Climate change is a high priority for Gov. Jerry Brown and many other state leaders, and an effective way to move forward in this fight is to promote energy-efficient economic development, particularly in manufacturing and other energy-intensive sectors.
Manufacturers using California’s low-carbon energy are responsible for fewer greenhouse gas emissions than manufacturers in other locations with less stringent regulations. Keeping manufacturing in California rather than letting production leak out of state is key to lowering overall global greenhouse gas emissions.
But there is another reason to promote California manufacturing. The Trump administration and Congress may roll back federal greenhouse gas emissions regulations and pull out of international agreements. If there is no “stick” of federal regulation, a “carrot” approach may inspire other states to take action on climate change. Demonstrating to them that our clean-energy plans support robust creation of manufacturing jobs would be a good first step.
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Californians should be proud of our status as the largest manufacturing state in the country. Companies here count among the most energy efficient and productive in the world. They benefit from our robust supply chains, universities and access to international markets to support manufacturing job creation.
But despite these advantages, the data on California manufacturing jobs and investments in recent years is troubling. Since the end of the recession in 2010, California has grown manufacturing jobs at a low rate of 2.6 percent compared to the country’s 7 percent.
Manufacturers vote with their investment dollars when it comes to expansions, new sites and job creation. In 2015 we received only 1.5 percent of U.S. manufacturing investment, the lowest of all states. This is far below the investment we need to modernize our facilities and maintain a healthy share of U.S. manufacturing employment.
California’s high energy costs are at least partly to blame for this underperformance. These costs stand to move even higher under current climate change policies beginning in 2018. We don’t want other states to point to our weak manufacturing data and high costs as a reason to stop progress on their own emission reduction strategies.
That’s why it is time for California leaders who are serious about reducing global greenhouse gas emissions to make our policies work for manufacturing. The first step is to fix the cap-and-trade regulations to retain cost-containment tools for in-state manufacturers so they can afford to meet the 2020 and 2030 climate change goals. Other steps in our full manufacturing growth agenda include career and technical education funding, and tax policies to remove barriers to manufacturing investment and employment.
Climate change leadership that speaks to the needs of manufacturing will attract other states to join the fight and would be a win-win for the global environment and the economy of California.
Dorothy Rothrock is president of the California Manufacturers and Technology Association. She can be contacted at email@example.com.