For those that don’t operate a business in California like I do, I was surprised today to learn that Sacramento State College of Business Administration and Center for Small Business have complete a study of the AB32 Greenhouse gas law, and its impact on California small businesses.
The law requires that by 2020 the state’s greenhouse gas emissions be reduced to 1990 levels, a roughly 25% reduction under business as usual estimates. The California Air Resources Board, under the California Environmental Protection Agency, is to prepare plans to achieve the objectives stated in the Act.
Will I keep my business in California with a tab like that? Probably not. It would be economic suicide for me. – Anthony
California Small Businesses Face $50,000 Cost from State Implementation of AB 32
from PR-inside.com
A new study released today found that small businesses in California will pay an additional $49,691 as a result of the California Air Resources Board’s implementation of AB 32. Citing severe economic impacts, a coalition of small business organizations called today for the suspension of the regulatory proceedings to implement California’s greenhouse gas program until the report’s findings are analyzed
and mitigation measures are added to the state plan.
The report concluded that when the program is fully implemented, the average annual loss in gross state output from small businesses alone would be $182.6 billion, approximately a 10% loss in total gross state output. This will translate into nearly 1.1 million lost jobs in California. Lost labor income is estimated to be $76.8 billion, with nearly $5.8 billion lost in indirect taxes.
“We support the state’s efforts to curb greenhouse gas emissions, but we are very concerned that these costs will apply disproportionally to California small business. Consumers will be hurt and the environmental goals will not be achieved,” said Esteban Soriano, Chairman of the California Small Business Association and a founding member of the California Small Business Roundtable.
The analysis of the state Scoping Plan was led by Sanjay Varshney, Dean of the College of Business Administration, California State University, Sacramento and Dennis H. Tootelian, Ph.D., Professor of Marketing and Director, Center for Small Business, California State University, Sacramento. The study reveals that when the plan is fully implemented, California families will be facing increased annual costs of $3,857.
Varshney explained that the study’s cost analysis was based on the California Air Resources Board’s own findings, which revealed significant cost increases. The study’s findings are consistent with the Peer Review analysis that CARB commissioned, which also concluded that the cost of the AB 32 Scoping Plan would be significant, and that CARB had significantly underestimated these costs.
“Given California’s current economic plight, the state must refrain from imposing new fees on taxpayers to pay for an expanded bureaucracy,” said Michael Shaw of the National Federation of Independent Business. “When Assembly Bill 32 authorized this program in 2006, CARB promised to develop a greenhouse gas plan that would provide benefits to small business, not bankruptcy.”
The study also found that in order to cope with the increased costs generated by the AB 32 program, consumers will be forced to cut their discretionary spending by 26.2%.
“Californians will be getting less and paying more. How can the small business community survive in a political climate so determined to put us out of business,?” asked Griselda Barajas, owner of Tex Mex Restaurant in downtown Sacramento, where the study was released.
“Many lawmakers who enjoy our tacos will see a significant increase in their daily lunch bills if these problems are not addressed,” said Barajas. “All of the Capitol community folks who dine at Tex Mex will have to bear the burden of an unfunded mandate placed against my business.”
According to the authors, the study utilized IMPLAN, a widely used economic modeling program that has more than 1,500 active users in the United States and internationally. These include clients in federal and state government, universities, and private sector consultants. Joining the California Small Business Roundtable and the National Federation of Independent Business at Monday’s event were the California Hispanic Chamber of Commerce and the Sacramento Black Chamber of Commerce.
For a copy of the study, please contact Alison MacLeod at 916-225-6317 or amacleod@ka-pow.com : mailto:amacleod@ka-pow.com .
For California Small Business AssociationAlison MacLeod,
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“How can the small business community survive in a political climate so determined to put us out of business,?”
To the champagne socialist, those who don’t need to work for a living, small business people are the Kulaks of the Western world. Dirty laborers and always out to make a buck; dangerously independent and thus should be put down.
You nasty capitalist, you. Everybody should work for the government!
“We support the state’s efforts to curb greenhouse gas emissions, but we are very concerned that these costs will apply disproportionally to California small business. Consumers will be hurt and the environmental goals will not be achieved,” said Esteban Soriano, Chairman of the California Small Business Association and a founding member of the California Small Business Roundtable.
I can see where you went wrong, Esteban. Try this tack: “We do NOT support the state’s effort to curb beneficial gases that do NOT cause global warming in any case.”
As soon as they knuckled under to the faulty premise, they became a slave to Big Gummit Gone Wacko. The CSBA should have been fighting the entire pack of AGW lies from the get-go. Then they might have a leg to stand on today. As it appears now, they bowed down to the Alarmists but want special dispensation just for themselves. Makes them look selfish. Better to have stood up in the beginning instead of squirming under the boot they accepted meekly long ago.
We’re a manufacturing outfit, we’ll pay more I’m sure. At that rate, it’s not worth staying in California. I’ll talk to the CEO about it. Best to be proactive with these things.
Our company employs over 100 people in SoCal.
One question, do the cost estimates assume all the businesses will remain in CA? How many will just up and leave and how many will never come?
