When we last left AB 32, California's equivalent of a full frontal assault on its own economy, the cap-and-trade system at the heart of its sweeping environmental regulations had been put on hold. This wasn't done out of concern over the economic suicide the law entails, but rather at the behest of environmental advocates who don't find cap-and-trade a sufficiently draconian way of reducing pollution. At the time, San Francisco Superior Court Judge Ernest Goldsmith ordered the Air Resources Board, which has been charged with implementing the system, to put implementation on hold in order to perform a more thorough review of alternatives. Well, KQED News is reporting that CARB's homework is now complete, and their analysis contains a startling result.
here. The interesting item comes before any of its analysis of alternatives is presented: in revisiting its calculations, CARB was able to adjust its predictions of future carbon emissions to account for the 2008-09 economic downturn. And according to its calculation, we're already halfway to getting emissions down to 1990 levels. The original analysis estimated that California's total greenhouse gas emissions would be 596 million metric tons of carbon dioxide equivalent (MMTCO2E), and that meeting the goal of 1990s-level GHGs by 2020 would require programs that cut emissions by 174 MMTCO2E. Yet their updated analysis estimates that 2020 emissions would now only total 506.8 MMTCO2E in the absence of AB 32. In other words, even without a cap-and-trade program, California is more than halfway to the goal it outlined in AB 32, and all it took was the collapse of the state's real estate market and construction sector, as well as persistent unemployment and endless job-killing regulation. Way to go, Golden State!
We've made the case before that AB 32's strangulation of economic growth in the state will have the effect of making it a rousing success. And it's nice to be partially vindicated by no less than CARB. There are, of course, many reasons to detest cap-and-trade: its "government command masquerading as an economic market" rationale and its enabling of classic rent-seeking behavior, to name two. But regardless of the mechanism CARB employs to achieve its GHG reductions, this analysis should underscore the reality of curbing one's carbon footprint: the only way to achieve it is by penalizing productive activity.