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Business Groups Warn California’s Climate Law Will Increase Costs

solar panelsCalifornia, which now has the most aggressive carbon reduction targets in North America, will impose stricter limits on emissions from factories, power plants and vehicles under legislation signed yesterday by Gov. Jerry Brown.

The pair of bills, SB 32 and AB 197, requires the state to reduce carbon emissions 40 percent below 1990 levels by 2030. California’s earlier climate change law, AB 32, mandated a statewide reduction in carbon pollution to 1990 levels by 2020.

It won’t be an easy task for the world’s sixth largest economy, which is expected to grow from 38 million people now to 44 million by 2030 while drastically shrinking its carbon footprint.

Business will likely face more restrictive rules, the Los Angeles Times reports.

Shawn Yadon, CEO of the California Trucking Association, told the LA Times that the state’s existing climate regulations are a big business expense, and the new law will require even more spending. “It’s very clear that it’s going to require new tech and new fuels,” he said.

The new legislation will “impose very severe caps on the emission of greenhouse gases in California, without requiring the regulatory agencies to give any consideration to the impacts on our economy, disruptions in everyone’s daily lives or the fact that California’s population will grow almost 50 percent between 1990 and 2030,” the California Chamber of Commerce said in a statement.

California manufacturers already pay higher electricity, natural gas and transportation fuel costs compared to the national average, said California Manufacturers and Technology Association president Dorothy Rothrock, warning the new law puts “manufacturing jobs and investments at risk.”

“Setting a dramatic, new GHG emission reduction goal without providing cost-effective and technologically feasible options as were required in original AB 32 legislation contributes to an already challenging business environment for manufacturers,” Rothrock said in a statement. “Lawmakers should get back to work immediately to ensure that we can achieve the SB 32 goal while protecting California jobs and the economy.”

The Western States Petroleum Association also opposed the climate bill.

At least some businesses, however, support the climate change legislation.

Last month a coalition of 177 businesses — among them Levi’s eBay, The North Face and Gap, Inc. — organized by Environmental Entrepreneurs (E2), sent a letter to California lawmakers urging them to support the bill.

“In the 10 years since AB 32 was voted into law, California’s clean energy economy has grown faster than any other state in the country and has attracted $27 billion in private equity capital, funding cleantech companies that have created over 500,000 California jobs,” the letter said.

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4 thoughts on “Business Groups Warn California’s Climate Law Will Increase Costs

  1. There is no cost increase, just a partial and belated clawback of the countless damages inflicted upon the state by the laissez-faire industries.
    You pay now, or you pay later, and this is later.

  2. When have business groups ever not denounced environmental regulations? The Louisiana floods are projected to have an economic impact of $15B+. The latest CA drought cost us $2.7B with 20K+ jobs lost. The economic impact of environmental degradation will rise exponentially and only those driven by short-term interests could view this development as anything other than an absolute necessity. I applaud our Governor for doing the right thing.

  3. Increasing natural gas energy efficiency will reduce global warming and CO2 emissions and if done really well will also help to conserve water, and the utilities will pay 50% of the costs.
    For every 1 million Btu’s recovered from the combusted exhaust and utilized, 117 lbs of CO2 will not be put into the atmosphere. Compare that to other energy saving methods.
    In every 1 million Btu’s of combusted natural gas are 5 gallons of recoverable distilled water, and this water is very useable.

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