I think this California study is accurate. A National plan would probably cost just as much — and finalize our economic devastation.
I honestly believe that most legislators (at the State and Federal level) are mathematically illiterate. They don’t have a clue what these things cost. Or, they are crooked (the old “liar or fool” dichotomy).
“the study utilized IMPLAN, a widely used economic modeling program”
So you can guess how accurate that $49,691 figure is.
And why couldn’t they just round it off to ≈ $50,000 (or do they think their model is that accurate?).
Hmmmn.
Tennessee has no income tax = An immediate 10 percent increase in your take home pay. GA has about a 3% tax. Slightly smaller state & county sales tax down here though.
TN and GA and AL have lower gasoline taxes, no need for the expensive gasoline “CA special” mixes.
Got plenty of power.
What to do, watt to do?
Since this stupid legislation is creating an unfair disadvantage for California, the only obvious solution is to impose the same conditions on all states. Problem solved.
Why, it’s as if they WANT to destroy small business. Whodathunkit.
Part of the following is merely my speculation as to thought processes and motives of others. The facts are true.
The year was 2005, George W. Bush had just been re-elected and inaugurated for his second term as President, and the U.S. was not about to ratify the Kyoto Protocol to curb CO2 and other greenhouse gases. The Democrat party was in disarray. It was by no means certain Democrats would win the White House in 2008, and in any event Hillary Clinton was the leading candidate. It was even less certain that the country would elect a woman, especially Ms. Clinton with all the baggage she carries. The President, Bush, would not sign a climate change bill even if one was presented for his signature. Given these premises, certain Democrat state legislators in California took matters into their own hands, writing and passing AB 32, California’s Global Warming Solutions Act of 2006. It took until 2006 for final passage and signature by the Governor.
The global warming scientists at the IPCC had painted a dire picture for Democrats to absorb, including rising sea levels causing massive flooding, increased temperatures leading to glaciers melting and Sierra snowpack disappearing, and public health disasters related to increased temperatures. All of these predicted disasters were blamed solely on increasing CO2 in the atmosphere, which they said increases global air temperatures. California Democrats in the legislature were convinced, at least enough to vote for AB 32. In addition, curbing CO2 through a variety of measures laid out in AB 32 was stated as being good for California’s economy, would increase jobs, and would put money in every Californian’s pocket.
Unfortunately, little of that was true then, and certainly not true now. The evidence shows that in 2005, global air temperatures had been rising for around 20 years, but had leveled off. Sea levels at San Francisco had dropped dramatically from 2004.
In just four years, 2005 to 2009, the global air temperature has dropped further, to within 0.1 degrees of the 1979 value. Sea levels offshore San Francisco continue to drop. The predicted California heat waves that cause electrical blackouts have not happened since September, 2007. The exact cause of the decline in air temperatures globally is subject to debate. Some attribute the cause to a quiescent sun, with very few sunspots. Others name a cyclical shift in ocean temperatures, both in the Pacific and Atlantic Oceans. Some point to volcanoes, but there have been no major eruptions in the time frame. What is beyond dispute is that CO2 has continued to increase in the atmosphere. The crucial causal link between CO2 concentration and global air temperatures just does not exist. No one of intelligence can dispute that.
Nationwide, we have seen one of the coldest winters ever, and just this past week there was unseasonable and rare snow in June in the northern Sierras. Temperatures in Southern California are below average for the month of May, with cold rain falling the first week of June.
Where does that leave us? We are faced with draconian changes to the California economy from AB 32 mandates, to name only a few: Low Carbon Fuel Standard, Renewable Portfolio Standard, Cap and Trade, plus 70 others identified by California’s Air Resources Board. Yet we have incontrovertible evidence, as stated earlier, that CO2 reductions will do nothing to change global air temperatures.
The benefits of AB 32, when all its requirements are implemented, are projected by ARB to be a measly $4 per week in every Californian’s pocket. On such a slim improvement, is it prudent to disrupt markets in such a far-reaching and massive fashion? Meanwhile, expert economists who studied AB 32 and its Scoping Plan in great detail concluded the entire AB 32 is flawed to the core. One telling statement, by ARB, is that for every dollar invested in AB 32, two dollars will be returned. Yet, many of the requirements have no dollar return, and for those that do have a return, ARB will not state how many years must pass for those two dollars to show up.
Of course, the answer must be NO. It is time for Californians to face the facts, and stop AB 32 before more damage is done to the economy. This is a time of great financial upheaval in California, with one $42 billion budget deficit recently staved off but at a very high price including higher taxes and borrowing. Not even six months later, the state faces a $26 billion deficit that is unlikely to be solved. Additional burdens on businesses, industry, and residents as imposed by AB 32 will kill California.
AB 32 must be repealed, and repealed now.
I posted the above to my blog on June 7, thus the reference to snow in the Sierras is accurate. — RES
Thank you, Anthony, for posting this. The following is a link to op-ed written in Dec. 2007 that suggests any major land-use decision made by any local or county body in California, can be challenged and regulated according to AB 32.
