CSUS AB 32 Study Attacked

The CSUS study authored by Sanjay Varshney (Dean of the College of Business Administration) and business professor Dennis Tootelian is now under attack. Why? Because in the study the refutes AB 32, global warming and green job creation as good for the California economy.

The Sacramento Bee reports today “Last week the university’s student newspaper, the State Hornet, quoted Stanford University energy-efficiency expert James Sweeney as saying the duo’s conclusions about the state’s global warming law were “truly weird.”

Not exactly a bastion of non-partisan, and unbiased reporting, The State Hornet went to Stanford to find a professor to discredit the study, even though CSUS stands by the work done by Varshney and Tootelian.

Varshney and Tootelian’s detailed study showed that regulations on small businesses in California have cost the state’s economy $492 billion and detailed the total cost of regulation to the state of California:

  • $492 billion;
  • Almost five times the state’s general fund budget;
  • Almost a third of the state’s gross product;
  • An employment loss of 3.8 million jobs, which is a tenth of the State’s population.

Since small businesses constitute 99.2 percent of all employer businesses in California, the regulatory cost is borne almost completely by small business.

A 2009 study released by King Juan Carlos University in Madrid discovered that every “green job” created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs. What’s more, just one in 10 of the newly created green jobs actually becomes permanent.

And now, the non-partisan Legislative Analyst’s Office (LAO) has come out with their own report at the request of Assemblyman Kevin De Leon, D-Los Angeles. (The report is available here: PDF)

De Leon, has skin in the game as well. He sits on the  Committee on Natural Resources, and the Santa Monica Mountains Conservancy. De Leon’s bio says that he is a former community organizer, English as a Second Language and U.S. Citizenship teacher, “advocate” for public schools, and was employed for five years at the California Teachers Association, as well as a Senior Associate for the National Education Association (NEA) in Washington, D.C., He also coordinated a team that fought schemes to take funds from public schools in the form of taxpayer-funded vouchers. At the NEA he also thwarted efforts to impose academic censorship on public school teachers.

The Committee on Natural Resources primary jurisdiction includes air quality, climate change, energy efficiency, renewable energy, California Environmental Quality Act (CEQA), coastal protection, forestry, land conservation, oil spills, solid waste and recycling.

The rest of the story is that Assemblyman Dan Logue, R-Linda, has authored an initiative to suspend global warming laws in California (AB 32) until the state’s unemployment rate falls to 5.5%. Logue is taking hits from every direction, and now the LAO has added punches. Varshney and Tootelian’s study found that the additional regulations imposed by AB 32 on California businesses will severely impact small businesses, already suffering from over-regulation in the state.

A recent Milken Institute cost index report that found California has 24 percent higher business costs than the rest of the country. In the same report, the cost of California businesses was compared to Texas: taxes are 57 percent higher in California, electricity is 17 percent higher, and there is a 13 percent wage burden on California businesses that Texas does not have. Texas congregates its Legislature in only odd years and requires a two-thirds majority on every bill, and created 70 percent of the new jobs in the United States in 2008, and had a $2 billion budget surplus in 2009.

The uncertainty of the rising costs and increasing regulations is behind many California businesses choosing to pack up and leave the state.

California has already lost 600,000 manufacturing jobs since 2001 according to the California Manufacturers and Technology Association.

– Katy Grimes


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  1. TheTruthSquad
    TheTruthSquad 19 March, 2010, 08:28

    Katy — This is an INDEPENDENT review of the study.

    The study was paid for by special interests.

    Funny you should mention Texas.

    The initiative to repeal AB 32 is supported almost exclusively by TEXAS oil companies — 89 percent of the $1 million contributed so far by oil companies and 70 percent of total dollars by Texas oil companies.

    Why do you think that is? Do they care about California jobs?

    Why is Small Business California AGAINST the Logue initiative? Why is Meg Whitman’s eBAY against the initiative? As is Google, Waste Management, and on and on.

    The study is junk economics. And the LAO called them on it.

    Reply this comment
  2. EastBayLarry
    EastBayLarry 19 March, 2010, 08:35

    I applaud Dan Logues’ efforts and wish him success. AB32 should never have been passed in ANY economic environment and should be repealed, if possible.

    As the evidence AGAINST man-caused climate change continues to mount and the evidence for such change continues to be discredited, I hope the authors of AB32 and anybody who voted for it are at LEAST ashamed of themselves.

    Reply this comment
  3. Tom Tanton
    Tom Tanton 20 March, 2010, 07:23

    The LAO also damned the CARB analysis (saying even worse things)as did CARB’s own hand picked peer reviewers (including those from Stanford.)LAO also said UNEQUIVOCABLY that AB32 has and will cost jobs (in response to a request by Sen. Cogdill.) Truthsquad I find it bizarre that anyone would criticize help from Texas (from companies or otherwise) as the last I looked they have a budget surplus and WAY lower unemployment.

    Reply this comment
  4. Tyler
    Tyler 21 March, 2010, 13:06

    Those Texas companies that you are blabbering about actually operate in a number of California locations and EMPLOYEE hundreds of California citizens, so they should be concerned with what is happening in California. Its funny that you try to point to companies in California who oppose the proposed initiative, but you fail to mention how all of those companies are EXPANDING OUT OF STATE! Rather than open up their new offices in this “Great” State, they are going into our neighboring states that dont suffocate businesses with Nutjob regulations. Trust me, if the rest of us Californians did not lose our jobs because of AB32, we would be more than happy to donate all the money that would be needed to pass this initiative. Unfortunatly, we are struggling just to make sure our kids are fed and that we dont end up on the streets, all thanks to AB32.

