AB 32: Now — now!!! — L.A. Times warns it imperils economy

AB 32: Now — now!!! — L.A. Times warns it imperils economy

March 5, 2013

By Chris Reed

ab32-banner-lmoreSeven years ago the California Legislature passed AB 32, the Global Warming Solutions Act of 2006, a landmark law forcing California to shift to cleaner-but-costlier forms of energy by 2020 to reduce the emission of the gases believed to cause global warming. The assumption was that, as it had with so many other environmental regulations, the Golden State would inspire the world to follow our lead.

There were cautionary voices. Gov. Arnold Schwarzenegger told lawmakers he wouldn’t sign the bill unless it gave a future governor the option to suspend its enforcement in times of economic distress. This amounted to an acknowledgment of a basic fact: California’s economy would be at risk if the state forced the cost of energy to go higher, requiring businesses to pay more for a large basic budget item than their competitors in rival states and nations. The Golden State needed others to follow our lead for our policy to make economic sense.

But soon after, Schwarzenegger’s legacy hunt revved up, and he saw the opportunity to be Al Gore’s successor as a pin-up of global environmentalists. When California’s economy went into its deepest recession in 70 years, instead of invoking his executive authority to delay AB 32’s implementation, the governor began asserting that AB 32 amounted to a job-creation measure. This was talking point No. 1 of the Schwarzenegger administration for years.

The expects trashed the AB 32 happy talk

To say this was dubious is an understatement of immense proportion. A “peer review” of the California Air Resources Board’s upbeat analysis of AB 32’s economic impact released in late 2008 scorned the report as painting a rosy scenario. A specific warning noted the risks to manufacturing in California because energy played such a huge role in cost of operations.

stavinsOne of those peer reviewers — Harvard’s Robert Stavins, perhaps the world’s leading environmental economist — shredded the happy talk from the air board (and implicitly from others) in a memorable January 2009 interview with Stephen Moore of the Wall Street Journal.

“None of us knew who the other reviewers were, but we all came up with almost the same conclusion. The report was severely flawed and systematically underestimated costs,” said Stavins, who chaired the U.S. EPA’s economic advisory committee during the Clinton administration.

Stavins asked a common-sense question: If this approach were such a job-creator, why would it have to be imposed on private industry?

But instead of heeding Stavins, his fellow peer-reviewers and common sense, the Los Angeles Times made an extremely curious journalistic decision. In its news pages, it either downplayed the possibility that AB 32 could backfire enormously, or treated the question as hotly debated, with experts on both sides. On its editorial pages, it usually treated the will-AB-32-backfire thesis as partisan rhetoric, exaggerated or flat-out wrong.

Never was this more evident than in its coverage of Proposition 23, the 2010 state ballot measure that sought to roll back AB 32 until unemployment was 5.5 percent or less for four quarters in a row.

The savaging of Prop. 23

Prop. 23 amounted to a straightforward extension of economists’ no-duh critique: Higher energy costs put California at a competitive disadvantage, and we shouldn’t want to dig ourselves a bigger hole with unemployment at the time already above 12 percent — far higher than the national rate.

But to the editorial board of the Los Angeles Times, Prop. 23 was nothing more than psycho Texas-style policy extremism. This is from the LAT’s Sept. 28, 2010 editorial:

“In 2006, taking a brief hiatus from the usual Sacramento gridlock, the Legislature passed and Gov. Arnold Schwarzenegger signed AB 32, a pioneering law designed to reduce California’s greenhouse gas emissions to 1990 levels by 2020. This year, a proposition that aims to kill the law was put on the Nov. 2 ballot by two Texas oil companies with a lot at stake. The cynical, misleading argument the companies are using to make their case is that AB 32 will deter job growth at a critical moment in the state’s economic recovery.

“Proposition 23 would suspend AB 32 until the state’s unemployment rate falls to 5.5% or below for four consecutive quarters. Backers insist that this wouldn’t negate the law because the rate is achievable — joblessness hit that mark just four years ago. Yet a global recession, which had nothing to do with California’s environmental standards, caused statewide unemployment to skyrocket to 12.4%, and it will take many years to recover from such a severe economic blow. Because meeting AB 32’s 2020 deadline requires immediate action, delaying implementation by even a year could render its goal impossible.

