The PRI notes that, the Cost of AB 32 on California Small Businesses, commissioned by the California Small Business Roundtable, concluded that the plan could result in average annual losses of $182.6 billion in gross state output, from small businesses alone. That would translate to nearly 1.1 million lost jobs. The report also estimates a reduction of more than 25 percent in the average family’s discretionary spending.
Critics have dutifully downplayed the validity of this report, charging that it does not consider the potential economic benefits and savings to the state because of energy efficiency, “energy security,” and technology industry stimulation.
Sure, maybe over the long run, Californians might save money from more energy-efficient technologies and decreased needs for additional energy infrastructure.
But at what cost?
“California is staring down the barrel of a $26 billion budget deficit, handing out IOUs to state employees, and its bonds are “within spitting distance of junk,” as The Economist put it. In May, California’s unemployment rate climbed to 11.5 percent, the highest since 1941. Nationwide, almost half of the cities with unemployment rates exceeding 15 percent are in California.
“AB 32 may not be a “solution” to global warming but reducing greenhouse gas emissions is costly. As the Varshney & Associates report notes, the economic damage to California is high, particularly to small business, the backbone of the economy. That reality is unpopular among those who feel that no cost is too great, but the costs remain a necessary part of the dialogue on the appropriate response to climate change concerns.”