USC Price School of Public Policy faculty members Professor Adam Rose and Professor Dan Wei on Nov. 17 briefed a delegation from the China National Development and Reform Commission (NDRC), the macroeconomic management and planning authority in China, directly under the Chinese State Council.
The major functions of NDRC include: 1) formulating and implementing plans and strategies for national economic and social development; 2) issuing guidelines on the restructuring and optimization of the nation’s economy, and coordinating and balancing the development of primary, secondary and tertiary industries; 3) promoting sustainable development; 4) formulating policies to address climate change issues and representing the country in international negotiations of climate change; 5) coordinating regional economic development and cooperation.
Professor Rose summarized a study on Development of the Monterey Oil Shale Formation he co-authored with USC Price emeritus professor Peter Gordon, Price PhD alum JiYoung Park, Professor Wei, and USC Viterbi School of Engineering Professor Fred Aminzadeh.
Dr. Rose pointed out that this exploratory study, completed in spring 2013, projected a large economic gain to the state. However, the U.S. Geological Survey and Energy Information Administration significantly downgraded estimates of the reserve base in May 2014, thereby warranting a reduction of the estimates of the economic development potential in the near future. At the same time, the history of such revisions indicates that improved technology and rising energy prices over time will increase the reserves estimates. Still, at its maximum recovery potential, the Monterey Shale could be exhausted within 20 years. Professor Rose also noted that it is necessary to evaluate the many related considerations in developing this resource, such as potential groundwater and surface water contamination, induced seismicity and infrastructure overload, before proceeding with any large-scale development.
Professors Wei and Rose also presented their study on the macroeconomic impacts of the California Global Warming Solutions Act on the Southern California economy.
The greenhouse gas (GHG) mitigation policy options recommended by the Southern California Association of Governments (SCAG) for the Southern California Region are estimated to reduce 853 million tons of CO2e during the planning period between 2012 and 2035, and are expected to yield a net positive impact on the regional economy in terms of employment but a slightly negative impact on GDP. The sensitivity analyses in our study emphasize the importance of policy designs that can potentially improve the macroeconomic performance of some key mitigation policy options, such as the Renewable Portfolio Standard. These include attracting more green manufacturing firms to the Region, investing in R&D in green technologies, and attracting more federal subsidies and investment from other regions. The NDRC officials were very interested in learning the methodology for analyzing the macroeconomic impact of GHG mitigation policies and appreciated the insights on the key policy alternatives that can potentially improve the macroeconomic impact of GHG mitigation in their country.