Obama Halts Enviro Regs, Will Brown?

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

At the end of last week, President Barack Obama ordered the
Environmental Protection Agency to defer new, strict standards on ozone
emissions. The lack of job growth brought about the decision. If the need for
jobs trumps the implementation of new environmental regulations for the
president, does the same apply to California and our governor?

While the Obama Administration claimed the decision to hold
off the regulation change was based on a need for updated scientific input,
many commentators could not help noticing the announcement came on the heels of
statistics that showed no job growth. A Wall
Street Journal editorial
stated flatly that the zero jobs growth "lies at
the center of this (the regulation deferral) startling and welcome decision."

Governor Jerry Brown has pounded the job creation drum of
late, announcing a new jobs czar. However, he is also conducting the green
energy symphony. Meanwhile, California is due to start rolling out regulations
for greenhouse gas controls in 2012 under AB 32, the Global Warming Solutions
Act.

That puts Brown on a spot. With California’s 12-percent
unemployment rate, the second highest in the nation, does he follow the
president’s lead and ease environmental regulations that will add costs to
business and slow the hiring of more employees?

Energy producers and many businesses have repeatedly said
more stringent standards would be too costly, slowing job growth and damaging
the economy.

If the Brown Administration is attempting to wrestle down
the unemployment rate shouldn’t the governor follow the president’s lead? We
are not talking about implementing provisions of Proposition 23 rejected by the
voters last year, which required AB 32 be suspended until unemployment dropped
all the way down to 5.5%. But, suspension of the law should be considered while
the state’s economy tries to get its footing.

During the debate over the costs related to AB 32, the
California Small Business Roundtable commissioned studies on the additional
costs to small business that might result from AB 32. The studies by Professors
Varshney and Tootelian of California State University, Sacramento were
controversial.

Examinations of the studies took place to critique and often
criticize the methodology and results. One
analysis
by UCLA professor, Matthew Kahn, a self-described 100% supporter
of reducing greenhouse cases, who also criticized an Air Resources Board cost
appraisal of AB 32, had the following notation in his critique of the Varshney
and Tootelian report:

One legitimate concern
about how AB 32 will affect California’s small business merits mentioning. If
California unilaterally enacts AB 32 and the rest of the nation enacts no
carbon mitigation regulation, then it is possible that California could lose
manufacturing jobs as they migrate to other states featuring laxer carbon
regulation.

Kahn dismissed the likelihood of this happening suggesting
that, California and the rest of the nation are highly likely to
have all enacted anti-carbon regulation.

Given the president’s recent declaration of putting jobs
before regulations, the question is whether the rest of the country will,
indeed, enact more regulation soon. Will California follow the president’s lead
and try to improve the job outlook or will the state continue to insist on
going it alone, whatever the consequences?

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