Will California 86 AB32?

There are reports seeping out of Sacramento these days like methane at the dairy farm that the State is looking for ways to slow down or postpone implementation of AB32 the California Global Warming Solutions Act.

For a while it seemed as if this was clever evasion to avoid stirring things up until the deadline for raising signatures for the Fall 2010 election ballot passed hoping that the proponents of a measure to repeal AB32 would fall short of their signature collecting goal.

Meanwhile, Governor Schwarzenegger has been preaching jobs, jobs, jobs as his highest priority to get California’s economy going again.  And there was a modest uptick in state tax collections offering a little hope that the worst was behind the Golden State.

But stuff happens!

The California Legislative Analyst Office released a report it had been trying desperately to avoid answering the demand by State Senator Dave Cogdill (R-Fresno) for an assessment of AB32 impact on jobs since the law is set for full implementation in 2012.  The LAO squirmed not wanting to be seen as attacking AB32 but his ten page report raised serious doubt about the impact of the implementation scoping plan[1] adopted by the California Air Resources Board and concluded that the net impact of the current plan is likely to be negative on job creation. You can read the report for yourself at the link below.[2]

CARB Scrambles

A scramble ensued with the California Air Resources Board chair Mary Nichols issuing a press release stating that AB32 will create 2 million jobs by 2020. [3] After a period of stunned silence the guffaws of laughter at this audacity of hope in the face of the LAO reality report laid bare the lie.

This was followed by CARB Plan B an updated AB32 scoping plan released March 24, 2010 by the agency which said that the goals of the California Global Warming Solutions Act can be met without adversely affecting the state’s recovery or long term economic growth. [4] In releasing the report, the CARB staff said it had worked closely with the Economic and Allocation Advisory Committee (EAAC) which Governor Schwarzenegger had appointed to assure that the agency did not ‘cook the books’ in its analysis. But the committee seemed strangely silent no doubt fearing anything they said would be turned into headlines they would regret.

California’s moonwalk away from AB32 has begun.

In an editorial in the Orange County Register March 30th, the paper said that Governor Schwarzenegger seemed to be getting the message that his #1 priority cannot possibly be jobs, jobs, jobs, when his #1 legislative accomplishment, AB32, is a jobs killer—at least in the current political environment. [5] Proponents of AB32 say they expect the auction of permits will raise $22 billion for the State—money it badly needs.  But opponents, according to the Orange County Register, allege the bill will cost California business more than $144 billion in higher costs overall.  If a ballot measure is fought over who you believe between those two numbers in the current economic climate AB32 is likely toast.

The newspaper said the Governor was looking for ways to compromise including changing plans for an auction of pollution allowances in favor of granting free allowances to the polluters with a very small token auction left over.  There was no confirmation from the Governor’s office about this report as yet.  But Schwarzenegger did tell CARB to slow down the implementation process and find a way to fix the carbon fees problem before it gets worse.


[1] http://www.arb.ca.gov/cc/scopingplan/document/scopingplandocument.htm

[2] http://www.lao.ca.gov/reports/2010/rsrc/ab32_impact/ab32_impact_030410.pdf

[3] http://www.arb.ca.gov/newsrel/2010/nr032410b.html

[4] http://www.arb.ca.gov/cc/scopingplan/economics-sp/updated-analysis/updated_sp_analysis.pdf

[5] http://www.ocregister.com/opinion/regulations-241621-global-warming.html

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