Will cutting carbon kill jobs in California? That's the premise of a November ballot initiative proposed by Republican lawmakers, whose cause got a boost this week from a report by the nonpartisan Legislative Analyst's Office that concluded the state's landmark global warming law might hurt employment. The report made headlines because it contrasts sharply with an earlier analysis by the California Air Resources Board, which concluded that the law, AB 32, would actually create 120,000 jobs by 2020. So which agency is right? And does it matter?
The air board's study was based on a sophisticated computer model that's often used in economic forecasting, but some academics consider it unreliable. The Legislative Analyst's Office is among the skeptics, arguing in its report that there are too many uncertainties involved in such modeling for accurate predictions. Despite those uncertainties, and without citing much in the way of evidence, the office said that "it seems most likely to us" that AB 32 will lead to short-term job losses. The cuts would be small in relation to the state's overall economy, it concluded, and it declined to hazard a guess on the long-term effects.
The Legislative Analyst's Office is right about one thing: It's almost impossible to predict what's going to happen to the economy a decade down the road. Advocates on both sides of the climate-change debate tend to cite figures that are based on highly suspicious studies, with conservatives generally exaggerating the economic costs and environmentalists downplaying them. What's certain is that curbs on emissions will produce winners and losers. Polluting industries will face higher expenses and will doubtless cut jobs, while new "green" industries will emerge to replace them. Energy costs will rise but energy efficiency will improve.