“Of course, the question of most concern to voters is whether AB 32 would worsen joblessness and slow the state’s recovery. Supporters and opponents of Proposition 23 draw on studies that reach opposite conclusions; the yes side says AB 32 would cost the state 1 million jobs, while the no side says it has already led to the creation of 500,000. We’re not convinced by either. The economic impact of AB 32 will depend on how it’s implemented by regulators, as well as variables outside anyone’s control or ability to forecast.”

Higher energy costs aren’t necessarily bad, you see, if you have enlightened regulators.

The Times channels Emily Litella: ‘Never mind.’

Now comes a moment that simultaneously brings to mind George Orwell, Emily Litella and the ninth season of “Dallas”: “We’ve always been at war with Eastasia.” “Never mind.” It was all a dream.

In Monday’s Los Angeles Times, the paper gave high-profile play to an 1,100-word analysis of AB 32 by reporter Anthony York. Six years and six months after the passage of AB 32, and four years and four months after the release of the peer review savaging the happy talk about AB 32, York treated as a given that the critique of Robert Stavins — and of Prop. 23 supporters — was accurate.

“When Gov. Jerry Brown called on his fellow governors at a conference in Washington last week to embrace a California-style pursuit of cleaner air, he was doing more than reinforcing the state’s image as an environmental trailblazer. He was trying to protect its economy.

“Brown needs other states and the federal government to adopt key elements of California’s environmental agenda, such as reaping more energy from renewable sources and capping greenhouse gas emissions, if those programs are to be successful here.

“The state’s aggressive pursuit of environmental goals has provided a new impetus for green jobs and federal subsidies. But the programs are costly to businesses, raising the price of their energy and forcing them to upgrade to cleaner manufacturing technologies.

“If others don’t go green, California could become an outlier, saddling businesses with costly new power while neighboring states continue to use traditional, cheaper energy, experts say. If the efforts under way in California spread to become the new normal, however, all will benefit from economies of scale.

“If more states order power companies to limit their use of fossil fuels, for example, the incentive will grow nationwide for firms to develop cheaper alternatives, leaving California consumers less exposed to spikes in electricity rates.”

Journalistic irresponsibility on an epic (fail) scale

So California’s leaders enacted a law that puts our industries and jobs at sharp risk unless other states copy us, and other states aren’t following us. And the most powerful newspaper in California refuses to acknowledge this basic fact until 78 months after the law was enacted?

Given the economic pain this state has gone through, this isn’t just a minor journalistic faux pas. This is epic in its irresponsibilty.

If reverse Pulitzers were given for coverage of a major issue, the Los Angeles Times’ coverage of AB 32 wouldn’t just be the winner. It would be recalled as the 1927 New York Yankees or the 1996 Chicago Bulls of horrible journalism.

Or, as the kids say, epic fail.


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  1. The Modified Ted Steele Methodologies (tm)
    The Modified Ted Steele Methodologies (tm) 5 March, 2013, 06:51

    Not just “the kids” say “epic fail”. I say it alot re rex the Poodle and his playmates. By the by…..where are the dunces? Back in the unit for more shock therapy? In Jail again? On vacation to visit the Bun Boy ™ and world’s tallest thermometer in Baker?

    0 for 14 ™

    Reply this comment
  2. CJ
    CJ 5 March, 2013, 07:34

    As a “business in formation” I am looking for a place to call home. I left California several years ago knowing that it was not the right place to startup. One of my projects is researching the migration trends using U-Haul rates as a trend indicator based on the simple principle of supply and demand.

    From what I have found, people are leaving Northern California. To what degree AB 32 is responsible is hard to tell though anecdotal evidence suggests it is a part of the motivating factors.

    Here is a video with a summary of results


    My next analysis is scheduled for the middle of this month.

    Reply this comment
  3. Dyspeptic
    Dyspeptic 5 March, 2013, 09:38

    Theodore, I’m impressed with your knowledge of the states obscure points of interest. However, you got the name wrong. It’s actually The Alan Cranston Memorial Rectal Thermometer in the lovely metropolis of Baker.

    Reply this comment
  4. Marc
    Marc 5 March, 2013, 10:19

    I think we quit buying the la times around 2007, lucky me….

    Reply this comment
  5. Ted Steele, Navigator
    Ted Steele, Navigator 5 March, 2013, 13:11

    Pretty funny Dysphoric—I miss Cranston.

    Reply this comment
  6. us citizen
    us citizen 5 March, 2013, 14:18

    There is no such thing as global warming! This is more BS from a govt that wants to tax you more.

