Cost of imlementing Greenhouse Gas Emission (GHG)


Greenhouse Gas Emission (GHG) has become a great risk to many countries and this call for an immediate plan to cope with this problem. In 2006 California government, led by head Schwarzenegger signed a Global Warming Solution Act that had the vision 2020 greenhouse gas emissions reduction plan. This prompted the California Air Resources Board (ARB) to develop strategic pre-actions to assist in achieving the 2020 goal through designing the best practices starting from the year 2011 (California Environmental Protection Agency, 2011). The below study gives an analysis of this planned program based on; the implementation cost, political and economic factors towards the project, calculations on the anticipated carbon emissions, and its replications at other government levels.

Cost of implementation of California’s Greenhouse Gas Emissions Reduction Goals

In California, the cost of reducing Greenhouse Emissions is estimated at 80 per cent, which is below the levels during 1990, by the year 2050. These predictions will depend on future technology, and the future prices of bio-fuel, oils, and other fossil fuels. However, considering the cost of technology and oil prices, California estimates the cost of implementing the GHG plan to 66 billion dollars, which amounts to an increased cost of approximately 1,200 dollars per person. Figure 1 shows the estimated cost of implementing the GHG plan by the year 2050 in California. From the figure, the potential costs are expensive but this does not prevent the government from taking the action since it will reduce many climate catastrophes in the country (Energy and Environmental Economics, Inc, 2009).

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         According to Energy and Environmental Economics, Inc, the risks that comes about because of greenhouse emission and global warming, and the prolonged dependence on oil importation out ways the cost of preventing greenhouse emissions reduction, therefore; this seems a good plan to tackle. Although considering the costs of mitigation, adaptation, and non-compensated losses, the 2050 GHG reduction plans seems costly. In determining the reduction cost, two analyses are considered. First is the upcoming emission reduction initiative costs that takes into account the activities that the government will involve in an effort to reduce greenhouse gases emissions. Secondly, an analysis of the future oil and gasoline prices is considered since it gives an indication of the amount of money the government will spend in importing oil for industries and machineries (California Air Resource Board, 2009). While analyzing the GHG program cost, all emission measures costs are doubled to their expected rate, while reduced to half the expected level in order to express their deep uncertainties surrounding the operation. In the case of oil price, EIA determines the prices randomly using the oil price forecast as shown in the error bars on figure 1.


Figure 1: 2050 Annual Net Cost Comparison and price Sensitivities for the implementation of GHG plan in California

Political and economic factors supporting or prohibiting its success

            The California government fully supports the program since will improve the lifestyles of people in the region and also, reduce the number of incidences in the country. Although the plan seems expensive to implement, it will save the government a lot of money in dealing with cases relates to global warming and greenhouse emission effects. The local governments with the help of the California government have come up with clear distinctive criteria indicating their priorities, circumstances, and time frame in an effort to implement GHG reduction plan. Another political factor influencing the program implementation is the political and public acceptability of the project whereby, a set of legal constraints that introduce the different policies to follow during the program are set. On the other hand, political governance and financial performance are two inseparable factors. This is due to the fact that well established governance in a firm enhances its value and the related operation performance in implementation of various projects. This is achieved via effective cooperation between the political leaders, the government heads, and citizens, well-established resource allocation means, and handling of responsible parties in a better way (EPA, 2011).

The economic factors supporting GHG emission program in California are as follows. First, there is the building life cycle cost programs that conduct the economic analysis through evaluation of the appropriate method to use in accomplishing the plan. Secondly, there is the job and economic development impact models designed to analyze the cost of construction and operating the power generating and bio-fuel plants at both local and state level. Finally, the California government has set aside enough funds to be used during the implementation of the GHG reduction program (EPA, 2011).

Calculations of anticipated carbon emission reductions

The climate change is a big threat to a nation since it affects the economy prosperity, public health, and quality of life of individual. The amount of carbon produced through GHG emission is estimated to be more than 800 million metric tons CO2 equivalent by the year 2050. This is indicated on table 2 below. Under the baseline case, shown below, if the government fails to undertake GHG reduction program, the estimated carbon production is shown on the red scale. On the other hand, the states targeted reduction range is shown in black. Calculations of the estimated carbon production are done using different methods and gadgets that give future estimations. California expects to achieve the expected target since the expected rate is too high and might lead to many losses in the state. To accomplish this, the state governor came up with five strategic approaches in order to achieve the 2050 goal. These plans are; environment conservation, efficient energy for generators, use of low-carbon biofuels, electrification, and mitigation of non-fuel use GHGs (Gruenneich, 2005).

Figure 2: baseline trajectory and 2020 and 2050 Emissions targets (1990-2050) in Million Metric Tons CO2 equivalent (MMtCO2e)

Whether the program is replicable at other levels of government

Following the strategies set by the California government; this program is very much applicable to other government levels. This will happen through various campaigns to be held all over the state. By following the above program, many governments will be saved from GHG emissions and other inconveniences associated with global warming. The set policies lead to investigations and new technology development together with creation of new technologies. On the other hand, businesses, organizations and institutions will be saved millions of dollars after following the energy efficiency measures like those adopted by California government.


California Air Resource Board. (2009). California Mandatory GHG Emissions Reporting and

            Verification Webinar. Retrieved from:

California Environmental Protection Agency. (2011). Assembly Bill 32: Global Warming

            Solution Act. Retrieved from:

Energy and Environmental Economics, Inc. (2009). Meeting California’s Long-Term

Greenhouse Gas Reduction Goals. Retrieved from:

EPA. (2011). State and Local Climate and Energy Program: Identifying and Evaluating Policy

            Program Options. Retrieved from:

Grueneich, D.M. (2005). California Green Gas Emissions Reduction Initiative. Retrieved from:



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