It’s not often you see California politicians agree on something, but nowadays there is undeniable unity on one issue: from small town city councils to the Governor’s office, everyone’s talking about the importance of jobs.

One glaring exception seems to be the California Air Resources Board (CARB), which is seriously considering  adopting  a cap and trade regulation that will destroy jobs and drive businesses and sorely-needed economic activity out of the state.

In a disappointing turn of events, CARB has changed policy direction and is now advocating imposing a fee for up to 10% of greenhouse gas (GHG) emissions allowances that it had previously signaled would be free to regulated entities such as manufacturers and energy producers.

That may not sound like much, but it could translate to millions or even billions of dollars. That means an increase not only in energy costs, but in the cost of food, manufactured goods, transportation, and much more.

Bear in mind that California’s businesses and families are already seeing dramatic increases in fuel and utility costs, due not in small part to our state’s renewable energy law which mandates a massive shift in where we get our energy.  Other rules on the horizon, such as CARB’s low-carbon fuel standard and alternative fuel outlet regulations to name just a couple, will pile on even higher costs.

The result is unavoidable:  higher energy costs and higher production costs translate to lost jobs and worsening competition from other states.

With California’s economy stalled in a prolonged recession and statewide unemployment at over 12% this is the worst possible time for CARB to even consider, much less proceed with, what amounts to nothing more than a new energy tax on every business and consumer in the state.

The California Hispanic Chambers of Commerce has been deeply involved in the policy process related to the implementation of AB 32, the state’s global warming law and the umbrella under which cap and trade is being formulated, for years.  Based on economic forecasts by independent experts and CARB’s own staff and advisors we have consistently asked for sector-specific details of the costs of the many policies under consideration to reach AB 32’s GHG reduction goals.

Too often we were told that the costs could not be accurately projected until specific policies were developed, but that there would essentially be no economic harm to families or small businesses.   It’s now evident that there are indeed costs and they indeed will have a negative impact on our economy, with small businesses, families and low income communities hit the hardest.

We were also assured that California would not be acting alone in its pursuit of GHG reductions, a key policy component since as CARB itself acknowledges, California acting alone can have no meaningful impact on climate change.  With respect to cap and trade, CARB has consistently maintained that a successful program would rely on the participation of the other states in the Western Climate Initiative (WCI).  Such a partnership would minimize leakage of jobs, revenues and – importantly – emissions.

Unfortunately, all of the other neighboring states in the WCI have suspended their cap and trade plans in order to protect their economies.  The federal government has likewise abandoned cap and trade, and just this week the Wall Street Journal reported that the European Union is considering scaling back its own carbon emissions reduction strategies if other countries do not follow suit.

These are unmistakable red flags that CARB seems at best not to have noticed or, at worst, ignored.

If California is to go it alone on cap and trade, it’s imperative that we do not do so in a vacuum.  CARB, as directed in the AB 32 legislation itself, must make every effort to contain costs and avoid leakage of desperately needed jobs and revenues.

Eliminating the new emissions tax from the proposed cap and trade regulation would be a good place to start.