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California energy: Evaluate how it all works together and grow our economy

Posted by Gino DiCaro, VP, Communications on Feb. 27, 2014

Manufacturers can help the state meet its bold environmental goals if regulations are cost-effective and technologically feasible. We are fighting for these principles to apply in the effort to reduce greenhouse gas emissions to meet the current target in 2020. Now the state is beginning to discuss very aggressive “near-zero emission” targets beyond 2020 on the road to 2050. The more stringent the targets, the more difficult it will be to manage costs through installation of available technology. Unrealistic goals would impact every part of the economy, cost hundreds of billions of dollars in private and public money, and hurt the California manufacturing sector that now employs 1.3 million workers.

This week economist Dr. Robert Stavins of Harvard University made the rounds in Sacramento to encourage lawmakers to include the following criteria in development of polices for California's post-2020 climate change endeavors:

1. Medium term target: Maintain flexibility to adjust to new information about benefits, costs and scope of action by other nations/states.

2. Make target conditional on action by other nations/states: Create incentives for other nations/states to take action, and avoid outcomes in which California incurs costs without any real environmental benefits.

3. Cost-effective policies: Increase reliance on cap and trade. Other complementary policies increase costs while producing no net emission reductions.

4. Linkages with other countries: Can promote broader agreement by lowering costs and providing mechanism for equalizing burdens.

5. Incentives for innovation: New technologies needed to lower costs for California and other countries.

6. Leakage risks: Ultimately need all key countries on board and leakage of emissions and economic growth will persist so long as differences in policy stringency exist.

7. Cost-containment elements: Will become more, not less, important as we move past 2020.

Link to Dr. Stavins' three-pager


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