The prospect of this happening is to me, as a builder, discomfiting to say the least.
http://www.signonsandiego.com/uniontrib/20071213/news_lz1e13lowe.html
As a matter of environmental responsibility, the last one to leave California should turn out the lights.
I drilled down on the link to get a bit more info. Arnie sure was proud of this POS when he signed it in 2006. How’s that workin’ out for ya Arnie? Still grinnin’? http://gov.ca.gov/index.php?/press-release/4111/
Not wanting to divert the thread, but on the general subject of transaction/compliance/excessive costs, here is a piece from “World Nuclear News” of 10 July 2009.
“US nuclear utilities challenge waste fees. US nuclear utilities have written to Energy Secretary Steven Chu asking him why they should continue paying some $770 million annually towards the Yucca Mountain waste repository, since the project has now been put on hold and no alternative has yet been proposed. Utilities pay 0.1 cents/kWh into the national nuclear waste fund, which also gets over $1 billion per year in interest. The Nuclear Energy
Institute has written to Chu on behalf of its members to “express its deep concern about the federal government’s failure to fully carry out the statutory obligation to implement the nuclear waste policy established almost three decades ago in the Nuclear Waste Policy Act of 1982.” This required the Department of Energy to take over all used fuel and dispose of it
from 1998, funded by the levy on electricity production.”
I guess you can see parallels happening to small business in California.
Here is where it goes wrong Anthony:
“We support the state’s efforts to curb greenhouse gas emissions, but…”
The message must be clear:
As CO2 is a gas of life, not a pollutant and climate on earth is subject to natural cycles we demand:
1. Freedom of fuel choice.
2. No qualification of CO2 as a pollutant.
3. No restrictions on CO2 emissions
4. No CO2 regulation by EPA under the Clean Air and Clean Water Act.
5. No regulation via the backdoor by adopting the existing Montreal Protocol
6. No CAP & TRADE
If AB32 will cause the elimination of 1 million jobs in California, I am very curious how many jobs will go in the entire USA.
If the Senate in it’s unlimmited wisdom would make the mistake of passing the Waxman Climate Bill, millions of Americans will lose their jobs.
AB32 will kill California.
This madness has to be stopped.
(I belive this may be somewhat OT, but the message it provides is very relevent to “this topic”.)
An economics professor at a local college made a statement “that he had never failed a single student before, but had once failed an entire class”.
(Author Unknown, but his comments are “right on”}
——————————————–
That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, “OK, we will have an experiment in this class on Obama’s plan”.
All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.
After the first test, the grades were averaged and everyone got a B.
The students who studied hard were upset and the students who studied little were happy.
As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little. The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.
The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.
“Could not be any simpler than that”.
There is no more good news. Only approaching darkness.
OT, but check this out…
http://people-press.org/report/528/
Attitudes of scientists/engineers vs the public. It makes for fascinating reading, and hopefully when Anthony puts it up, fascinating discussion. As a PhD Engineer, I’d love to hear what the folks here think about it…
At the rate the state government of California is committing economic suicide by playing politics with the budget now they’re contemplating more carbon taxes… LOL Soon there will be nobody left in the state to tax. Serves the idiots in Sacramento right.
Come on!!! No one ever hear of SNOPES????
http://www.snopes.com/college/exam/socialism.asp
Much as I love the story – it stank like an urban legend the minute I read it (sorry for the mixed metaphor there!!!!)
Joe Romm on Climate progress says less than the cost of a cup of Joe a day. I knew he wasn’t telling the truth.
I suspect he does also. The 300 dollars a month for a household is very difficult.
I am really surprised there is no mass exodus out of California. Yet according to census estimates, California gained about 379,000 people between 2007 and 2008. Only Texas gained more people. The states that added the most people are Texas: 483,000, California 379,000, and then a BIG drop off to North Carolina 180,000, Georgia 162,000. Here is the point of that, how is the population of California increasing by so much despite the stupidity of Sacramento? I realize you have illegal aliens and natural births and California is huge. I also realize California has great weather and is beautiful. But why aren’t people leaving for more sane places?
Does anybody know why California keeps gaining so many people despite high taxes, high prices, and stupid fact-less restrictive legislature? Why would anyone choose to live with that?
But if it does happen, it is a vicious cycle hard to break. A region is either growing or dying. Look at Michigan. Michigan is screwed. UAW and the Big 3 refused to adapt to the new economy and now Michigan is screwed. When I watched the Final 4, all I kept hearing was how if Michigan State won how it would help the economy. Please, a basketball game won’t help deprecated businesses.
Well, unless California changes, it will become Michigan. $50,000 from a small business. That is more money than I make with my business. If that was levied against my business, I would have to double my costs. Many small businesses would do that same, and big business would raise prices too. It won’t take businesses long to see greener grass in hot dry Nevada, New Mexico, or cool Oregon.
California WAS a nice place to live. Until some idiots screwed things up so bad that the beautiful weather couldn’t make up for it.
I see no reason whatsoever to reduce “greenhouse” gasses. There is no evidence they are causing a problem of any sort.