Letter

LAO's Critique of the AB 32 Scoping Plan Economic Analysis

November 21, 2008

 


We were asked to report on the draft scoping plan of the Air Resources Board (ARB) for implementation of the Global Warming Solutions Act of 2006 (Chapter 488, Statutes of 2006 [AB 32, Núñez]). We conclude that (1) the scoping plan’s overall emissions reductions and purported net economic benefit are highly reliant on one measure—the Pavley regulations, (2) the plan’s evaluation of the costs and savings of some recommended measures is inconsistent and incomplete, (3) Macroeconomic modeling results show a slight net economic benefit to the plan, but ARB failed to demonstrate the analytical rigor of its findings, (4) economic analysis played a limited role in development of scoping plan, and (5) despite its prediction of eventual net economic benefit, the scoping plan fails to lay out an investment pathway to reach its goals for GHG emissions levels in 2020.