Green chemistry regulations poison California jobs

Oct. 8, 2012

By John Hrabe

Four years ago Gov. Arnold Schwarzenegger signed into law California’s controversial Green Chemistry regulations: AB 1879 by Assemblyman Mike Feuer, D-Los Angeles, and SB 509 by Senator Joe Simitian, D-Palo Alto. He proclaimed that the state was adopting “the most comprehensive green chemistry program in the world.”

The laws, which only took full effect this year, granted unelected chemical bureaucrats at the California Department of Toxic Substances Control the authority to regulate virtually every consumer product sold in California. In his typical grandstanding fashion, Arnold promised that all of these new regulations wouldn’t have any negative consequences on California’s job market.

“Right here at Nelson Nameplate, the company’s owners replaced toxic solvents with a more benign process,” Schwarzenegger said at the bill signing ceremony for AB 1879 and SB 509 in late September 2008. “Workers, neighbors and our environment were safer. And guess what? One of the great things is that it also proved that the company’s bottom line has improved because it saved on chemicals and expensive disposal.”

Did you catch that last part? These new regulations actually help “the company’s bottom line.” And Arnold isn’t the only person living in the magical land where regulations help businesses make money.

“We see this as a two-for-one initiative,” said Debbie Raphael, director of the California Department of Toxic Substances Control, in a July 2012 press release announcing the new regulations. “Public health and the environment benefit by lessening our use of toxic chemicals, and California companies get a significant boost into markets that are rapidly expanding.”

You read that correctly. According to state regulators, new government mandates help a company’s bottom line. Of course, the argument is absurd. If businesses could save money, they’d be changing their policies or manufacturing processes without the government stepping in with new mandates.

People can disagree about the benefit of new regulations—whether the greater public good outweighs the financial costs—but it’s completely disingenuous for the regulatory movement to argue regulations help companies make more money. No one wants companies dumping chemicals into a river, regardless of how much money it saves them. But, you can’t rewrite the facts. All regulations cost money, and sometimes the public health benefits are worth the cost.

The American Chemistry Council, the big bad business association that represents the nation’s largest chemical companies, has called state regulators’ bluff. The association isn’t calling for an end to the new Green Chemistry law; it’s simply asking the state to conduct an economic analysis in order to inform policymakers of the regulations true economic impact. If nothing else, it would expose regulators lies that new chemical mandates help businesses. Among the topics to be covered in such a report:

* Total statewide compliance costs  of the regulation;

* Total number of businesses impacted;

* Impact on small businesses;

* Number of businesses created and eliminated;

* Jobs created and destroyed.

Economic shortfalls

“The American Chemistry Council has been engaged in an extensive multi-year effort to help California construct a regulatory approach to green chemistry that fosters innovation and enhances public and environmental health,” the association said in a press statement. “It is imperative that regulators take into account the state’s ongoing economic shortfalls, and the obligation to ensure the new regulations do not impact job retention and growth.”

An economic analysis of the Green Chemistry regulations isn’t just common sense. It would also comply with state law. Consider this the part of the story that really drives home the point of California’s over-regulation. In 2011, Gov. Jerry Brown signed into law SB 617, which required state agencies to conduct a rigorous economic analysis before adopting any new regulations. Yes, a regulation to restrict more regulations.

Almost exactly one year ago, Brown heralded SB 617 as legislation that would “boost California’s economic competitiveness, bring greater fiscal stability to the state and reform the regulatory process to promote business growth.”

While Brown has failed to follow through on the economic impact study, more than a dozen state legislators are pushing for an in-depth look at California’s Green Chemistry law. According to the San Francisco Chronicle, State Sen. Michael Rubio of Bakersfield and 16 fellow Democrats sent a letter to Brown asking for an investigation of the economic impact of the regulations.

“It is without contention that the range and scope of these regulations is wide and can impact every manufacturer, business and consumer in California and beyond,” Rubio and his colleagues wrote.

The Democratic legislative effort was matched by Assemblyman Jeff Miller, R-Riverside, who serves as vice chair of the Assembly Committee on Environmental Safety and Toxic Materials. He believes that California’s Green Chemistry rules “could become California’s next regulatory train wreck and yet another business-unfriendly move by a state with shockingly high unemployment.”

“Some troubling details about how this happened: The initial statement of reason from DTSC justifying ‘green chemistry’ ran 200 pages.  The final regulations total 78 pages.  The economic analysis: four pages,” Miller wrote at Fox and Hounds Daily.  “This is fairly simple math and an indication of how far out of balance our regulatory system has gone.”

The public has until October 11, 2012 to register their public comments with the Department of Toxic Substances Control.

Check out an earlier CalWatchDog series on how California’s chemical regulations hurt the global economy:

Part I: California exports regulations worldwide

Part II: California’s Global Regulatory Regime