Economic Models of AB 32: An Evaluation

Knittel, Christopher R

from ARE Update Vol. 14, No. 1, September/October, 2010 SPECIAL ISSUE - California's Climate Change Policy: The Economic and Environmental Impacts of AB 32

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Assembly Bill 32 (AB 32), the Global Warming Solutions Act of 2006, requires California to reduce its greenhouse gas emissions to 1990 levels by 2020, representing roughly a 25% reduction compared to business as usual. In this note, I summarize and discuss the key assumptions of a number of economic models estimating the costs of AB 32. Despite ignoring many of key benefits of AB 32, the model suggests the costs of AB 32 are likely to be small.


costs of AB 32, climate change legislation, economic models of AB 32


Knittel, Christopher R. 2010. "Economic Models of AB 32: An Evaluation." ARE Update 14(1): 12-15. University of California Giannini Foundation of Agricultural Economics.