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Arguing With Ghosts

by Frank Ackerman • October 29, 2010 @ 9:20 am

Real Climate Economics blogger Frank Ackerman has a great piece on Grist on the battle to save California’s landmark energy and climate legislation.

In this year’s election season, let me tell you what makes me mad as hell. I’m outraged at the idea of a law that would make you pay for home energy-efficiency improvements and a new energy-efficient car — but wouldn’t let you save money on either electricity or gasoline.

Here’s the amazing fact, though: There is no such law. Yet if you’ve been watching the fight to stall or overturn California’s climate law, AB 32, you might very well think there is, because that’s how opponents have presented it.

The real-life AB 32 calls for gradually rising standards for energy efficiency — but you get to keep every penny you save by reducing your energy bills. Thanks to that common-sense feature of AB 32, most analysts figure it’s about a break-even for the state and its households. You’ll spend some money on energy efficiency, and you’ll save some money by using less electricity and gasoline. You’ll come out about even — and you’ll help reduce greenhouse gas emissions and slow down global warming at the same time.

To its opponents, AB 32 looks like a dead loss, making you pay for energy conservation without getting any of its benefits. Where did the idea of the “all costs, no savings” law come from? Last year, lobbyists opposed to AB 32 hired two California State University business professors, Sanjay Varshney and Dennis Tootelian. They wrote about an energy savings law with no savings [PDF], as it might exist in a world quite different from the planet we actually live on. Varshney and Tootelian, who had no experience in this kind of analysis, decided that the benefits of AB 32 — the money you’ll save on your energy bills — were so uncertain that they should be ignored. That is, they estimated the savings to be exactly zero. They imagined that the costs, on the other hand, were enormously large. (read more…)

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