At this moment in history a financial crisis of global proportions is unfolding. The impacts of this disaster will be felt for years to come, and its cost borne by future generations.  A universal lesson also comes from this crisis: Markets can deliver profits, but they may not deliver sustainability. For this reason, the public interest must be secured at all times by policy foresight and responsible leadership.  

The serial market failures sparked by the collapse of the housing industry and credit markets have profound consequences for California’s budget.  Given the current fiscal uncertainty, it is reasonable to challenge government priorities, assessing the long-term economic and social performance of every dollar of government spending and every regulation. California's Global Warming Solutions Act of 2006 (AB 32) is a hallmark example of the proactive initiatives needed to sustain California’s prosperity, overcoming short-term challenges to put the state on a long-term path of lower carbon emissions and higher economic growth.

While multiple studies have been conducted assessing the economic impacts of the California Air Resources Board's Scoping Plan to implement AB 32, to date, there has been limited economic analysis of California’s climate risk -- the impact of climate change if the state continues business-as-usual -- or of the adaptation needed to cope with unavoidable climate change. This report provides for the first time a comprehensive examination of the economic impacts of climate change and adaptation in California. In conducting this multi-sector assessment, we compile the most recent available science on climate damage, assess its economic implications, and examine alternative strategies for adaptation.

The report can be downloaded here.