California´s experiment with global warming regulations reminds me of a story about a foolish, old dog who lost his bone in the water when he tried to grab its reflection. Similarly, California´s leaders risk sacrificing the jobs and industries we have today on a hope and a prayer that the “green jobs” and “green industries” of the future will be better and more plentiful than those we already have.
When Governor Schwarzenegger signed AB 32, California´s Global Warming Solutions Act, into law more than three years ago, he declared that the sweeping new regulations imposed by the measure would be “good for business.”
Since then we´ve learned these regulations carry a multibillion dollar price tag and will be the largest tax increase ever imposed by unelected regulators in California —call it the “global warming tax.”
The Governor also promised that California would “create a whole new industry to pump up our economy, a clean-tech industry that creates jobs, sparks new cutting edge technology and will be a model for the rest of the nation and the rest of the world.”
Since those bold proclamations by the governor California has lost more than a million jobs. The only thing that´s been “pumped up” is our unemployment rate, which has soared from 4.8% to 12.5%, far higher than most other states.
Despite mounting evidence that the global warming tax will hurt California´s economy and cost jobs, the Governor continues to insist it will create jobs.
David Crane, the Governor´s economic advisor, explained on CNN last year, “we don’t have to keep the same jobs we had before” to get real job growth.
Their plan for job growth, apparently, is to create a vast array of government programs and subsidies that help one sector of the state´s economy and hope they offset job losses everywhere else.
So far the results have been less than convincing.
Green jobs compose less than one percent of California´s economy. That´s right, less than one percent. From 1995 to 2008, California added only 42,000 new green jobs. At that rate of growth, it would take 89 years for green jobs to replace all of the other jobs California has lost in the current economic downturn.
Even worse, economists warn that, rather than create a surplus of jobs, the global warming tax will kill up to 1.1 million more jobs in the future,.
Clearly, green jobs won´t save us. We need other jobs too.
Yet California´s high costs and hostile business climate are driving the very folks who create those jobs to other, more business-friendly states. Since 2000, California has lost more than 600,000 good-paying manufacturing jobs. Even green industries are choosing to expand outside California.
Business relocation specialist Joseph Vranich sees the problem firsthand. His full-time job is advising companies who want to flee California. He recently noted that no one is calling him to say they´d like to move to California, adding that businesses in California face a “coming financial tsunami from AB 32.”
Many companies that compete in the global marketplace don´t have the luxury of passing higher costs onto consumers.
Consider CalPortland Cement. As a result of AB 32, the company cancelled its California expansion plans and is considering expanding in Nevada instead. The company also recently laid off 100 highly paid workers when it closed its cement operations in Colton.
Steve Regis, vice president of engineering at CalPortland says, “We’re not like other companies. We simply cannot pass our cost on to our customers because we’re truly a world market. We compete with China, so we’re really in danger.”
Others see a reality that California´s leaders ignore. Arizona recently dropped plans to participate in a cap and trade system aimed at reducing carbon emissions. Some Utah legislators want to follow Arizona´s lead. Even federal lawmakers are backing away from a cap and trade proposal, citing economic concerns.
Governor Schwarzenegger should follow their lead and put the brakes on AB 32, California´s global warming tax. He should insist that regulators´ actions not hurt any sector of California´s economy, nor increase the food and energy prices consumers pay.
If we work together, there´s still time to bring common sense back to government and private sector jobs back to California. Perhaps we can even teach an old dog new tricks.