ENVIRON 157 Chapter Notes - Chapter N/A: Diesel Fuel, Emission Intensity, Renewable Portfolio Standard

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Published on 15 Aug 2020
School
UCLA
Department
Environment
Course
ENVIRON 157
PUB POL Week 8 Reading 3
GHG Reductions. Since GHG emissions cause economic damage, there is a global benefit to reducing
those emissions.
• Co-Benefits. Policies that reduce GHGs can have other benefits, such as reducing co-pollutants that
affect local air quality, reducing future energy costs, and/or correcting other existing market distortions.
• Direct Costs. In addressing emission reductions, there are often costs for businesses or households
that require some type of additional monetary payment, such as households paying for more expensive
types of electricity or businesses paying to produce more expensive goods. Other costs are not explicit
monetary losses, but households nonetheless give up something valuable to them, such as comfort,
convenience, or time.
• Indirect Effects. Some direct costs have indirect effects in other areas of the economy as markets
adjust to changes in how households and businesses behave.
• Economic Transfers. Some of the most visible effects of state climate policies—such as cap-and-trade
allowance auctions—largely reflect economic “transfers” between different households or businesses.
Use economywide carbon pricing to achieve low-cost GHG reductions.
• Implement “complementary” policies only in circumstances when they are well-targeted and justified
to ensure they are achieving benefits that carbon pricing would not. Examples might include policies
that effectively promote innovation or reduce other types of pollution.
• Focus on policies that are most likely to encourage GHG reductions in other jurisdictions to maximize
the overall GHG reduction benefits for California.
• Establish a robust system for climate policy evaluation that helps ensure the Legislature has more
complete information about the effects of state climate policies.
Chapter 135 of 2017 (AB 398, E. Garcia) requires our office to annually report on the economic impacts
and benefits of California’s statutory greenhouse gas (GHG) emission goals— limiting GHG emissions
statewide to 1990 levels by 2020 and to 40 percent below 1990 levels by 2030. The state has
implemented a range of policies intended to help meet these GHG limits, hereafter referred to as
climate policies or programs. These policies have a wide variety of economic effects both positive and
negative.
Assessing California’s Climate Policies—Transportation, we provide more detailed information and
comments on the state’s major policies aimed at reducing emissions from the transportation sector. In
subsequent reports, we intend to assess policies that reduce emissions from other sources, such as
electricity generation and short-lived climate pollutants.
Emissions Come From a Wide Variety of Sources. Figure 1 (see page 4) shows the different sources of
GHG emissions in California, as measured by the California Air Resources Board’s (CARB’s) inventory. The
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Document Summary

Since ghg emissions cause economic damage, there is a global benefit to reducing those emissions: co-benefits. Policies that reduce ghgs can have other benefits, such as reducing co-pollutants that affect local air quality, reducing future energy costs, and/or correcting other existing market distortions: direct costs. In addressing emission reductions, there are often costs for businesses or households that require some type of additional monetary payment, such as households paying for more expensive types of electricity or businesses paying to produce more expensive goods. Other costs are not explicit monetary losses, but households nonetheless give up something valuable to them, such as comfort, convenience, or time: indirect effects. Some direct costs have indirect effects in other areas of the economy as markets adjust to changes in how households and businesses behave: economic transfers. Some of the most visible effects of state climate policies such as cap-and-trade allowance auctions largely reflect economic transfers between different households or businesses.