Cooling on Global Warming

JUNE 25, 2010

If you are still unclear about all the fuss surrounding California’s global warming initiative, AB32, it’s time to clear that up. AB32 is a nasty bill signed into law by the governor in 2006 that amounts to a $60 billion energy tax, and is destined to kill more businesses and jobs in California. It’s also referred to as California’s “cap and trade” bill. Since California legislators like being environmental trail blazers, it’s the first of its kind in the nation, and requires California to roll back emissions to 1990 levels by 2020, a cut of roughly 25 percent.

But what does it mean to California residents in hard numbers? AB32 would cost the average family $3,857 a year in increased expenses for housing, transportation, food and energy. And it could cost the average small business, an additional $49,691 in building space, energy and expensive regulations. There aren’t many small businesses with an extra $50,000 to give to the state.

Aggressive new regulations requiring home builders to use more expensive building materials and building methods will make all homes much more expensive. Homeowners will be required to retrofit existing homes to meet the new standards. The costly retrofits of existing homes will present a new set of problems since many homeowners are already hanging on to their homes by a thread. What will the penalties be for failing to retrofit? Will a lien be put on your home? Will you be fined? Could you eventually lose your house to the state?

New houses will be required to be built closer together with smaller yards and fewer families will be able to live near open space and outdoor recreation.  The increase in housing costs that will result from AB32 is estimated at more than $2,048. California’s beautiful open space living could be replaced with dense housing resembling Copenhagen, more than our beautiful and unique way of life.

Also referred to as California’s global warming initiative, AB32 is already in the implementation stages, creating a larger state bureaucracy by expanding agencies. The California Air Resources Board specifically is beefing up for AB32 implementation. AB32 directed CARB to implement programs to attain emission cuts, including a plan that details dozens of regulations – on employers, manufacturers and businesses.

Most interestingly, even proponents admit AB32 will not be able to do anything to prevent global warming or even cure it. This is about creating another bureaucracy, control and taxing, by a government that is out of control and out of touch.

And everyone knows that you don’t stand in the way of the bureaucracy ship once it sets sail. Or do you?

Tell that to Assemblyman Dan Logue, R-Linda, author of the ballot initiative that will suspend AB32 if it passes in November.

Titled “The California Jobs Initiative,” Logue’s initiative would suspend, not repeal AB32, until the state’s unemployment rate drops below 5.5 percent. Logue’s initiative is designed to stop the job-killing regulations and draconian regulations on individuals, at least until the state’s unemployment lower to a more healthy level.

The good news is that Logue’s initiative qualified and will be on the November ballot. According to Logue, “the qualification of this measure will give Californians a chance to decide between saving California’s economy or sacrificing a million jobs and billions of dollars on new ineffective environmental regulations.”

With 2.3 million Californian residents unemployed, combined with state budget deficits averaging $20 billion each year, California’s fragile economy cannot sustain the enormous costs of AB32, nor can the state withstand more closed business and continued job loss.

What losses are we talking about? Should AB32 implementation continue uninterrupted, Logue reports that experts estimate that more than 1.1 million jobs will be lost (Sacramento State University Economist), the state’s residents will have to pay up to 60 percent higher retail electricity rates (Southern California Public Power authority), there will be an 8 percent increase in natural gas costs (CARB), we can expect a $3.7 billion in higher gasoline and diesel costs (Sierra Research), and could be a possible $143 billion cap and trade auction tax to offset AB32’s higher energy prices and job losses (CARB Economic Allocation and Advisory Committee).

The California Chamber of Commerce, a supposed advocate of business, surprisingly supports implementation of AB32, and is a member of the AB32 Implementation Group. The Cal Chamber even writes the following about offset credits: “The state should be sending strong signals now that offset projects will play a significant role in providing cost-effective emission reduction strategies to contain allowance costs for companies that want to keep jobs and expand in California. Allowing a broad use of offsets to contain costs will be very important as the emissions cap declines in the years leading up to 2020.” The Cal Chamber’s desire for a seat at the negotiating table with legislators, puts it on the wrong side of this issue.

However, if Logue’s initiative passes, the California Air Resources Board would have to also scale back and suspend the sweeping programs that are currently being developed. Fortunately for California‘s small, medium and large businesses, the California Manufacturers and Technology Association has been all over the issue.

In an analysis of the initiative, the CMTA wrote, “Among the most significant that could be put on ice: ‘cap and trade,’ which would restrict the amount of greenhouse gases companies can emit. Those that exceed the threshold would have to buy credits to offset the pollution or invest in new technology to control emissions.”

Passage of the initiative would also stop work on the low-carbon fuel standard, which would establish a statewide policy of cutting the carbon content in fuels by 10 percent by 2020.

The CMTA explains, “State regulators would be stripped of their authority to increase the amount of renewable energy resources utilities must use to meet demand. The current statewide 20 percent target by 2020 — about 7 percent more than the existing amount — will remain in effect.”

The air board’s push for a 33 percent target would have to be delayed if the initiative passes, unless the Legislature steps in. Lawmakers and the governor are negotiating a bill setting a 33 percent standard. By painting the measure as an energy-saver, backers say they may be able to avoid conflicts with the initiative.

Legislators are passing legislation to “back door” AB32 should it be suspended. In a committee hearing this week, Democratic Senators Joe Simitian, Darrell Steinberg and Christine Kehoe continued to push SB722 — a bill that would require utilities to get 33 percent of their power from renewable sources by 2020, a jump from the current 20 percent standard. Instead of waiting for further implementation of AB32, legislators are piling on green legislation in order to permanently chip away at the environmentalists’ green goals.

McClatchy newspapers reported, “The new standard would apply to both publicly owned power generators and investor-owned utilities.

SB722 was approved by the Assembly Utilities and Commerce Committee this week and is expected to win final passage in late summer. Gov. Arnold Schwarzenegger, who vetoed a similar measure last year, applauded the vote but warned that he would seek changes that would streamline the sitting and permitting of renewable projects before signing the final legislation.”

Disturbingly, labor unions, environmental groups and private energy companies reached a compromise over SB722. The bill’s authors insist that the bill will create jobs and attract business to California.

But legislators continue to ignore the businesses leaving the state, including solar companies and the environmentally friendly companies that choose not to expand in California, and instead look to neighboring states for more affordable growth.

The controlling, environmental agenda continues in spite of the California jobs Initiative. And thanks to a governor who is desperate for a green legacy, California may still be subjected to strangling and ridiculous regulations, designed to take our energy use back 20 years in time, when the population in the state was 33 million people. Today, California has 37 million people that we know about. And the state wants to take us back to energy use several million people ago… think about the personal cuts you’ll have to make to your driving, home energy use, and personal lifestyle.

–Katy Grimes