Please write a 4 page (typed double spaced) paper, using clear economic arguments to defend your position regarding the policy impact of California’s plan to drive down GHG emissions in the transportation and building sectors. At issue is the question: Can we create stable and productive economies without hurting the planet? The matter at hand is GHG reduction. The goal of reducing state-wide emissions to 40% below 1990 levels by 2030 was originally declared in (former) Governor Brown’s Executive Order B-30-15 in 2015 and it subsequently was codified into law by Senate Bill (SB32). In 2018, (former) Governor Brown established a new state-wide goal of achieving carbon neutrality by year 2045 or sooner and maintaining negative emissions thereafter. Similar goals were also codified in SB100. To achieve the statewide goals, the state has prepared a scoping plan that articulates a multi-faceted strategy. In your analysis, I would like you to focus on two of them.

Please write a 4 page (typed double spaced) paper, using clear economic arguments to defend your position regarding the policy impact of California’s plan to drive down GHG emissions in the transportation and building sectors. At issue is the question: Can we create stable and productive economies without hurting the planet? The matter at hand is GHG reduction. The goal of reducing state-wide emissions to 40% below 1990 levels by 2030 was originally declared in (former) Governor Brown’s Executive Order B-30-15 in 2015 and it subsequently was codified into law by Senate Bill (SB32). In 2018, (former) Governor Brown established a new state-wide goal of achieving carbon neutrality by year 2045 or sooner and maintaining negative emissions thereafter. Similar goals were also codified in SB100. To achieve the statewide goals, the state has prepared a scoping plan that articulates a multi-faceted strategy. In your analysis, I would like you to focus on two of them. Let’s consider only those policies that impact the transportation and building sectors. The State would like more Californian’s to purchase electric vehicles. To facilitate transportation decarbonization, the Commission has authorized investments in EV charging infrastructure and education and outreach efforts targeted to the public to increase EV adoption. Building decarbonization has received less attention to date but is also under consideration. In February 2019, the Commission opened an Order Instituting Rulemaking (OIR) R.19-01-011 to survey stakeholders and develop a best approach to achieving goals aimed at building decarbonization. One proposal includes (but is not limited to) complete electrification of all appliances in all new residential and commercial buildings and possibly retrofitting existing appliances in the stock vintage homes. Furthermore, all electricity generation must be carbon neutral (ie, sourced from renewables such as wind, solar, etc.) In this paper I would like you to select a market (Pick ONE: cars market or new home market) and address the following issues: Would you be amenable, in today’s economic climate, absent taxes or subsides to buy a new all electric car or all electric appliance home? Why or why not? What are your considerations? If you select automobiles: Note that one way to control automobile pollution is by the use of catalytic converters and other devices that limit pollution to a certain quantity per mile driven. For comparison, imagine a system in which drivers had to pay an annual tax based on the total pollution emitted by their cars. The tax would be calculated by measuring the quantity of pollution per mile, using a testing device such as those now used for vehicle inspections, and multiplying that figure by the number of miles per year shown on the car’s odometer. People could choose to buy catalytic converters, more expensive and more effective pollution control devices,or no devices at all and just opting into paying the additional tax. Do you think that the tax system would be more efficient than the current system, which directly regulates the average fuel economy of vehicles, regardless of how much they are driven? Would it be as effective, in your view, in reducing pollution. Would it be fair? If the State of California is not reaching its GHG goals presently with consumers’ voluntary adoption of the all- electric cars or the all electric appliance homes, what type of policy would you recommend to achieve compliance? Your choices to evaluate are (a) a complete mandatory adoption stipulation, removing all consumer choice (for example, only EV cars can be sold and/or only all electric appliance homes can be built). This type of policy leaves consumers in California with no choice but may guarantee targets for public adoption. Also…. (b) a subsidy to consumers paid to those who buy an Electric Vehicle and/or All Electric appliance new home and (c) a tax to consumers who refuse to buy an all-electric vehicle or all electric appliance new home. Apply what you’ve learned from chapter 5 (externalities) and chapter 4 (welfare) To economists, welfare does not mean a government payment to the poor; rather, it is a way that we measure the impact of a policy on a particular group, such as consumers and producers. By calculating the changes in producer and consumer surplus that result from government intervention, we can measure the impact of such policies on buyers and sellers and society. Use what you’ve learned from chapter 4 and 5 to illustrate with three separate graphs the impacts of each of the policies (a) – (c) above. Which policy makes most economic sense? You can choose from (a) – (c) or make an entirely new recommendation of your own Is your policy efficient? What assumptions are you making about external costs and/or external benefits as you reach your conclusion.