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Knee-jerk opposition to greenhouse gas reform

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Matthew E. Kahn / Environmental and Urban Economics

(Read caption) The author recently saw this home in West Los Angeles, Calif., advertising its support of ballot measure No. 23, which would stall AB32, the law to fight greenhouse gas emission.

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My son had a playdate at a friend's house in Rancho Park. As I walked from Rancho Park back to Westwood, I saw the house whose picture I display below.

This is a typical home in West LA but note the sign on the front lawn; " Yes on 23: Save Jobs". This "bumper sticker" is making a strong causal claim but I see no footnotes or econometric evidence tied to these 5 words. Perhaps we should think this through.

I know how to "save baby seals" but how do we "save" jobs?

Supporters of Proposition 23 (which would stall AB32 --- the carbon fighting California regulation) are claiming that AB32 will raise electricity prices and that footloose employers will leave California for China or Nevada and that the end result will be fewer jobs for Californians.

I have argued that AB32 will simultaneously raise some firms' cost of production but it will create new business opportunities for other firms. Some of these firms who will benefit haven't even been born yet and thus can't lobby for themselves.

Erin Mansur and I will soon release a new working paper where we study how "footloose" are 21 different major manufacturing industries with respect to electricity prices. In english, which manufacturing industries would be responsive to spatial differences in electricity prices?

Permit me to "name names"

Industry NAICS
1. Primary Metal Manufacturing 331
2. Paper Manufacturing 322
3. Nonmetallic Mineral Product Manufacturing 327


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