California’s leadership role in the global effort to address climate change is unparalleled. But we are now at a critical point.
Can next-generation policies achieve reductions in greenhouse gas emissions and also support jobs and economic growth at reasonable costs? We must have confidence we can achieve both goals if we expect other states and nations to join us in achieving our ambitious climate change goals.
The statewide business community has been on the forefront of reducing emissions and paying billions in implementation costs for AB 32. This year Gov. Jerry Brown outlined in his State of the State address new goals for 2030 and 2050; the Senate then rushed ahead with Senate Bill 32 and Senate Bill 350.
Since then California’s business community has provided policymakers with examples of energy cost increases and potential job losses from existing climate policies. Unfortunately, new fees, taxes and mandates that would be imposed under the proposals will further impact jobs and business growth, as they create far-reaching new mandates out to 2030 and 2050.
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The authors of the legislation agree there are shortfalls and are considering amendments. But our coalition of statewide business community leaders believes flaws in the bills go far beyond what the authors acknowledge.
First, the legislation grants too much authority to the California Air Resources Board to develop state policy on energy, transportation, resources, land use and business development, in addition to its primary role of implementing environmental programs. The bills must be amended to require legislative approval of policy decisions before the programs are allowed to proceed.
Second, the legislation opens the door for more programs without analyzing the cost impacts of the 65 current climate change programs that are directly or indirectly raising costs on Californians.
For example, the California Energy Commission projected an electricity rate increase of 26 percent to 42 percent through 2020. However, electricity rates and bills will be much higher because many of the mandated renewable energy contracts have not yet been built into the rates. While ARB acknowledges that the Fuels Under the Cap program is already responsible for a 10-cents-a-gallon increase, we do not know how much the Low Carbon Fuel Standard and other policies will raise gasoline and diesel costs. The legislation needs to take cost increases off autopilot and provide protections for Californians.
Third, California’s “go it alone” policies are creating an uncompetitive business climate that is having job, income and business impacts in many communities. While the economy has improved, it is still volatile and we are falling further behind in growing middle-income jobs in manufacturing and goods movement.
A global problem cannot be solved by California alone, which contributes only 1 percent of the total greenhouse gas emissions. Many experts believe that California will only be successful in reducing greenhouse gas emissions if other states adopt similar policies. The bills need to be amended to ensure other states are following before we allow state agencies to pile more programs on top of the massive ones that already exist under AB 32.
In the fevered battle over climate legislation, it is tempting to demonize those who have voiced concerns. However, our concerns reflect our interest in supporting appropriate state governance, rational energy policy and healthy economic development. A climate policy that ignores these important values will not be sustainable in the long run.
Rob Lapsley is the president of the California Business Roundtable. Dorothy Rothrock is the president of the California Manufacturers and Technology Association.