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A Number of Californians Fear the Implementation of a Carbon Rationing System...

04/07/2010

Proponents of creating green jobs in California are currently pushing for state legislation that would enforce greenhouse gas emission cuts. The corresponding legislation, otherwise known as the Global Warming Solutions Act, would force California’s energy consumers to consume “25 to 30 percent less energy than they otherwise would have by 2020.”  With California’s unemployment rate currently at 12.5%, a growing number of Californians are becoming apprehensive about potentially being forced to adhere to legislation that would force them to substantially alter their energy consumption habits.

Reason magazine discusses what the proposed statewide carbon rationing legislation would entail:

The Global Warming Solutions Act (also known as Assembly Bill 32, or AB 32) would ration greenhouse gas emissions—forcing them back to 1990 levels by 2020—through a mix of policies including a cap-and-trade carbon market along with a set of complementary measures. Those measures include setting fuel efficiency standards for appliances and buildings, requiring that 33 percent of the state’s energy be produced from renewable sources, setting a low carbon fuel standard for vehicles, and zoning changes to discourage automobile travel, among other new regulations and mandates.

With 2.3 million Californians currently seeking employment, many are fearful that intrusive carbon rationing legislation would increase barriers to productivity, and would therefore shrink their chances of getting jobs. The California Air Resources Board (CARB), is the regulatory body that would oversee the operation of a cap and trade based system in California. This board is currently working to disseminate information that underscores the benefits of carbon rationing, green job creating legislation.

Regarding these proclaimed benefits, Reason reports:

The CARB best case analysis estimates that the new mandates and carbon market will actually increase employment slightly by 2020, and that per capita income will rise by 0.1 percent by 2020, or about $30 per person. In its worst case scenario, incomes would be reduced by 0.6 percent, or about $300 per capita.

Contrary to this analysis, global consulting firm Charles River Associates, projects the following estimates:

…the carbon rationing law will cost between 0.5 and 1.1 percent per capita by 2020, reducing personal incomes by $200 to $500. The cost differences between the two analyses arise largely from how they treat the mandates. The CARB report suggests that the higher energy prices faced by Californians will be completely offset by conservation and energy efficiency mandates embedded in the law because they force Californians to reduce the amount of electricity and fuel that they will use in 2020.

Although Californians are facing the imminent threat of the implementation of carbon rationing legislation, which many fear, would further setback California’s crippling economy, Reason reports that there is the potential that such legislation could be delayed. More specifically, Reason reports:

The AB 32 Implementation Group is seeking to put an initiative on California’s November ballot that would delay the adoption of AB 32’s carbon rationing scheme until California’s unemployment rate dropped below 5.5 percent.

The AB 32 Implementation Group is a coalition that represents many big and small businesses that are “vital to California’s economy.”

Ultimately, it is important that cap and trade legislation in California be blocked. Given the high rate of unemployment; given that the U.S. currently has no feasible energy alternative that could propel our economy to the degree that carbon emissions can, and given that there are still scientific uncertainties regarding the stratospheric effects of man-made emissions, it would be imprudent of California to adopt a stringent cap and trade system. Regarding the justification against implementing a cap and trade system at the national level, the same reasons apply.