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Top Economists Agree: Don't Block AB 32

Postponing the implementation of California's fossil fuels reduction law makes it impossible to meet the state's pollution reduction goals, and won't save money or jobs.
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A brewing battle in California over fossil fuel dependence has far-reaching implications. What's at risk? A lot: America's efforts to control air pollution, to promote energy efficiency, to end our dependence on imported fossil fuels and our vulnerability to volatile oil prices, to raise America's global competitiveness, and to promote job growth in the green business sector.

More than 100 Ph.D. economists with expertise in California energy and climate issues joined a growing chorus of supporter for the state's energy and climate security law. We released an open letter warning against any delay in the implementation of California clean energy policies. The letter, organized by the Union of Concerned Scientists, features a broad array of leading economists who disagree with those who want to stop implementation of pollution reduction policies. "Delaying action now," the letter states, "will be more costly than initiating action now."

In 2006, the California Legislature enacted the California Global Warming Solutions Act, requiring California to reduce its global warming pollution to the1990 level by 2020, a reduction of roughly 12 percent. The state is now poised to implement clean energy policies that will result in more energy-efficient homes, buildings and vehicles; cleaner transportation fuels; increased reliance on clean, renewable energy; and reductions in carbon pollution. This is a balanced and prudent approach. It covers all sectors of the economy and all sources in a fair and balanced manner. While the price of energy may rise moderately, firms and households in California will be able to lower their energy bill through new, clean technologies and improved energy efficiency which are specifically targeted in the state's implementation plan.

Postponing the implementation of California's law makes it impossible to meet the state's pollution reduction goals, and won't save money or jobs. The state's implementation plan creates a level playing field. The attack on the implementation undermines this, and benefits some special interests while imposing a greater burden on local governments struggling to achieve clean air standards. Attacks on the law are being bankrolled by some of the oil companies that benefit from our dependence on dirty energy and by some polluters who want to make others pay for their pollution.

China understands that the world is moving to clean energy, which is why China is investing billions of dollars in clean energy technology. They want to own the future trillion-dollar global clean energy market. California's clean energy policies have us well positioned to lead - but not if we slow or stall them. California's clean energy policies make our workers and businesses more competitive while cleaning up pollution at the same time.

I joined 117 other economists to urge support for implementing clean energy policies, stating that these policies can "stimulate innovation and efficiency," "help the state become a technological leader in the global marketplace," "improve our energy security, create new business opportunities and more jobs," and "provide immediate benefits to the health and welfare of residents by reducing local pollutants."

The letter is a warning - that delay is costly, and in fact the most expensive thing we can be doing now is sticking with the status quo. I hope this warning is heeded.

Michael Hanemann is professor of agricultural and resource economics at the University of California, Berkeley, and co-director of UC Berkeley's Climate and Energy Policy Institute.

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