California Called Out on Bogus Economic Analysis

California Governor Arnold Schwarzenegger is the world’s biggest proponent of a ridiculous school of economics that posits “doing something” about climate change is going to make everyone rich.

As proof of this claim, Schwarzenegger references an economic impact study released in September by the California Air Resources Board. The study claims that California’s landmark climate change bill, AB 32, would simultaneously grow the economy while it reduced emissions to 1990 levels by 2020.

The study was open to peer review, and yesterday those the peer review comments were published. I have yet to read them, but Debra Kahn of Climate Wire reports that they are a powerful indictment of CARB’s economic voo-doo.

A few quotes will suffice:

"Unfortunately, the Economic Analysis Supplement, in its current form, gives the appearance of justifying the chosen package of regulatory measures rather than evaluating it or looking at policy options," wrote Janet Peace and Liwayway Adkins of the Pew Center on Global Climate Change.

Harvard’s Robert Stavins wrote, "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."

Matthew Kahn, an economics professor at UCLA wrote, "While I support the governor's broad AB 32 goals, I am troubled by the economic modeling analysis that I have been asked to read. AB32 is presented as a riskless 'free lunch' for Californians."