California: Environmental AND economic success

US state California, regarded as implementing the most stringent environmental policies, has surpassed France to become the sixth largest economy in the world.

Last month, California generated US $2.46 trillion in gross state product and produced 459, 400 non-farm jobs last year – more than any state in the nation.

Such impressive GDP growth in California has earned California its place as one of the largest economies in the world – just behind the overall US economy, China, Japan, Germany and the United Kingdom.

At the same time, the state has implemented very ambitious climate change policies and CO2 emissions have fallen – countering notions that environmental restrictions undermine industry economic growth.

Economists, such as Meredith Fowlie, Economics professor at the University of California Berkeley, have rejected these ideas and pointed to California’s prosperity as proof: "California is demonstrating how economic growth can continue amidst more ambitious climate change policy.”

In recent years, the Californian government has introduced a number of policies in an attempt to combat climate change.

Highlights include The Clean Energy and Pollution Reduction Act of 2015, which requires California to generate half of its electrical power from renewable sources by 2030, and the Cap-and-trade regulation designed to reduce greenhouse gas emissions to 1990 levels by 2020 by offering incentives.

Matthew Kahn, Economics professor at the University of Southern California, spoke highly of these policies: “when the state government not only implemented but gave financial perks to businesses for adhering to these policies, plenty of “green entrepreneurs” jumped at the opportunity.”

According to William Fulton, director of the Kinder Institute for Urban Research at Rice University, California’s prosperity can be attributed to its “newly-evolved commercial landscape shaped by environmental policy.

This “green industry” revolves around a sustainable and environmentally responsible business model that adjusts to work with environmental policy,” Fulton said.

He added: “California is getting better and better at making green options that are more financially competitive.”