Proposition 23 on the Nov. 2 ballot would delay implementation of California’s Global Warming Solutions Act of 2006 (Assembly Bill 32). A recent study from the California Small Business Roundtable deals with the economic costs of that legislation.
The Cost of AB 32 on California Small Businesses argues that such legislation would result in a total loss in state output of $182.6 billion annually, which translates to a loss of 1.1 million jobs statewide. For their part, proponents of the bill tout gains from energy efficiency and green jobs. On this theme, the experience of other countries is worth considering.
A study published by the Juan Carlos University of Madrid, and backed by the Spanish government, found that for every green job created, 2.2 jobs were destroyed in other sectors of the economy due to redirected resources. The study concluded that “the Spanish/EU style ’green jobs’ agenda now being promoted in the U.S. in fact destroys jobs.”
In Italy, each green job cost 6.9 industrial jobs and 4.8 jobs across the entire economy. Even green jobs such as a solar panel manufacturing are predominantly located in China where labor is cheap, energy cheaper, and emissions regulations lax.
Implementing rigorous legislation in an effort to reduce our own nation’s emissions and effectively pushing manufacturing-intense industry to higher-emitting places like China may actually be more detrimental to the global environment than maintaining those jobs on American soil. This damages the U.S. economy, exacerbates greenhouse gas emissions worldwide, and begs the question of whether, comparatively, any American job is a green job.
The Global Warming Solutions Act of 2006 calls for a reduction in greenhouse gas emissions in California to 1990 levels by 2020, with the end goal of obtaining an 80 percent reduction by 2050. The measure fails to address comprehensively the negative consequences of increasing domestic energy costs. That, however, is far from the only problem with AB 32.
Environmental regulations should be based on the best science, not speculation or dogma. Voters should recall that the scientific debate on climate change is far from settled. See, for example, Dr. Roy Spencer’s The Great Global Warming Blunder: How Mother Nature Fooled the World’s Top Climate Scientists (New York: Encounter Books, 2010). See also Patrick J. Michaels and Robert C. Balling, Jr., Climate of Extremes: Global Warming Science They Don’t Want You to Know (Washington DC: Cato Institute, 2009); and A. W. Montford, The Hockey Stick Illusion: Climategate and the Corruption of Science, (London: Stacey International, 2010).
Beyond the scientific considerations, it is dangerous to assume that one piece of legislation in one U.S. state can solve what purports to be global problem. It cannot, and on the economic front, there is little room for doubt. Unemployment in California is now a record 12.4 percent, and the state economy remains in recession.
AB 32 imposes high costs up front and promises payoffs that are delayed and uncertain. Instead of implementing such a regulation, California would benefit from considering the green-jobs experience of Spain and Italy in terms of overall job loss. In California’s fragile economic state those could prove to be downright catastrophic.
A version of this article appeared in the San Francisco Examiner.