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May 25, 2010 > LAO findings: jobs will leave the State

LAO findings: jobs will leave the State

By Assemblyman Dan Logue

At my request, last week the Legislative Analyst's Office released a report on the true costs of Assembly Bill 32 and its impact on California's economy. AB 32, the "Global Warming Solutions Act 2006," was passed in response to growing fears of global warming and rising sea levels. The bill essentially gave the California Air Resources Board (CARB) the authority to implement a series of extreme regulations reduce our carbon emissions to 1990 levels by 2020. This is truly a go-at-it-alone effort if there ever was one, far surpassing any green house gas regulations in place world-wide. These draconian measures will only push our already fragile economy over the edge and do little to combat actual climate change. It seems almost as if CARB has failed to take into account the 2.26 million unemployed and the growing exodus of businesses from California.

The LAO analyzed the damage our state will incur when trying to address the climate change issue alone. Their findings are alarming and give significant cause for reconsideration of continued implementation of AB 32 in this economy. It is crucial for all facts to be publicly available so California residents can make an informed decision for their future and that of our great state.

In their analysis, the LAO concludes California's economy will be negatively impacted if we continue to implement climate change-related policies not adopted elsewhere. By trying to stop global warming single-handedly, our relative prices for energy, such as electricity, will skyrocket. This, in turn, will create inflation in California, lower business profits, reduce production, income, and jobs. Imagine what that would mean for a state with a current unemployment rate of more than 12 percent.

AB 32's impact will be felt statewide. The effects might be "modest" in certain industries but for many others it will be devastating. As businesses that cannot provide "green jobs" flee to states with lower regulatory costs, they will take our jobs and state revenues with them. California's economy depends heavily on interstate and international trade, so is especially vulnerable to outsourcing and competition when prices start to rise. The LAO found that CARB's scoping plan has inadequate analysis of such leakages and costs associated with implementation. How can CARB (a board of non-elected officials) be given the power to enact the most severe environmental regulations known to date, without an accurate analysis of what it could mean for our economy?

California is not in a position to gamble with its future and the report's findings confirm what I have said all along. With our state's deficit at an all-time high, these senseless regulations threaten our hopes of economic recovery. AB 32 will increase costs state-wide and cause further havoc for already-struggling businesses.

Numerous studies rank California last in places to start a business in the US. It has the worst regulations and one of the highest tax rates of all the states. With a 12.6 percent unemployment rate and 2.3 million people without jobs, an economic recovery seems increasingly remote. AB 32 will be the tipping point to ensure that California, by going it alone, will never recover from its recession.

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