Critical findings The Fiscal and Economic Impact of the California - - PowerPoint PPT Presentation
Legislative Briefing Critical findings The Fiscal and Economic Impact of the California Global Warming Solutions Act (AB 32) Report conducted by Andrew Chang & Company for the California Manufacturers & Technology Association Download
The Fiscal and Economic Impact of the California Global Warming Solutions Act (AB 32)
Report conducted by Andrew Chang & Company for the California Manufacturers & Technology Association
Download report and materials at cmta.net
$300 $500 $700 $1,000 $1,200 $1,600 $2,000 $2,500
$100 $200 $300 $400 $400 $600 $700 $900
Key Observations
AB 32 will increase family costs for goods and services by over $2,500 in 2020. In addition, families will lose an average of $900 in wages from a slowing economy. In total, AB 32 will impose
difficulty on the average California family in 2020. This is equal to two and a half extra mortgage payments for the average family.
2012 2013 2014 2015 2016 2017 2018 2019 2020
$0
from increased energy and transit prices from lost earnings
$2,700 $2,100 $1,700 $1,400 $1,000 $700 $400
Source: Appendix A Notes: Based on average household
Minor discrepancies in #’s are the result of rounding
Total 2012-2020
2012 2013 2014 2015 2016 2017 2018 2019 2020
billion
2020
Source: Appendix A
Key Observations
AB 32 will eliminate 262,000 jobs by 2020 due to a slowing economy. The 2020 job loss is equivalent to the number
California’s semiconductor manufacturing and building construction industries combined. Annual job losses increase by an average
year.
Source: Appendix A
2012 2013 2014 2015 2016 2017 2018 2019 Lost jobs by 2020
Key Observations
Due to the slow down in economic activity, and lost earnings, AB 32 will reduce state and local tax revenues by
This is more than the state’s General Fund expenditures for higher education, labor and workforce development, natural resources, environmental protection and business, transportation and housing combined Cumulatively, this amounts to
local tax revenues. This is as much money as the state projects to spend on higher education between 2011 and 2016 In 2020 the annual revenue loss is increasing by approximately 40% per year
Source: Appendix A
billion
billion
2012 2013 2014 2015 2016 2017 2018 2019 2020
2012-2020
2007-09 2012-20 Great Recession GSP loss AB 32 GSP loss
Source: Appendix A
$90 billion $153 billion
Though the goals of AB 32 are ambitious, ARB’s programs to meet those goals will cause significant damage to California’s economy in a best case scenario and could devastate California’s economy in a worst, but not implausible, scenario. Even under our optimistic scenario, ARB’s programs as they are presently constructed will cause the loss of 5.6 percent of GSP and 262,000 jobs by 2020. Moreover, the programs will cost the average California family $3,400/year and lead to over $7 billion in lost state and local government revenues in 2020. ARB has been actively working to define its programs to implement the requirements of AB 32. However, ARB has not subsequently assessed the economic impact of the programs. ARB last completed a comprehensive review of AB 32 in 2010 utilizing assumptions and data from 2009. That study concluded that AB 32 would cost only $8 of lost GSP per ton of GHG
significantly higher and our study confirms this. Moreover, since ARB last conducted its study, there has been significant advancements in defining the AB 32 program, including more detail on the implementation program, more accurate data has become available and better information has become available regarding some of the market assumptions that ARB utilized in its study. Virtually every Californian will be impacted by AB 32. Because of the broad impact of AB 32 and because of the high technical nature of AB 32, ARB must work closely with all stakeholder groups and industry experts in order minimize the harm that AB 32 could have on California while maximizing potential benefits of the program. ARB is planning to hold its first auction this November which will make changing the program very difficult to achieve. The Legislature and the Administration must ask whether there are more cost-effective means to achieve the reductions in greenhouse gas emissions. The full report is located at cmta.net You can reach the report author Andrew Chang at 916-538-6091 You can reach CMTA’s Dorothy Rothrock at 916-498-3319 or Jack Stewart at 916-498-3324