Will Unemployment Stop AB 32

Yesterday, it was announced that California voters will decide the fate of the state's global warming and cap and trade bill, AB 32. Under AB32, California must reduce greenhouse gas emissions by 25 percent by 2020, returning them to 1990 levels. AB32's proponents call it a vital step in efforts to curb greenhouse gases and create green jobs that will serve as a model for other states of what the costs and benefits of a cap and trade/ climate change bill. Many groups have weighed in on the projected costs and benefits, but now, in true California fashion, the variously funded political action groups are bringing it to the ballot. The measure expected to be on November's ballot would suspend AB32 until California's unemployment rate, currently at 12.5 percent, stays at 5.5 percent or below for four consecutive quarters, which is a very aggressive employment target. The unemployed, energy companies and economic fears will be pitted against global warming fears and environmental activists.

High unemployment in California which has been hard hit during the recent recession combined with a report by Sanjay Varshney and Dennis H. Tootelian, Ph.D. of California State University, Sacramento that concluded 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. The increased costs generated by the AB 32 program, would force cuts in discretionary spending by 26.2%. The study’s cost analysis was based on the California Air Resources Board’s (CARB) findings, which revealed significant cost increases. The study found that the California Resource Board had significantly underestimated these costs. Unemployment in California is now 12.5% which translates to 2,303,000 people before the implementation of AB 32. If another 1,100,000 people are added to that total unemployment would reach 3,403,000 or 18.6%.

Circulating on cable is the NOVA program on AB 32. In a well produced program NOVA conducts interviews with Governor Schwarzenegger, skeptics and supporters of the plan, and ordinary citizens and businesspeople whose lives will change significantly when the new regulations take effect. The sense of urgency expressed by the Governor is acute, because he fully believes in the Global Warming models that project that California is particularly susceptible to the effects of climate change. The recently ended drought touted as a harbinger of things to come resulted in devastating wildfires and chronic water shortages in large sections of the state and fueled those concerns. While high unemployment has fuels the concerns for economic devastation resulting from the law. So the lines are drawn and now we get science and facts by popular vote. Reality in California.