The most expensive thing we can do is nothing - enter the economists

It is impressive what economists can achieve sometimes (or appear to achieve, at least).

Recent posts on environmental blogs and in national newspapers have talked about California's recent "trail blazing" stance on climate change. For example, from the Independent.

Setting trends: State that has blazed an environmental trail
By Rupert Cornwell in Washington
Published: 01 September 2006
Today California, tomorrow America, and the day after tomorrow, the world. So it has been in matters ranging from fashion and music to high tech and healthcare. But nowhere has the state's role as trendsetter par excellence been as great as in the field of the environment.

The deal announced between Governor Arnold Schwarzenegger and the California legislature, ordering a reduction of greenhouse gas emissions to 1990 levels in the state by the year 2020, is but the latest in more than half a century of trailblazing measures that have frequently become the national, and on occasion the international, norm.

If we go back just a few weeks we get this open letter from 60 (sixty) economists from California addressed to Governor Schwarzenegger including no less than 3 nobel laureates. Surely not a coincidence? Perhaps they are listening? The current shortage of nobel prize winners (in any subject) in the UK may make a similar letter from this country less likely.

The text of the letter is as follows:

August 2006
Dear Governor Schwarzenegger and California Legislators,

AS CALIFORNIA ECONOMISTS with expertise in energy and environmental policy,we believe that the State of California should move quickly to control global warming gases.

California’s economy is vulnerable to climate impacts, including changes in water availability, agricultural productivity, electricity demand, health stresses, environmental hazards, and sea level. Action to reduce emissions will lower the costs of adjusting to climate-related disruptions and serve as public insurance against more dramatic damages that can be expected when opportunities to adapt are limited.

While global climate change poses significant risks to the California economy, we believe that well-designed strategies to limit global warming gases can reduce emissions substantially at low or no cost to the state, and could yield economic (as well as climate) benefits.

Well-designed strategies can stimulate innovation and efficiency, which could help the state become a technological leader in the global marketplace.

Global warming gases will be best managed through a combination of policy approaches. Emissions caps combined with a range of regulatory and market-based implementation mechanisms offer a particularly potent strategy because they provide clear incentives for changes in business practices and the development of new technologies. Such an approach assures that economic forces are directed to finding the most efficient means of reducing emissions.

We urge you to accelerate climate action policies that will demonstrate political leadership and create economic opportunities in California. The most expensive thing we can do is nothing.

Open letter on climate change