ICF International Study Examines Best Use of California’s AB 32 Auction Proceeds

Proceeds Reinvestment Would Improve Jobs and Income

Business Wire


ICF International (ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, has announced the findings of the study Modeling the Economic Impacts of AB 32 Auction Proceeds Investment Opportunities which compare the economic impacts of different uses of proceeds from California’s carbon emissions trading program under the state’s 2006 climate law, AB 32.

AB 32 has the potential to generate significant auction proceeds once the cap expands in 2015 to cover transportation fuels. ICF’s analysis explores five options for reinvesting those proceeds back into California’s economy and evaluates the relative economic impacts of each option.

The analysis projects that the potential best use of the proceeds may depend on the desired outcome as certain options result in better job creation while others lead to higher incomes. Investing in options that reduce greenhouse gas emissions, such as energy efficiency or clean transportation, can lead to the highest job growth. Distributing the funds as a per capita dividend can improve equity and raise income for California residents. Free allocation to the fuel sector would likely lead to the smallest macroeconomic benefit for the state. The study projects that the most advantageous use of the auction proceeds could be a “blended” scenario combining multiple reinvestment options, which could improve jobs as well as incomes.

“As the economy bounces back from a deep recession, the issue of how best to use auction proceeds from a carbon policy has significant relevance not just for California, but for other jurisdictions as well,” said Bansari Saha, Ph.D., senior manager at ICF International. “This study is one of a few empirical analyses that compares different options for using those proceeds and sheds light on important distributional implications of revenue recycling.”

“As other parts of the U.S. and the world contemplate comprehensive programs to reduce gases implicated in global climate change, all eyes are on California,” added Jan Mazurek, Ph.D., senior fellow for ICF International. “ICF appreciates the opportunity to work on this study designed to inform sound public policy.”

The study was commissioned by the Energy Foundation.

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About ICF International

ICF International (ICFI) partners with government and commercial clients to deliver professional services and technology solutions in the energy, environment, and infrastructure; health, social programs, and consumer/financial; and public safety and defense markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program lifecycle, from research and analysis through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 4,500 employees serve these clients from more than 50 offices worldwide. ICF's website is http://www.icfi.com.

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