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In California, AB32 is economy-wide and would result in 174 million tons of emissions reductions.

Instead of opposing AB32, the market-based flexibility that the bill embraces has convinced the giant Northern California utility, Pacific Gas & Electric (PG&E), to support the bill, as do a wide range of Silicon Valley companies and venture capitalists, that have been investing heavily in the clean and renewable energy sector. In fact, studies from my research group at UC Berkeley, as well as macroeconomic models of the state economy prepared for the California Environmental Protection Agency, both find that an investment in clean energy will likely bring economic benefits to the state in the form of significant numbers of new jobs and export opportunities for what is becoming known as the ''clean tech'' sector.

AB32 will have a transforming effect on power generation and greenhouse-gas emissions far beyond California. Power providers, that sell into the huge California market, will be subject to the cap-and-trade provisions through the utilities, including PG&E, that sell their energy. California has thus effectively utilized market forces to not only find the most cost-effective ways to reduce emissions and inefficient uses of energy, but also to encourage innovation to bring solar, wind, clean bio-fuels and other forms of renewable energy into the market.

Daniel M. Kammen is the Class of 1935 distinguished professor of energy at the University of California, Berkeley. He co-directs the Berkeley Institute of the Environment and is founding director of the Renewable and Appropriate Energy Laboratory (RAEL). He has appointments in the Energy and Resources Group and the Goldman School of Public Policy.