Will Stricter Climate Change Rules in 2017 Propel or Choke the California Economy?


by Leanna Sweha

At a recent meeting of the American Geophysical Union, Governor Brown called on climate scientists to tell the truth in the face of “climate deniers, big oil and big financial structures at odds with the survivability of the world.”

He defended California’s leadership in reducing greenhouse gas (GHG) emissions: “We have the laws, we have the tools of enforcement, and we have the political will…And whatever Washington thinks they’re doing, California is the future!”

California has the most aggressive climate change laws in the nation, and they have just become more aggressive.  But the question remains whether Californians have the political will to withstand the likely negative impact these new laws will have on their wallets.

Most everyone is familiar by now with the California Global Warming Solutions Act (AB 32), signed by Arnold Schwarzenegger in 2006.  It requires state GHG emissions to decline to 1990 levels by 2020.

In September, Brown signed SB 32, which requires state GHG emissions to decrease 40 percent below 1990 levels by 2030.  SB 32 went into effect on 1 January.

For perspective, to meet the 2020 goal, emissions must decrease 15 percent below “business as usual” levels (ie. without AB 32).  To meet the 2030 goal, emissions will need to drop to half of the “business as usual” levels.  This as population is expected to grow by another 4 to 5 million.

Both Brown and Schwarzenegger claim that state climate policy benefits the economy.  At a 10-year anniversary celebration of AB 32, Schwarzenegger said that leaders from all over the world are jealous of what California has accomplished. “We are a perfect example that you can protect the environment and grow economy simultaneously,” he said.

However, prominent energy market experts do not think the verdict is in yet.

Environmental economist Charles Kolstad of Stanford, who is a part of the UN Intergovernmental Panel on Climate Change and advisor to the state on AB 32, told Politifact that it may take another ten years to tell if climate change rules have helped or hurt the state economy.

More concerning are expert opinions like that of James Sweeney, Director or Standford’s Precourt Energy Efficiency Center.  He recently told the LA Times, “It is dubious as to whether the [2030] California goal will be achieved without large economic costs.”

The California Air Resources Board (ARB), the agency that administers state climate law, has been busy on its 2030 Scoping Plan.  This is the blueprint to meet SB 32 that ARB and other state agencies will adopt as regulations, incentives and other programs.  The final plan is scheduled to come out this month.

Last summer, a Public Policy Institute survey concluded that Californians are willing to pay higher energy prices to achieve the 2030 goals.  But polls and surveys have limited value, as we learned from the presidential election.

So will Californians get behind the governor and the stricter rules experts say are necessary to avoid catastrophic climate change?

We will follow the rollout of new climate rules and their economic impact through 2017.  This promises to be an interesting ride.


About The Author

Related posts

11 thoughts on “Will Stricter Climate Change Rules in 2017 Propel or Choke the California Economy?”

  1. Tia Will


    Thanks for the clear presentation of a seeming dichotomy. Some have framed this issue as a trade off of economic well being vs environmental well being. I see it differently. I see environmental well being and healthy living as “must have’s”while ever increasing possessions, toys and luxury activities are “nice to haves”. If by economic well being we mean enough for everyone to live on, then I would agree that this also is a “must have”. But if by economic well being we mean endless consumption of things that no one “needs” but which many want, then perhaps economic well being and environmental well being are in opposition.

    If this is the case, there are two roads that we still could pursue in an environmentally sound manner. We could choose to buy and consume less which would require a reframing of the “American Dream” of ever more material wealth for each succeeding generation. Or we could become ever more rapid adaptors of clean technologies such as wind and solar power, shared transportation, and healthy lifestyles thus preventing the need for ever more costly and technical medical care.

    We have some very important choices to make in the next few years and these will indeed be interesting times.

  2. Leanna Sweha Post author


    Thanks for your comments here.  I think the issue is whether the rules will force adoption of technology that is perhaps not ready for commercialization or is simply too expensive for businesses, which will in turn cause the cost of everyday needs to increase.  Not so much “nice to haves” but “must haves,” like food, transportation and shelter.

  3. Tia Will

    simply too expensive for businesses,”

    I think that there is a disparity here. I do not doubt that regulations can have major deleterious effects on small businesses. I also believe that very large businesses such as major communications firms, major oil companies and retailers ( Wal mart as an example) would not be substantially harmed by sensible regulation, but have the desire to maintain the unreasonably disparate incomes of their owners, managers and investors as opposed to their actual workers.

    I think that we too often confuse the impacts of regulation on “businesses” when we fail to differentiate the impacts by business type or size.

