IDEAS home Printed from https://ideas.repec.org/a/aen/eeepjl/eeep3_2_07rose.html
   My bibliography  Save this article

Macroeconomic Impacts of the California Global Warming Solutions Act on the Southern California Economy

Author

Listed:
  • Dan Wei and Adam Rose

Abstract

We evaluate the potential regional macroeconomic impacts of a set of ten greenhouse gas mitigation policy options intended to enable the Southern California Association of Governments to comply with the State's greenhouse gas reduction targets. The Regional Economic Models, Inc. Policy Insight Plus Model, was applied in the analysis by carefully linking technical and microeconomic aspects of each mitigation option to the workings of the regional economy. We took into account key considerations, such as how investment in mitigation options would displace ordinary private business investment and the time-phasing of renewable electricity generation. Our results indicate that the combined ten mitigation policy options could create an annual average employment gain of 21 thousand jobs over the entire planning period from now to 2035, but could also have a negative net present value impact of $17 billion in regional GDP. In the paper, we explain this and other anomalies. Sensitivity analyses of key assumptions and parameters for the Renewable Portfolio Standard indicate that the results are robust. They also provide policy-makers with insights into how to improve the macroeconomic impact of this major policy option.

Suggested Citation

  • Dan Wei and Adam Rose, 2014. "Macroeconomic Impacts of the California Global Warming Solutions Act on the Southern California Economy," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:eeepjl:eeep3_2_07rose
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/eeeparticle.aspx?id=70
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
    2. George I. Treyz & Dan S. Rickman & Gang Shao, 1991. "The REMI Economic-Demographic Forecasting and Simulation Model," International Regional Science Review, , vol. 14(3), pages 221-253, December.
    3. Kaufman, Noah & Palmer, Karen, 2010. "Energy-Efficiency Program Evaluations: Opportunities for Learning and Inputs to Incentive Mechanisms," RFF Working Paper Series dp-10-16, Resources for the Future.
    4. S J Rey, 1997. "Integrating Regional Econometric and Input—Output Models: An Evaluation of Embedding Strategies," Environment and Planning A, , vol. 29(6), pages 1057-1072, June.
    5. Jeffrey A. Kolb & Joel D. Scheraga, 1990. "Discounting the benefits and costs of environmental regulations," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 9(3), pages 381-390.
    6. Adam Rose & Noah Dormady, 2011. "A Meta-Analysis of the Economic Impacts of Climate Change Policy in the United States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 143-166.
    7. Wayne B. Gray & Ronald J. Shadbegian, 1998. "Environmental Regulation, Investment Timing, and Technology Choice," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 235-256, June.
    8. Adam Rose & Dan Wei, 2012. "Macroeconomic impacts of the Florida Energy and Climate Change Action Plan," Climate Policy, Taylor & Francis Journals, vol. 12(1), pages 50-69, January.
    9. Adam Rose & Dan Wei & Fynnwin Prager, 2012. "Distributional Impacts Of Greenhouse Gas Emissions Trading: Alternative Allocation And Recycling Strategies In California," Contemporary Economic Policy, Western Economic Association International, vol. 30(4), pages 603-617, October.
    10. Gray, Wayne B & Shadbegian, Ronald J, 1998. "Environmental Regulation, Investment Timing, and Technology Choice," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 235-256, June.
    11. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    12. S Cassing & F Giarratani, 1992. "An Evaluation of the REMI Model for the South Coast Air Quality Management District," Environment and Planning A, , vol. 24(11), pages 1549-1564, November.
    13. Sergio J. Rey, 1998. "The Performance of Alternative Integration Strategies for Combining Regional Econometric and Input-Output Models," International Regional Science Review, , vol. 21(1), pages 1-35, April.
    14. Adam Rose & Dan Wei & Noah Dormady, 2011. "Regional macroeconomic assessment of the Pennsylvania Climate Action Plan," Regional Science Policy & Practice, Wiley Blackwell, vol. 3(4), pages 357-379, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lawrence, Michael F. & Wei, Dan & Rose, Adam & Williamson, Scott & Cartwright-Smith, Devon, 2017. "Macroeconomic impacts of proposed climate change mitigation strategies for transportation in Southern California," Research in Transportation Economics, Elsevier, vol. 61(C), pages 56-69.