    If you really want to talk about “Junk” studies, how about you look at the toilet paper quality science that is continuously being produced by CARB. We know those must be good science, because they guy they hired to author them was smart enough to just pay $1,000 for his Ph.D, rather than wasting all of that extra time and money going to a real school and learning how to do legitimate analysis. There is not one legitimate study that comes out of that clown house. You might also be happy to know that they recently spent almost $500,000 to study COW FARTS in California!!! Im sure all of those people who lost their jobs, homes, and ability to provide for their families are real happy to know that they are now homeless and hungry just so the Environmental Jihadists at CARB can continue to stroke their egos and kill more jobs.

    If these CSUS studies are so “flawed”, why were none of these innaccuracys addressed before this initiative came out? These reports were hidden by the Governors office for quite a while because they pointed out exactally how harmful all of these job killing regulations really are to the state. They have not denied the fact that they are killing jobs and siphoning hundreds of billions of dollars out California’s economy, they just always go to their fallback standpoint that the number of “Green Jobs” is growing faster than any other industry in California. They never give concrete numbers of HOW MANY actual “Green” jobs were created in California. It is easy to point to the percentage because adding 300 jobs to an industry that only has 200 in place will give you a nice inflated number of a 150% increase. If they were to compare that to the HUNDREDS OF THOUSANDS of jobs that these same policies have killed, that “Green Job” growth conversation would be kicked to the curb where it belongs. They never point out that that there are a ton of “Green” companies that are choosing to establish their business in other states because California is one of the worst business climates in the country.

    If the initiative is so bad, how about you try to address what is wrong with the actual language of the initiative instead of reverting back to the typical “They are funded by a company that has money” BS. You have nothing bad to say about 1.1 Millions jobs being saved from the Nutjobs at CARB. The fact that these Texas companies actually care about the people they employee in California is not a very good argument against an initiative that will prevent more California Citizens from living on the streets and dumpster diving to survive.

    Get your head out of the “Green” clouds and look at the devistation that is being caused by CARB before you go on speaking out against something you know absolutly nothing about.

    Reply this comment
  5. Nehemiah
    Nehemiah 23 March, 2010, 14:28

    Putting aside that one of the best ways to figure out what a bill will actually do is to examine who is funding it and who opposes it, we should look at whether the bill is even written honestly. For example, does it seem honest to imply that Logue’s bill would only suspend AB32 while unemployment is high? There have been only two times in over twenty years that the CA unemployment rate was at or below 5.5% for the requisite period of time. The first was in the year leading up to the Dot Com crash. The second was in the year leading up to the mortgage-related crash. (a) the authors know that 5.5% unemployment is a very temporary situation in a time of false exuberance. (b) They also know that if we DID have four quarters of 5.5% or less unemployment, and began to restart the AB 32 provisions, that they would have a built in argument for torpedoing them again as soon as the new crash came. It is a disigenuous attempt to make people think they are being resonable while really truning the clock back. The one bright spot in the CA economy of late has been the green sector. Do we really want to suspend the cure until the malady goes away?

    Reply this comment
  6. Tyler
    Tyler 30 March, 2010, 10:56

    The “Green Sector” is only growing because they are basically being bribed by Arnold with funding and tax exemptions. The “Green Jobs” that will appear in CA over the next year dont even come close to making up for the amount of jobs that AB 32 kills in 1 month. The wonderful thing about these “Green” jobs is that only 1 in 10 of them are permanant, so it costs 22 private sector jobs to “create” 1 permanant “Green Job.” Supporting a government policy that will kill 22 existing jobs in the hopes of creating 1 job is one of the most ridiculous things I have ever heard.

    These “Green” technologies are not efficient enough to support all of our needs. They are in an infant state right now and if the Government forces them down our throats, people are going to get fed up with paying 4 times as much for an unreliable source source of energy. People will form bad opinions about “Green” technology which will set it back much farther than suspending AB 32 will. They need to let the FREE MARKET run its course and stop trying to play God. Our Government is not capable of doing anything more efficiently than the free market.

    Its funny that all of the people who oppose the jobs initiative all sound like they have been spoon fed their information from Arnold, Al Gore and Queen Mary. Its probably pretty safe to say that all of you have some sort of government job, which means you do not know what unemployment really is. I would love to see you argue the benefits of AB 32 on our economy if you did not have a cushy government job with absolutely no chance of being fired and benefits for life. If you had to worry about how you are going to feed your family you would have a much different opinion about a law that will KILL 1,100,000 PRIVATE SECTOR JOBS. You may not realize it, but its us peasants who pay the taxes that pay for all of your job security and benefits, so you may not want to blindly support laws that will ultimately lead to our government going broke and YOU LOSING YOUR JOB. If CA forces all of the tax paying people and companies out of state, the next people on the chopping block are the government paper pushers. Good Luck with that. Just remember, the government cannot create jobs, its the small businesses that create jobs, all the government can do is repeal regulations that kill jobs. The government cannot give anything to anyone without first taking it from someone else.

    Reply this comment
  7. Tyler
    Tyler 6 May, 2010, 11:19

    Nobody said it was funded or produced by CSUS. The Dean of the Business Department and an Economics Professor from CSUS were the Authors of the study and everyone that has actually done legitimate research on this subject is well aware of that, but thanks for the breaking news.

    Reply this comment
  8. Suryana
    Suryana 13 February, 2012, 07:14

    Very itrsteening. I would infer from the information that women receive higher raises (percentage wise), that the reason for lower salaries would be job choice and temporary removal from the job. Very itrsteening, indeed.

    Reply this comment

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