Study Pegs AB 32 Power Industry Cost at Up to $500 Billion

By Published On: March 19, 2010

In what could be a preview of the California Air Resources Board’s upcoming study on the cost of implementing the state’s climate protection law, a report released earlier this month by E3 for Hydrogen Energy International says the total tab in the electricity sector alone may mount to between $400 billion and $500 billion by 2050. Much of that cost could be incurred between now and 2020, according to the report. The study predicted that to meet the 2050 goal of cutting greenhouse gas emissions 80 percent below their 1990 level, the state will have to more than double production of electricity, mostly to electrify its transportation system. E3 said that as spending to implement AB 32, the state’s greenhouse gas reduction law, ramps up, the cost of power could rise to 26 cents/kWh and energy costs may come to represent 7 percent of the state’s gross economic output. That’s about 1.3 percent more than if the state did not pursue AB 32, the report forecasts. That could amount to $1,200 a year more per person in expenditures on energy, the report stated. E3 is one of the consulting firms working with the Air Board on its revised economic assessment of the state’s AB 32 program. The Air Board undertook a fresh study of the economic impacts of the program after its original study in 2008 came under fire. The new study should be released in the next couple weeks, according to the Air Board. * * * * * Valero Energy may have violated state law for failing to disclose is contributions to halt California’s climate protection law AB 32, an environmental organization claimed March 18. An anti-AB 32 initiative seeks to suspend the state’s drive to cut carbon pollution until the unemployment rate drops to 5.5 percent. “We are concerned that a polluting Texas oil company is deceiving the public about their effort to buy their way onto the ballot to overturn California’s clean energy law,” stated Bernadette Del Chiaro, Environment California clean energy advocate. She added that Valero may also be going against the grain of state campaign financing laws. Environment California plans to file a complaint with the Fair Political Practices Commission. The initiative was launched earlier this year by a group calling itself the People’s Advocate and Assemblymember Dan Logue (R-Marysville). However, the People’s Advocate was booted out by a big oil lobbyist (Current, March 5, 2010). * * * * * California businesses and utilities would pay $143 billion between 2012 and 2020 if the state auctions greenhouse gas emissions rights at a price of $60/ton, a business group said March 15. In an analysis of what utilities and companies would pay based on greenhouse gas emissions reports filed under the state’s climate protection law, AB 32, the group said that Los Angeles Department of Water & Power, for instance, would pay $246.7 million a year if the rights were auctioned at $60/ton. Silicon Valley Power would pay $33 million a year. The organization--led by the California Manufacturers & Technology Association and the California Chamber of Commerce--is known as the AB 32 Implementation Group. The group is urging the California Air Resources Board--which is in charge of carrying out AB 32--to drop its plan to auction emissions rights under a carbon cap-and-trade program. The Air Board is planning to adopt a carbon cap-and-trade program this fall. * * * * * By unanimous vote, the Davis city council has declared the college town will strive to become carbon neutral by mid-century. In a March 16 announcement, the city said its short-term target is to cut the community’s carbon emissions up to 50 percent by 2013. To do that, the city is using a “Cool Davis” campaign to try to engage 75 percent of households to go on David Gershon’s “Low Carbon Diet: A 30-day Program to Lose 5,000 Pounds.” The program encourages households to tailor a carbon diet following simple to implement actions supported by peer group eco-teams. Davis is home to 65,000 people. Early results from other “Cool Community” pilot programs using Gershon’s diet show emissions reductions, said the city announcement. “Cool Portland,” the first pilot program, more than doubled its goal of cutting carbon emissions by 10 percent per household, realizing an average reduction of 22 percent, or 6,700 pounds. Peer-support groups of 5 to 8 households in Vermont similarly reduced their carbon footprint by 23 percent. * * * * * A national survey of corporate use of renewable energy--onsite installations and/or via the purchase of renewable energy credits--found that the decision to use alternative energy is driven by cost. The survey was conducted by the trade dailies Environmental Leaders and Retailer Daily and released March 16. It looked at other factors expected to motivate the use of solar, wind, and other renewable resources--either directly or indirectly--including corporate responsibility, image, and the future viability of fossil fuels. State and federal incentives for renewable energy are considered key parts of the entity’s financial motivation to invest or not invest in alternative power. At the same time, the survey revealed that “return on investment is not a significant factor in most renewable energy decisions.” Numerous companies are expected to invest in renewable power supplies or credits representing their green attribute. In addition, corporations that have invested in renewable power are expected to expand use, concluded the survey. Included in the survey were JC Penny, Costco, and the USPS.

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