California can lead the world in combating climate change if we design policies that allow innovative and energy efficient manufacturers to grow in our state rather than other locations with cheaper, dirty energy. That’s why protecting and growing California manufacturing must be front and center in California’s next plan for emission reductions.
High energy costs now make it too easy for out-of-state companies to undercut California manufacturers, take away their customers and hurt jobs. Unlike California firms, out-of state companies can create and sell products with cheaper, dirtier energy while paying lower taxes and other costs of doing business. Shifting manufacturing growth to other states will cost jobs and increase emissions, hurting our most vulnerable communities and the environment.
This is a huge risk. California manufacturers now pay electricity rates more than 70 percent higher than the national average. We don’t know how much higher rates will be if we move to a 50 percent renewable requirement. Another proposal, to cut transportation fuel use by half, could increase manufacturers’ costs through the entire supply chain and delivery system.
The policies may spur new “green jobs” to grow in the state, but those numbers could be small compared to the thousands of manufacturing jobs that will be lost or not created in California if we burden manufacturers with higher costs. We already see California manufacturing investment rates and job growth much lower than other states with more favorable business climates.
We urge elected officials to add manufacturing growth to our climate goals. That combination will create a win-win for the environment and the economy. It will also ensure that other states follow our lead because everyone wants the high-wage middle class jobs that come with manufacturing.