Global Warming Solutions Act might create more problems for businesses

Paul Roundtree

According to the Legislative Analyst’s Office, the 2006 Global Warming Solutions Act might have a negative impact on California’s jobs.

Any action strong enough to force the significant changes we’re looking for will probably have negative economic side effects. But forming the most accurate forecast possible can still help us avoid any nasty surprises.

In a letter to state Sen. Dave Cogdill, R-Modesto, the LAO raised some disconcerting questions about the implementation plan, specifically concerning the methods used to come up with their economic forecast and the projected figures for the job market.

Mark Newton, director of resources and environmental protection for the LAO said, “It was a response to a focused question … Have they done the appropriate level of analysis to support their decisions?”

According to a poll by EMC Research, the majority of California voters are worried about the act causing further job loss. That’s understandable when unemployment in California is already at 13.2 percent, according to figures from the Bureau of Labor Statistics.

Assembly bill 32, the Global Warming Solutions Act, is a great move against global warming because it requires the California Air Resources Board to formulate a 10 year plan for reducing the state’s emissions to what they were in 1990.

However, the LAO said the large macroeconomic models used by the California Air Resources Board are more suited to analyzing broad economic sectors, industries and markets rather than households or firms.

Also, the industrial sector data is taken from the national level and can only approximate California’s economy.

The information was also adjusted to 2003 and does not reflect changes from the recent recession or housing market turbulence.

According to the LAO, to get a clear picture of the real economic effects, it is crucial to understand how sensitive the figures are to “different alternative reasonable assumptions.” But relatively little of this has been attempted, even for conditions that might entail significant unemployment.

It’s unnerving to think that a state agency would either do a slipshod job or skirt any facts, especially on something this important.

Tim Hodson, director of the Center for California Studies at Sac State, said AB 32 is “internationally groundbreaking.”

Gov. Arnold Schwarzenegger called it “first in the world.”

It has gained enough outside interest and support that government representatives from Canada, Japan and New York were present at the signing ceremony; former British Prime Minister Tony Blair attended via satellite.

The Global Warming Solutions Act is a step in the right direction, but I’m disappointed that the agents responsible for this bill were not preparing it thoroughly enough.

Paul Roundtree can be reached at [email protected]