Cap and Trade Deal Will Raise Costs, Hurt Small Businesses

Tom Scott
CA Executive Director, National Federation of Independent Business

California has a full-time legislature with more staff than any other state in the nation, but for some reason, Governor Brown and the Supermajority Party have made it a habit of reserving large, sweeping public policy actions for private closed-door deal making and rushed votes before arbitrary deadlines. The $15 minimum wage hike, the gas and car tax hikes, the gutting of the elected Board of Equalization, and now the extension of Cap and Trade have all been dropped into bills and rushed to the governor in mere days with nearly no input from small business owners. Is this the new normal?

In a statewide survey to our small business owners in 2014, 91% of NFIB members said they do not support increased fuel costs as a result of California Cap and Trade policies. Whether the increased fuel costs are 45 cents per gallon under AB 398 or some higher amount under the alternative ‘command and control’ scheme by CARB, struggling small business owners have been clear: we must reject bad public policy and not settle for Cap and Trade lite.

If enacted, AB 398 and AB 617 would put us on track for one of the most regressive and expensive legislative sessions for small businesses and all taxpayers. California has been experimenting with Cap and Trade policies for a decade, and now we have the opportunity to step back and ask if we should be standing alone in the nation on aggressive environmental policy when jobs are moving to neighboring states with much more relaxed laws. We cannot attack our business climate in exchange for little to zero net benefit to our environmental climate.

Some believe Cap and Trade only impacts big businesses that buy and sell carbon credits, but the truth is that small businesses and consumers all pay the ultimate price of higher energy costs to produce and deliver goods. We should be doing everything in our power to lower the cost of doing business and the cost of living in this state, but AB 398 and AB 617 double down on bad environmental policy and make us even less competitive for good-paying jobs.

This Cap and Trade deal has been crafted behind closed doors and is being rushed to the Senate floor with zero policy committee hearings and no analysis. NFIB and our 22,000 small business owners across the state urge the legislature to reject AB 398 and AB 617 to allow for a more healthy, transparent public policy discussion while protecting small business owners and working-class families.

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