California’s quest to lead the country by becoming the first state to impose limits on greenhouse gas emissions could be called bold and pioneering.
But it also could be called stupid. Pioneers, after all, were the ones with all those arrows sticking out of them.
It’s nice and everything to be an eco-friendly state. But here’s the problem: If California becomes the first state and maybe the only state to force businesses to chop their emissions, it will increase costs to consumers and will be one more temptation for the affected businesses to leave California.
The background: Early last week, Gov. Arnold Schwarzenegger released a report from his environmental advisors that recommended the state require businesses to report the amount of carbon dioxide and other so-called greenhouse gases they create. That’s an early step in a march to cap the amount of emissions from individual businesses.
That was followed by a bill backed by Assembly Speaker Fabian Nunez, a Democrat from Los Angeles, that called for stricter action. It would direct the California Air Resources Board to force businesses to reduce their emissions. The bill would require that greenhouse gases be reduced by 25 percent from current forecasts by 2020. That would bring emissions back to the 1990 level.
Some hailed the move as a way for California to lead a kind of uprising by the states to limit greenhouse gases, since the federal government has balked on adopting the Kyoto accord to do so.
Fran Pavley, a Democratic Assembly member from Agoura Hills and a co-sponsor of the bill, was quoted in the New York Times, apparently at a moment she was filled with hubris for her state, as saying: “As California leads and innovates, we believe that Congress and other states will also implement economy wide clean energy standards.”
Well, maybe so. But maybe not. The danger for California is that the federal government will do nothing of the sort. And if many other states do nothing, then California will be out there all alone, requiring businesses to do things that others don’t.
Electricity would get more expensive. Power plants would have to cut emissions, which is costly, or more electricity would have to be imported to the state, which is costly. Either way, we power consumers will have to pay more.
Gasoline would get more expensive. Refineries will have to cut emissions or more refined gasoline will have to be shipped in (which is energy inefficient). Either way, it means those little numbers on the gas pumps will spin even faster.
If businesses are forced to take expensive and cumbersome steps to do something they wouldn’t have to do across the state line, those businesses have one more excuse to move out of California.
For that matter, if smokestack businesses are chased out of state, some could cluster in a business-friendly state or in countries with fewer environmental standards than the United States. And that could lead to an increase in emissions globally.
Since greenhouse gases are a global, not a state, issue, a far better route is to defer to the federal government and have national or even global standards. If everyone is subject to the same rules, then there’d be little incentive for businesses to move from California.
*Charles Crumpley is editor of the Business Journal. He can be reached at
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