Manufacturers fear impact of new emissions target

[Source: Los Angeles Business Journal] The passage this week of Senate Bill 32 to implement stricter greenhouse gas emissions standards creates uncertainty for businesses and may lead to more businesses leaving California, said Dorothy Rothrock, president of the California Manufacturers & Technology Association.

That organization, along with other business groups and the oil industry, has opposed the bill, which the state Senate passed Wednesday following the Assembly’s passage Tuesday. The bill sets new targets for greenhouse gas emissions to 40 percent below 1990 levels by 2030.

That builds on previous legislation that already required California emissions to reach 1990 levels by 2020. That target was being reached largely through a cap and trade program overseen by the California Air Resources Board, and the new law puts meeting the revised requirements in that agency’s hands again.

However, how exactly the board will accomplish that, and what rules will be put in place, is unclear.

Already, Rothrock said, California being in the only state in the region with such emissions standards has led to some businesses relocating.

“It’s a very aggressive target, and this is not easy to do,” she said.

One criticism of the bill is that it didn’t address the state’s cap and trade program, through which businesses with emissions above the required level must pay those that were below the target. That program is facing a legal challenge by the California Chamber of Commerce.

At the same time, Rothrock said, an assistance program that helped businesses meet the standards that and softened the blow is set to end. The new target will make California businesses, which have been paying much more for electricity than those in many other states as well, even less competitive.

“During all of those years of high electricity cost, manufacturers… have embraced a lot of efficiency and reduction measures,” Rothrock said. “It’s not like there’s a whole lot of low-hanging fruit out there.”

Environmentalists and other proponents, however, say the new emissions goal will have a long-term benefit for the environment and can create jobs as well.

“Ten years after California took a global lead in committing to a clean-energy future, we have seen billions of dollars in investments flow into the state to spur a thriving clean-energy sector that has created hundreds of thousands of jobs. At the same time, emissions have been reduced,” the author of the bill, state Sen. Fran Pavley, D-Agoura Hills, said in a statement Wednesday. “Today’s action will ensure the state remains on its prosperous and healthy course.”

The legislature also passed a companion bill that requires greater legislative oversight of the Air Resources Board. Gov. Jerry Brown has said he will sign both bills.

Source: Los Angeles Business Journal
August 25, 2016