Dr. Zycher: AB 32 Kills 5% of California Employment

Dr. Zycher: AB 32 Kills 5% of California Employment

If approved by the California electorate this November, Proposition 23 will suspend the implementation of the California Global Warming Solutions Act of 2006 (AB 32) until the California unemployment rate declines to 5.5 percent or less for four consecutive quarters. This study examines the historical relationship between employment and total energy consumption in California in order to derive projections of the prospective effects of Proposition 23 on employment. The estimates are based upon the future reductions in total energy consumption attendant upon the implementation of AB 32, as estimated by the staff of the California Air Resources Board (CARB).

The central finding of this study is that suspension of AB 32 would yield increases in aggregate California employment, relative to the case with implementation of AB 32, of a bit less than 150,000 in 2011, rising to more than a half million in 2012, and about 1.3 million in 2020. This assumes that four consecutive quarters of unemployment at 5.5 percent or less would not be observed, so that implementation of AB 32 would not resume. Long-term annual employment growth would fall by one percentage point. The ratio of employment to the population aged 18-65 in 2009 was 66.8 percent. If Proposition 23 is enacted, that ratio will rise to 67.5 percent in 2020; if AB 32 is implemented, it will fall to 62.4 percent in that year, an employment loss equal to about 5 percent of the working-age population.

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