, is Schwarzenegger’s move a good idea for the state? In their new working paper “Too Good to Be True? An Examination of Three Economic Assessments of California Climate Change Policy,” the economists Robert Stavins, Judson Jaffe, and Todd Schatzki examine California’s Global Warming Solutions Act of 2006, which purports to reduce the state’s total emissions by 25 percent, bringing emissions back to their 1990 level by 2020. The authors review in detail the studies used as justification for enacting the policy, all of which found that the state could meet its 2020 target at no net economic cost. Their conclusions are summarized as follows:

[A]lthough opportunities may exist for some no-cost emission reductions, these California studies substantially underestimate the cost of meeting California’s 2020 target…. by omitting important components of the costs of emission reduction efforts, and by overestimating offsetting savings that some of those efforts yield through improved energy efficiency. In some cases, the studies focus on the costs of particular actions to reduce emissions, but fail to consider the effectiveness and costs of policies that would be necessary to bring about such actions. While quantifying the full extent of the resulting cost underestimation is beyond the scope of our study, the underestimation is clearly economically significant. A few of the identified flaws individually lead to underestimation of annual costs on the order of billions of dollars.

Billions of dollars of underestimated costs is no small mistake (calling into question whether the initial researchers faced political pressure to deliver that “no net cost” verdict), and these results could mean serious repercussions for a state that’s already facing a looming fiscal crisis, not to mention the ongoing costs of recovery for the 2007 wildfires for both the federal and state government.

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  1. Ken says:

    Well, it does indeed seem that the scientific consensus is that the relevant desision to be taken is not IF to tackle climate change, but WHEN to tackle climate change – now, or later when it becomes a global crisis of increasingly massive proportion.

    Tackling global warming now may well be costly, and the political manipulation of reports to suggest zero net economic cost – if this indeed happened – is hardly desirable.

    But the crude fact remains: tackling global warming now is exponentially cheaper than tackling global warming later.

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  2. Ken says:

    Well, it does indeed seem that the scientific consensus is that the relevant desision to be taken is not IF to tackle climate change, but WHEN to tackle climate change – now, or later when it becomes a global crisis of increasingly massive proportion.

    Tackling global warming now may well be costly, and the political manipulation of reports to suggest zero net economic cost – if this indeed happened – is hardly desirable.

    But the crude fact remains: tackling global warming now is exponentially cheaper than tackling global warming later.

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  3. Gary says:

    Its all about incentives… in this case, the incentive being Arnold gets re-elected. Really its the politician’s perfect fight- even if he doesn’t win, he’s a hero for trying.

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  4. Gary says:

    Its all about incentives… in this case, the incentive being Arnold gets re-elected. Really its the politician’s perfect fight- even if he doesn’t win, he’s a hero for trying.

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  5. Justin says:

    There is not a scientific consensus about the human effects on global warming. There is only a media and celebrity consensus. It’s nothing more than an assumption that we have any capability to control a complex climate system that we do not fully understand in the first place. It’s a foolish and dangerous assumption at that, in my opinion.

    What will you say when we waste trillions of dollars trying to control the climate, only to have no effect, or even make it “worse”?

    See here for only one reference, and google for more:

    http://www.newsbusters.org/blogs/noel-sheppard/2007/12/20/senate-report-over-400-scientists-dispute-manmade-global-warming

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  6. Justin says:

    There is not a scientific consensus about the human effects on global warming. There is only a media and celebrity consensus. It’s nothing more than an assumption that we have any capability to control a complex climate system that we do not fully understand in the first place. It’s a foolish and dangerous assumption at that, in my opinion.

    What will you say when we waste trillions of dollars trying to control the climate, only to have no effect, or even make it “worse”?

    See here for only one reference, and google for more:

    http://www.newsbusters.org/blogs/noel-sheppard/2007/12/20/senate-report-over-400-scientists-dispute-manmade-global-warming

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  7. pentapod says:

    I moved to California (San Diego) in 2007 and prior to that I’d always had the impression it was a relatively environmentally friendly state. I’m amazed at how little is actually done for the environment. Most first world countries I’ve lived in (which is several) have at least a basic recycling program, recycle bins on the streets in main cities beside rubbish bins, door to door collection, etc. Not California! There are a limited number of recycling centers in San Diego that you have to deliver your own things to, waiting in long lines. The easiest, and most popular solution, is simply to throw out all the recyclables into the trash, and several scruffy probably homeless people come around and sort through my building’s dumpster on a daily basis looking for recyclables they can sell to the recycling centers. Since moving to California, my recycling program has been: put cans and bottles in separate bag beside dumpster so nice homeless people can make some change out of it.

    Compare this to a system like Ontario’s “Blue Box” program, where recyclables are collected several times a week, many areas even have compost collection in biodegradable bags. Compare to New South Wales, where every public rubbish bin has a separate recyclables section and every home has a recyclable bin beside the rubbish bin, collected weekly. In a supposedly progressive country and state, it’s shockingly backwards.

    With this complete lack of environmental programs in mind on the “street level” therefore it strikes me as ridiculous to be kicking up such a fuss and threatening to sue the government over greenhouse emissions policies, when there’s clearly so little interest in really doing the environmentally correct thing that a street level recycling program isn’t even available. I agree with Gary, it’s all about political posing and posturing, and nothing at all about really helping the environment. If it were, there’s plenty that could be done without focusing on this one issue.

    Blustering and threatening to sue the government on this one issue is just a great way of looking as if he’s concerned about the environment and looking as if he’s trying to do something, while in reality he’s simply distracting attention from the fact that many simple and obvious things that should have been done, and could be done without getting into an argument with federal policy, remain neglected and ignored.

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  8. pentapod says:

    I moved to California (San Diego) in 2007 and prior to that I’d always had the impression it was a relatively environmentally friendly state. I’m amazed at how little is actually done for the environment. Most first world countries I’ve lived in (which is several) have at least a basic recycling program, recycle bins on the streets in main cities beside rubbish bins, door to door collection, etc. Not California! There are a limited number of recycling centers in San Diego that you have to deliver your own things to, waiting in long lines. The easiest, and most popular solution, is simply to throw out all the recyclables into the trash, and several scruffy probably homeless people come around and sort through my building’s dumpster on a daily basis looking for recyclables they can sell to the recycling centers. Since moving to California, my recycling program has been: put cans and bottles in separate bag beside dumpster so nice homeless people can make some change out of it.

    Compare this to a system like Ontario’s “Blue Box” program, where recyclables are collected several times a week, many areas even have compost collection in biodegradable bags. Compare to New South Wales, where every public rubbish bin has a separate recyclables section and every home has a recyclable bin beside the rubbish bin, collected weekly. In a supposedly progressive country and state, it’s shockingly backwards.

    With this complete lack of environmental programs in mind on the “street level” therefore it strikes me as ridiculous to be kicking up such a fuss and threatening to sue the government over greenhouse emissions policies, when there’s clearly so little interest in really doing the environmentally correct thing that a street level recycling program isn’t even available. I agree with Gary, it’s all about political posing and posturing, and nothing at all about really helping the environment. If it were, there’s plenty that could be done without focusing on this one issue.

    Blustering and threatening to sue the government on this one issue is just a great way of looking as if he’s concerned about the environment and looking as if he’s trying to do something, while in reality he’s simply distracting attention from the fact that many simple and obvious things that should have been done, and could be done without getting into an argument with federal policy, remain neglected and ignored.

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