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Trump Says Environmental Regulations Tank The Economy. California Is Proving Him Wrong.

California has slashed its greenhouse gas pollution while growing its economy faster than the US as a whole.

Posted on July 14, 2018, at 10:01 a.m. ET

Mario Anzuoni / Reuters

For years, President Trump has insisted that environmental regulations hurt the economy, pledging to roll back Obama-era policies aimed at curbing climate change, bring back the coal industry, and open US coasts to oil drilling.

“I am taking historic steps to lift restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump, flanked by coal miners and coal company executives, said last year at the Environmental Protection Agency.

But it turns out there's a place in America that shows the opposite can be true: California, where the economy has grown rapidly despite the state's toughest-in-the-nation policy on greenhouse emissions.

This week, the California Air Resources Control Board (CARB) announced the state had reduced its carbon emissions by 13% since 2004, dropping below 1990 levels for the first time, and reaching its target four years early.

The news was hailed by environmental groups, regulatory officials, and Gov. Jerry Brown.

Data from CARB shows California's GDP growing even as emissions are reduced.
CARB / Via arb.ca.gov

Data from CARB shows California's GDP growing even as emissions are reduced.

But perhaps even more significantly, California managed to reduce its pollution emissions while simultaneously growing its economy at a faster rate than the US as a whole. According to CARB, California's economy grew 26% since 2004, when emissions peaked.

The exact relationship between the state's environmental regulations and its economic success isn't entirely clear, and experts caution against tying the trends together too directly. There isn't a "one-to-one casual relationship" between economic growth and California's environmental regulation, said William Fulton, the director of Rice University's Kinder Institute for Urban Research and a former official of multiple California cities.

And while the regulations didn't explicitly produce the overall economic growth in the state, it is abundantly clear that California's environmental policies didn't hurt its economy.

"What we do know is the economy has grown and carbon emissions have gone down and so has the carbon intensity of the economy," said Jim Bushnell, an economist at the University of California, Davis. "The reduction in carbon has not significantly impaired the economy in any way."

But could the state's economy have grown even more without its stringent environmental regulations?

"It’s unlikely that it would’ve been significantly different if we hadn’t pursued the same goals," said Bushnell.

Despite the tough emissions goal, California's economy has also outpaced other large states with a deeper investment in fossil fuels.

"Texas’s economy grew faster out of the recession," Fulton explained, "but now California is growing faster."

The state's attempts to cut emissions have also had a direct, positive impact on specific industries, experts said. Colin Murphy, an analyst at clean energy research nonprofit NextGen Policy Center, said that in recent years California has invested billions in solar energy, expanding public transit, funding greenhouse gas reductions, and retrofitting buildings to be more energy efficient.

"All of this stuff is the kind of infrastructure investment that Economics 101 says will spur growth," he told BuzzFeed News.

A chart shows California's gross domestic product per capita rising more quickly than the US as a whole in recent years.
BuzzFeed News / Via US Bureau of Economic Analysis

A chart shows California's gross domestic product per capita rising more quickly than the US as a whole in recent years.

The regulations have also forced California to innovate to meet its goals, said Dave Clegern, a spokesperson for CARB.

"We’re at a point where our economy now is getting a considerable boost from the innovations these regulations are driving," he said.

The various regulations — which have gradually rolled out over decades and softened any potential economic blow — have also forced the state economy to become more efficient.

"California is a really efficient place," Clegern said. "There’s very efficient fuel economy. The amount of energy used per capita is way less than other parts of the country. In that sense you see an alignment between enforcing regulation and economic growth. Greater efficiency allows for more growth."

Those conclusions fly in the face of California's critics, and appear to contradict oft repeated claims from President Trump that rolling back regulation and reviving the fossil fuel industry are keys to prosperity. Trump has famously appeared at rallies wearing a hard hat and flanked by signs touting his love for coal, and has cited supposed economic benefits when rolling back protections on wild lands in the West.

Coal miners wave signs at a Trump rally in Charleston, West Virginia, on May 5, 2016.
Steve Helber / AP

Coal miners wave signs at a Trump rally in Charleston, West Virginia, on May 5, 2016.

Trump also cited the economy as a primary driver behind his decision to pull out of the Paris Climate Accord, which aimed to reduce greenhouse gas emissions worldwide. And this year the Trump administration feuded with California over its fuel efficiency standards — which are among the state's more celebrated and copied environmental regulations.

The Golden State has faced a number of other critics of its regulatory environment over the years as well. The 2006 law that led to California's 2020 climate target, for example, was opposed by petroleum industry groups and the California Chamber of Commerce on the grounds that it would hurt the state's economy. And the chamber has repeatedly included environmental regulation on its annual list of "job killers."

The experts who spoke with BuzzFeed News, however, pointed out that predictions about economic apocalypse in California clearly haven't panned out.

"A few select industries have been advancing this narrative that we are a really business-unfriendly place to be," Murphy said. "But businesses keep locating here."

"If you believe that your economy must be based on fossil fuel consumption, then yeah, probably additional environmental regulation will harm economic growth," Fulton said. "But if you accept the idea that over time you can transition the economy, then you can find new opportunities for growth."

Though California has now met its 2020 emissions goal, it still has an ambitious, unmet target: reducing greenhouse gas emissions to 40% below 1990 levels by the year 2030. That goal may be more difficult to reach because some of the easiest places to make gains, in industry for example, have already been tapped. But experts said that they expect California to be able to weather the transition to an even cleaner economy.

"If people buy into it in their personal lives, we can make this happen with a growing economy and minimal pain," Clegern said. "You can have a fine economy and take care of the environment. You don’t have to tie those together as an either-or."


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