For years, energy costs in California have been going up and up. Taxes on gasoline are almost the highest in the country; gas prices are third highest. The Los Angeles Department of Water and Power has been raising our electricity rates and wants to raise them even more, largely because of the cost of global warming regulations that require a transition to renewable fuels.
Now we’re facing even higher energy bills and the possible loss of thousands of jobs because of the California Air Resources Board’s plan to launch a cap-and-trade auction this week as part of the agency’s effort to reduce carbon emissions under the state’s global warming law, AB 32. According to a diverse and growing chorus of experts, and the regulated entities themselves, this auction will cost billions of dollars – costs likely to be passed along to our businesses, families and communities in the form of higher electricity rates, higher gas prices, and higher costs for food and other essential products we use every day.
The resulting loss in operating revenue for small businesses means they’ll have less money for payroll – so we can expect to see more local job losses.
A recent Boston Consulting study focused on the impact of the cap-and-trade auction and other AB 32 regulations on the refining industry – which is important because Los Angeles is home to several refineries that are among the area’s largest employers. Boston Consulting concluded that as a result of the auction and other AB 32 regulations, as many as half of California’s refineries could cease production by 2020.
This would be devastating for our communities. Not only would some local workers lose their well-paying jobs and benefits, but local businesses that support those facilities would lose customers. Our communities would lose tax dollars that help pay for schools and other public services. It’s probable that the same scenario will repeat itself as other large employers struggle to meet AB 32’s financial demands.
CARB has held public meetings about to how to spend revenue from the cap-and-trade auction. But don’t expect much of that money to come to our community any time soon. The state has already claimed much of it to help reduce California’s budget deficit. If there’s any left over, it’s more likely to go to subsidize the makers of electric cars than local restaurants and dry cleaners.
Not that CARB is interested in saving you and me money on our energy bills. The agency’s chairperson has publicly stated that it’s important to put a “price on carbon” in order to force us to use less of the most affordable energy available.
That attitude is inexcusable; especially when you consider CARB itself has acknowledged that global warming is a challenge that must be addressed by the entire world. California acting alone cannot make a measurable difference. And our state’s legislative analyst has concluded that we can meet our carbon reduction goals without this costly auction.
It’s obvious that CARB and its staff aren’t worried about losing their jobs and can afford to pay more for fuel and electricity. But here in the real world, in our communities, the decisions they make can mean the difference between getting a paycheck or being in the unemployment line, the difference between being able to buy groceries for the family or being dependent on food stamps.
Since CARB refuses to act, intervention by the governor is the only hope we have to protect our small businesses, jobs and California’s economy from this multibillion-dollar energy tax.
Gov. Brown, please exercise your authority and stop this unnecessary auction now.
Andrew Barrera is a member of the Los Angeles Metropolitan Hispanic Chamber of Commerce.
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