LAO Conducts Analysis of the Cost Impact of AB32
May 24, 2010
The non-partisan Legislative Analyst’s Office (LAO) conducted a qualitative analysis of the costs of AB 32 at the request of Assembly Member Logue. Attached is their analysis. Specifically, the LAO found:
- California’s economy at large will likely be adversely affected in the near term by implementing climate-related policies that are not adopted elsewhere.
- These adverse effects will occur in large part through economic leakage, as certain economic activity locates or relocates outside of California where regulated-related costs are lower.
- While it is true that there will be both winners and losers under the SP, including gains in so-called “green” jobs, the net economy-wide impact in the near term of implementing the SP in the absence of like policies in place elsewhere will in all likelihood be negative.
- Quantifying the net impact of the above factors on leakage is not possible, for a variety of reasons.