    Reply this comment
  7. Bill - San Jose
    Bill - San Jose 5 March, 2013, 18:37

    We knew AB32 was going to be a problem when they were going to try to have us smog our propane forklifts.

    Next unnecessary effort to save the world since they failed to do so with MTBE which caused tens of thousands of fuel tanks to be swapped out and it still didn’t help stop a cancer causing agent like MTBE from getting into the water (we swapped out 40+ of these locally).

    Reply this comment
  8. Ronald Stein
    Ronald Stein 6 March, 2013, 06:18

    What melted those old glaciers?

    2 million years ago an ice age occurred, covering much of our lands. 20,000 years ago, the glaciers melted.

    The Grand Canyon and Yosemite, just to mention a few of our majestic and awe-inspiring national treasures were formed by those melting glaciers.

    Humans and industrialization are the purported cause of today’s CO2, but in the ancient past there were no humans on the planet nor human driven industrialization.

    Our lifestyle has become dependant upon the chemicals and by-products from crude oil that drives other industries such as agricultural, pharmaceuticals, medications and medical supplies, processed foods, cosmetics, plastics, automotive parts, asphalt for roads, computers, iPhones, etc.

    Going green puts emphasis on photovoltaics and electric vehicles, two high-cost alternatives that receive extensive subsidies from federal and state governments.

    Solar and wind may be attractive alternative sources for electricity, but neither can manufacture the chemicals and by-products out of crude oil that drives the majority of industries that are the foundation of our quality of life and our economy.

    Reply this comment
  9. Tom Tanton
    Tom Tanton 7 March, 2013, 08:45

    I’d like to know when LAT will be extending a formal apology to my colleagues and I, as LATimes personally attacked us during Proposition 23 (and earlier when AB32 was first being debated.) Is that too much to ask? 🙂

    Reply this comment
  10. bobaran
    bobaran 7 March, 2013, 10:01

    Several years ago I attended one of the CARB public meetings regarding diesel emissions from heavy off-road equipment. One gentleman named Mr. Downs had allowed CARB to test prototype add-on emissions filters on his heavy equipment. The CARB staff so blatantly misrepresented the results of that test that Mr. Downs stood up right in the middle of the hearing and screamed that they were lying.

    There were probably more than 200 people in the meeting and most of those in attendance testified to the serious economic hardships that would result from AB 32 regulations. One of the few who spoke in favor of the regulations was a representative of a company who stood to make considerable profit selling the soon-to-be-mandated particulate filters. He acknowledged that there were serious problems with the filters, but he was “confident” they would eventually get them right. He was loudly booed by the audience.

    After the close of public comment, one of the CARB board members asked the senior staff representative to respond to the many comments that the regulations would create economic ruin. The staff member replied that there would be cost increases, but “the businesses could simply pass those costs on to the consumer”. People in attendance gasped.

    AB 32 and the whole global warming/climate change fiasco is, without a doubt, the greatest scam ever perpetrated. My question is whether there is a single member of CARB who ever worked for anyone other than government or the environmental conflict industry?

    Reply this comment
  11. Jeff Lassle
    Jeff Lassle 7 March, 2013, 22:25

    I would like to second Tom Tanton’s request for an official appology not only from the LAT but from CARB considering the incredible lies and distortions perpetrated onto those of us who fought hard to speak what could only be called the obvious. I have read Tom’s brilliant analysis of the grave economic consequences of the 2006 law only to see a blatant attack by the LAT and CARB against what is now known as the facts. The failed DDT and spotted owl issues of the past pale in comparison with this over the top misrepresentation and epic failure of the science and economics perpetrated by an out of control bureaucracy called the California Air Resource Board and activist legislators in Sacramento, not to mention egregious and powerful environmental groups prostituting themselves in Sacramento in the name of greed and power. We who were ridiculed by the LAT and CARB staffers and government activists certainly deserve an official appology by the perpetrators of this incredible scientific and economic swindle. It is the least they can do other than return the vast fortune that was taken from the citizens of California.

    Reply this comment
  12. Ronald Stein
    Ronald Stein 9 October, 2014, 14:54

    Suggested reading would be the Wednesday October 8, 2014 edition of the Orange County Register.
    Throwing state’s economy under the bus http://www.ocregister.com/articles/california-637860-costs-economy.html

    Reply this comment

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