Flawed report ignores costs of inaction and huge savings potential from energy efficiency


Jasmin Ansar, PhD: Economist, Union of Concerned Scientists: 510-809-1570
Chris Busch, PhD: Economist, Center for Resource Solutions: 415-568-4284
James Fine, PhD:  Economist, Environmental Defense Fund: 916-492-4698
Kristin Grenfell, Legal Director, Western Energy & Climate Projects, Natural Resources Defense Council: 415-875-6165

Bay Area, CA (July 13, 2009) — A report was issued today by Varshney & Associates purporting to show the economic impact of AB 32 on California small businesses. In response are statements from leading economists and climate experts at four non-profit organizations:

"The study by Varshney and Associates is fundamentally flawed. It takes into account the costs associated with implementing solutions to global warming, while completely ignoring the immense savings that also accrue from reducing global warming pollution," said Jasmin Ansar, a climate economist with the Union of Concerned Scientists. "This report does a disservice to California small business owners, who could actually benefit greatly from AB 32 and increase their competitiveness."

"The report's authors assess estimated costs of implementing AB 32 - $25 billion - but willfully ignore AB 32's associated savings of more than $40 billion. California knows the value of energy efficiency," said Chris Busch, an economist and Policy Director for Center for Resource Solutions. "This report should be seen by policymakers and the public for what it is-one more effort to confuse the issue and induce delay."

"The authors use a static economic model incapable of representing the massive benefits from technological innovation, energy security and improved efficiency that will be sparked by AB 32. In addition, the authors fail to consider the enormous economic value of avoiding the most extreme and costly effects of global warming," said James Fine, an economist with Environmental Defense Fund.

"Energy efficiency is one of the most important tools we have to reduce global warming and recharge our state's economy. California's climate plan will help individuals, small businesses, and the economy by creating jobs, reducing energy consumption and saving money in utility bills," said Kristin Grenfell, Legal Director for Western Energy & Climate Projects at the Natural Resources Defense Council.


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