Draft report's numbers on AB 32 add up to benefits to California's economy, not costs

Friday’s editorial, “Green Fantasies,” picked some numbers out of a draft report related to AB 32, but then mistakenly called those numbers “costs,” rather than the boon to California’s economy that they really will be.  ARB’s Economic and Allocation Advisory Committee estimates that the value of allowances in a California cap-and-trade program will add up to about $48 to $143 billion between 2012 and 2020. The report’s other 60 pages are all about how to use this money to the benefit of California. The expert committee is weighing the options of investing the money in key areas such as energy efficiency, land use planning, public transit, assistance for disadvantaged communities, or giving it back to Californians in the form of a tax rebate or dividend check.

Not only do the very numbers the editorial cites as a “cost” actually turn out to be an economic boon for California, but AB 32 will help the economy in another way: by creating green jobs. A new study counted 159,000 new green jobs in California – everything from scientists devising new fuels and better solar panels to workers insulating buildings to cut energy use. With a median annual income ranging from $21,000 to more than $130,000, these much needed jobs will help recharge California’s economy.

The dollar amounts identified in the draft report are not “costs” because the money won’t just disappear into thin air – it will come back to Californians and to the California economy.  In addition, California’s efforts to curb global warming are resulting in other benefits to the economy – such as new jobs as a result in investments in energy efficiency and clean technologies – that are not counted in the draft report. 

It is nice to be able to add up the numbers in a table in a draft report. It is more important to understand what those numbers mean. In this case: a multi-billion dollar jump start to California’s economy.