    2. Wei, Dan & Brugués, Alejandro & Rose, Adam & de la Parra, Carlos A. & García, Rigoberto & Martínez, Federico, 2017. "Climate change and the economy in Baja California: Assessment of macroeconomic impacts of the State's Climate Action Plan," Ecological Economics, Elsevier, vol. 131(C), pages 373-388.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lawrence, Michael F. & Wei, Dan & Rose, Adam & Williamson, Scott & Cartwright-Smith, Devon, 2017. "Macroeconomic impacts of proposed climate change mitigation strategies for transportation in Southern California," Research in Transportation Economics, Elsevier, vol. 61(C), pages 56-69.
    2. Adam Rose & Dan Wei & Noah Dormady, 2011. "Regional macroeconomic assessment of the Pennsylvania Climate Action Plan," Regional Science Policy & Practice, Wiley Blackwell, vol. 3(4), pages 357-379, November.
    3. Jonathan M. Lee, 2015. "The Impact of Heterogeneous NOx Regulations on Distributed Electricity Generation in U.S. Manufacturing," Working Papers 15-12, Center for Economic Studies, U.S. Census Bureau.
    4. Nelson, Hal T. & Rose, Adam & Wei, Dan & Peterson, Thomas & Wennberg, Jeffrey, 2015. "Intergovernmental climate change mitigation policies: theory and outcomes," Journal of Public Policy, Cambridge University Press, vol. 35(1), pages 97-136, April.
    5. Curtis, E. Mark & Lee, Jonathan M., 2019. "When do environmental regulations backfire? Onsite industrial electricity generation, energy efficiency and policy instruments," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 174-194.
    6. Francesco Vona & Francesco Nicolli & Lionel Nesta, 2012. "Determinants of renewable energy innovation: environmental policies vs. market regulation," Sciences Po publications 2012-05, Sciences Po.
    7. Yang Shen & Xiuwu Zhang, 2022. "Study on the Impact of Environmental Tax on Industrial Green Transformation," IJERPH, MDPI, vol. 19(24), pages 1-18, December.
    8. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    9. Zhang, Zibin & Yang, Wenxin & Ye, Jianliang, 2021. "Why sulfur dioxide emissions decline significantly from coal-fired power plants in China? Evidence from the desulfurated electricity pricing premium program," Energy Policy, Elsevier, vol. 148(PB).
    10. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09j0h0ji242 is not listed on IDEAS
    11. Long Chen & Nan Wang & Qiyun Li & Wenjun Zhou, 2023. "Environmental regulation, foreign direct investment and China’s economic development under the new normal: restrain or promote?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4195-4216, May.
    12. Stefan Ambec & Paul Lanoie, 2007. "When and Why Does It Pay To Be Green?," CIRANO Working Papers 2007s-20, CIRANO.
    13. Johan Brolund & Robert Lundmark, 2017. "Effect of Environmental Regulation Stringency on the Pulp and Paper Industry," Sustainability, MDPI, vol. 9(12), pages 1-16, December.
    14. Zhice Cheng & Xinyuan Chen & Huwei Wen, 2022. "How Does Environmental Protection Tax Affect Corporate Environmental Investment? Evidence from Chinese Listed Enterprises," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    15. Dana C. Andersen, 2016. "Credit Constraints, Technology Upgrading, and the Environment," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 283-319.
    16. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09j0h0ji242 is not listed on IDEAS
    17. Fan Wang & Lili Feng & Jin Li & Lin Wang, 2020. "Environmental Regulation, Tenure Length of Officials, and Green Innovation of Enterprises," IJERPH, MDPI, vol. 17(7), pages 1-16, March.
    18. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    19. Massimo Filippini & Lester C. Hunt, 2013. "'Underlying Energy Efficiency' in the US," CER-ETH Economics working paper series 13/181, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    20. Christopher Knittel & Shulamit Kahn, 2002. "The Impact of the Clean Air Act Amendments of 1990 on Electric Utilitiesand Coal Mines: Evidence from the Stock Market," Working Papers 528, University of California, Davis, Department of Economics.
    21. Shields, Martin & Deller, Steven C. & Stallmann, Judith I., 2001. "Comparing The Impacts Of Retiree Versus Working-Age Families On A Small Rural Region: An Application Of The Wisconsin Economic Impact Modeling System," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 30(1), pages 1-12, April.
    22. Francesco Crespi & Claudia Ghisetti & Francesco Quatraro, 2015. "Taxonomy of Implemented Policy Instruments to Foster the Production of Green Technologies and Improve Environmental and Economic Performance. WWWforEurope Working Paper No. 90," WIFO Studies, WIFO, number 58131, February.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:eeepjl:eeep3_2_07rose. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.