Concerns of the cost on business under AB 32, the California Global Warming Solutions Act, were expressed by the Legislature in passing the law. Yet, the California Air Resources Board (CARB), which implements the measure, did not grasp this mandate.
The law specifically charges that the intent of AB 32 is to reduce greenhouse gases “in a manner that minimizes costs and maximizes benefits for the California economy.” Yet, when CARB issued it economic analysis of AB 32’s Scoping Plan, the document was severely criticized by outside academics and the Legislative Analyst’s Office. The reviewers claimed that the report missed key elements in allowing the legislature and the public to judge the true cost of the measure. One response to the CARB analysis was critical of how cost-effectiveness was considered.
While CARB has agreed to re-do the economic analysis, a bill offered by Senator Bob Dutton, SB 295, would strengthen the requirement to look at economic consequences. Dutton’s bill would mandate that CARB do an additional peer-reviewed economic analysis by October 1 and report to the legislature by November 1 on whether changes should be made to the Scoping Plan based on economic consequences. The Legislative Analyst would also be required to opine on the revised analysis.
Business in California is teetering on the edge during these difficult economic times. Jobs are being lost in the small business world, which is the place that usually creates the most jobs in California. Small business particularly lives on the edge. Excessive costs to implement greenhouse gas reduction, while an admirable goal, could force some businesses to reduce jobs and even close.
While the Legislative is sincere in its goal of cleaning the air, we also believe it is sincere in protecting business from being subjected to excessive costs. Both goals can be achieved with a balanced approach based on fair economic analysis. That’s why SB 295 must be passed to support the goals explicitly expressed in AB 32.