All eyes on California's AB 32

December 17, 2013 | By Barbara Vergetis Lundin

ICF International has released a report commissioned by the Energy Foundation comparing the economic impacts of different uses of proceeds from California's carbon emissions trading program under the state's 2006 climate law, AB 32. AB 32 has the potential to generate significant auction proceeds once the cap expands in 2015 to cover transportation fuels. ICF's analysis explores five options for reinvesting those proceeds back into California's economy and evaluates the relative economic impacts of each option.

"As other parts of the U.S. and the world contemplate comprehensive programs to reduce gases implicated in global climate change, all eyes are on California," said Jan Mazurek, Ph.D., senior fellow for ICF International, which is part of what makes the study so important.

The analysis projects that the potential best use of the proceeds may depend on the desired outcome as certain options result in better job creation while others lead to higher incomes. Investing in options that reduce greenhouse gas emissions, such as energy efficiency, can lead to high job growth. Distributing the funds as a per capita dividend can improve equity and raise income for California residents. The study projects that the most advantageous use of the auction proceeds could be a "blended" scenario combining multiple reinvestment options, which could improve jobs as well as incomes.

"As the economy bounces back from a deep recession, the issue of how best to use auction proceeds from a carbon policy has significant relevance not just for California, but for other jurisdictions as well," said Bansari Saha, Ph.D., senior manager at ICF International. "This study is one of a few empirical analyses that compares different options for using those proceeds and sheds light on important distributional implications of revenue recycling."

For more:
- download the report

http://www.fierceenergy.com/story/all-eyes-californias-ab-32/2013-12-17