The Texas-based oil funded campaign to suspend AB 32 has been claiming that AB 32 will hurt the economy.  However, the LAO says that the single study that the pro-pollution campaign relies on to bolster this claim has “major problems involving both data, methodology, and analysis.”  The LAO is the latest in a line of economists to shred the Varshney study.

• Stanford Professor James Sweeney concluded the Varshney report’s “estimates are highly biased, are based on poor logic and unsound economic analysis.”
•  Chris Thornberg and Jon Haveman, founding principals of Beacon Economics, said the report was “one of the worst examples of schlock science we’ve ever seen.”
• Dr. Frank Ackerman of Tufts University also completed an analysis, finding the Varshney and Associates study to be “deeply flawed and shoddy economic analysis.”
• Matthew Kahn of UCLA echoed such criticism: “(their) cost estimates are fatally flawed and vastly over-state the expected costs of compliance with AB 32.”

On the other hand, many studies have shown the benefits of implementing AB 32:

• Dr. Chris Busch, Center for Resource Solutions (12-09) – Found that the consensus among economists who have looked at AB 32 is that tackling climate and a growing the economy are not mutually exclusive, but complimentary.
• Next 10/Collaborative Economics (12-09) –   Since 2005 alone, green jobs have grown 10% in California, while statewide job growth was only 1%.
•  The Pew Charitable Trusts (6-09) –   California already has the most clean energy jobs in the nation.  As of 2007, California had 10,209 clean energy businesses, directly employing 125,390 Californians.  AB 32 will assure that even more jobs are created. 
• Prof. Roland-Host, UC Berkeley/Next 10 (10-09) – Failing to implement AB 32 will harm California’s economy.  Absent AB 32-induced savings, increased fossil fuels prices will shrink California’s economy by over $80 billion and result in more than half a million fewer jobs by 2020.
• Brattle Group/UCS (12-09) – AB 32 will not harm small businesses.  Even in an “Extreme Case” scenario, designed to unrealistically over-estimate AB 32’s costs and show a 28% increase in energy prices, expenditures for the average small business would increase only 0.4%.
• Roland-Holst & Frederich Kahrl, UC Berkeley/Next 10 (11-08) – California’s quality of life, natural environment, and economic health are all at risk from global warming.  In the real estate market alone, $2.5 trillion of the state’s $4 trillion in property assets risk damage or destruction from global warming.

The message from the LAO and others is clear: Valero and Varshney need to get their facts straight.