How to choke California's economy
Two recent studies have confirmed what the Register's Editorial Board has warned since 2006 – California's Global Warming Solutions Act will have devastating effects on the state's economy, and even be counterproductive in its goal to reduce greenhouse gas emissions.
It was a big red flag when the California Air Resources Board, which enforces the law, estimated in 2010 that it would reduce the state's economic output by 0.2 percent. It should have raised more eyebrows than it did when bureaucrats and regulators tasked with putting the best face on its consequences admitted it will have a negative economic effect.
Now, separate studies by the Boston Consulting Group and the California Manufacturers & Technology Association conclude the economic harm will be staggering from enforcement of the act, also known as Assembly Bill 32.
A study by Andrew Chang & Co. for the manufacturers and technology trade group concludes the cumulative cost to consumers will be $136 billion by 2020. The average family in 2020 will pay an extra $2,500 in added energy prices alone. The gross state product – California's version of the gross domestic produce – will be reduced $153 billion by that date, about the same economic hit California experienced in the 2007-09 recession.
These projections come from the study's "optimistic" scenario that assumes a lower increase in fuel prices and greater increase in vehicle fuel efficiency. It could cost families up to $4,500 a year.
Another study, by the Boston Consulting Group for the Western States Petroleum Association, found the regulatory impact could increase gasoline prices $2.70 per gallon and as many as 51,000 jobs could be lost with closure of up to six oil refineries.