  4. Robert Canning

    I’m curious about how the new rule changes and goals set by the air and energy boards will “propel” the California economy. You set up the dichotomy but only really present the “choke” side.  The LA Times article you link to cites a range of 25-100K job losses (that’s a huge range – showing how much error there is in the models used) – are these “net” losses or are they estimates that do not take into account the job creation of the industries that are needed to achieve the goals set by the state.

    Thanks for bringing this to the Vanguard.  There should be more articles like this one.

  5. Jaroslaw Waszczuk

    This is what we need in America and California  to protect the environment and grow economy simultaneously
    The global leader in high speed rail, Siemens is committed to helping the U.S. build a 21st Century rail network that will revitalize city centers, create jobs and stimulate economic development while safeguarding the environment for future generations.
    With more than 500 trains operating in nine countries on two continents, the Siemens Velaro high-speed train is the world’s fastest series-produced train, operating at speeds up to 220 miles per hour. WITH A FUEL CONSUMPTION OF NEARLY 700 MILES PER GALLON PER PASSENGER SEAT, THE VELARO IS ALSO ONE OF THE MOST ENERGY EFFICIENT HIGH-SPEED TRAINS ON THE MARKET TODAY. Innovative and adaptable, the Velaro is the perfect fit for America’s future high-speed rail network, capable of being manufactured right in our Sacramento, California plant.
    Safe. American-made. Superfast. Sustainable.

  6. Jaroslaw Waszczuk

    To meet the 2030 goal, emissions will need to drop to half of the “business as usual” levels.  This as population is expected to grow by another 4 to 5 million.

    Population and Energy Consumption

    The population problem isn’t just a matter of the number of people. People consume food, fresh water, wood, minerals, and energy as we go about our daily lives. And producing food, pumping groundwater, harvesting wood, mining minerals, and burning fuel all deplete our resource base and produce pollution.
    Americans make up only 4.5% of the world’s population and yet consume nearly 20% of its energy! In fact, on average, every time an American spends a dollar, the energy equivalent of a cup of oil is used to produce what that dollar buys! 

  7. Tia Will

    Well spoken Jerry.

    High speed transportation and less consumption of unnecessary luxuries would go a long way towards meeting environmental goals. I believe that it would be better to do this voluntarily now rather than through force either by true scarcity or by governmental dictate in the future.

      1. Howard P

        As would computers, cell phones, TV, radio, movies, restaurants, private pools, paintings/art, etc., etc.,

        Am not disagreeing with you Alan… one person’s “need” may well be a “luxury”, or a ‘want to have’…

    1. Jaroslaw Waszczuk


      With 220 mph  train  you could live in Sacramento and work in Bakersfield or LA and vice versa   Reduction   the cars congestion on the freeways and reduction of  pollution related to would significant. The high  speed public transportation should be  a priority  for the California government and  the legislature.  The battle to build  the high speed rail is going on for at least 10 years.  This congestion on the freeways is not the only one of the major  problems  with GHG emission.  The farmers’ds  produced biomass as a byproduct is another major problem to utilize it instead of burning it on the open fields.  With the  California electric market deregulation and the new environmental laws the power utilities companies like PG&E  or  the San Diego Gas and Electric choosing not to renew contracts with biomass or solid fuel  power plants. The plants closing as a result, fewer facilities remain to process orchard waste and other biomass—leaving growers looking for solutions which so far is  burning waste on the open fields with uncontrolled GHG emission 

      The development of biomass energy in California was stimulated by the Biomass Development Program, which provided long-term support, funding or seed money, according to the California Energy Commission. The commission cited expiration of government price support to the biomass sector as the main reason for a reduction in biomass power generation in California, which peaked at 800 megawatts in the early 1990s.The California Biomass Energy Alliance points to environmental benefits of biomass such as reducing carbon emissions, diverting waste from landfills and reducing the demand for fossil fuels as reasons for maintaining the plants’ viability. According to the alliance, California biomass plants dispose of an estimated 8 million tons of waste per year and cut carbon dioxide emissions by 1.5 million to 3.5 million tons annually. Together, the plants produce 565 MW of electricity, enough to power more than 420,000 homes.

      One of example how the new environmental law works for PG&E by terminating power sale agreement with one of the  solid fuel co-generation power plant.

       This decision also authorizes PG&E to count, subject to verification by the Commission’s Energy Division, the 98,146 metric tons carbon dioxide equivalent of greenhouse gas emissions (GHG) reductions resulting from the Termination Agreement toward PG&E’s Combined Heat and Power Procurement (CHP) GHG emissions reduction targets pursuant to the Qualifying Facilities/CHP Settlement Agreement approved by the Commission in Decision 10-12-035.

      Decision 15-02-019 February 12, 2015
      This proceeding is closed.

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
Sign up for