20 Dec 2008

CARB Takes Criticism Well

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Here is my Townhall column explaining how the California Air Resources Board (CARB) ignored scathing peer reviews of its economic analysis, and voted unanimously to go forward with the statewide cap-and-trade program (and other goodies) contained in AB 32, aka “The Global Warming Solutions Act of 2006.” (So now we can stop worrying about global warming.) Excerpt:

The fallacy in CARB’s reasoning is easy to spot. Right now there is nothing preventing businesses from lowering their emissions, and consumers right now are able to adopt the “efficiency” measures that would allegedly save them so much money. And yet, CARB would have us believe that the private sector is so incredibly shortsighted (or just hates the planet that much), that the California politicians have no choice but to force their constituents to become richer.

Outside experts—some of whom were explicitly invited by CARB itself to provide comments—have agreed with my harsh assessment….[For example, consider] the remarks of Harvard’s Director of Environmental Economics Program, Robert Stavins. Now let’s be clear, this guy is no Rush Limbaugh ditto-head. He has been a lead author for the Intergovernmental Panel on Climate Change (IPCC), and was Chairman of the EPA’s Economic Environmental Advisory Committee—a post to which he was initially appointed during the Clinton years. So this professor is no “denier.” Yet here’s what he had to say about CARB’s rosy predictions:

I have come to the inescapable conclusion that the economic analysis is terribly deficient in critical ways and should not be used by the State government or the public for the purpose of assessing the likely costs of CARB’s plans. I say this with some sadness, because I was hopeful that CARB would produce sensible policy proposals analyzed with sound scientific and economic analysis.

Although readers know my views about cap-and-trade programs, that’s not why I wrote about this episode. It is truly shocking how crazy CARB’s economic analysis was. If you want to take the IPCC science and make a case for a carbon tax or cap-and-trade, you can certainly do so; William Nordhaus makes a strong case [pdf], for example.

But that’s not what CARB did; instead they claimed that setting an aggressive emissions target would boost the California economy. I’m just speculating, but I bet higher-ups told the economists something like, “With the recession and huge budget deficit, there’s no way this is going through if we report that it will kill jobs and tax revenue. So you come up with a way that AB 32 boosts the economy.”

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