Friday, February 5, 2010

Repeal AB 32

California Assemblyman Dan Logue is correct in attempting to hobble AB 32, which he tried unsuccessfully through legislation and is now trying with a ballot initiative. Democrats in the legislature have the mistaken belief that AB 32 is already creating jobs, and will create many more in California. They have studies by consultants that prove this. Yet they are wrong.

I wrote earlier on AB 32 and Green Jobs here.

The basis of AB 32, its underlying foundation, is that producing energy without carbon emissions will ultimately put more cash in consumers’ pockets. The extra cash, disposable income, will then be used to purchase more goods and services and create jobs that supply those goods and services.

California’s Air Resources Board paid for an economic analysis of AB 32. That economic analysis concluded that the extra cash involved is $4 to $5 per week per person, enough for a large latte coffee. Yet the economic analysis was severely flawed. Two things are supposed to occur under AB 32: 1) electric power prices increase due to large quantities of renewable power such as solar, wind, and geothermal, and 2) electric demand per capita decreases due to better insulation and more efficient appliances. The only thing certain to happen is electric power prices will indeed increase, yet the decrease in electric demand is not likely to occur. Even if demand decreases, it will not decrease uniformly and therein lies a big problem.

AB 32, when fully implemented, will place a disproportionate burden on the poor and those on fixed incomes, such as retirees, the poor, elderly, and those who just barely get by from paycheck to paycheck. Prices for all goods and services will increase, as they must when utility prices increase yet there is no opportunity to upgrade the insulation or appliances in a rented apartment or home, or leased business space. Only landlords can perform such upgrades, and they have zero incentive to do so. I wrote on this here.

If green policies such as AB 32 created jobs, then California would long ago have had the lowest unemployment rate in the nation. California already has the highest percentage of green (renewable-generated) electricity in the USA, already has draconian environmental laws for air emissions, yet the unemployment rate is one of the highest in the nation at 12.3 percent.

Assemblyman Logue is absolutely correct.

Roger E. Sowell, Esq.

Marina del Rey, California

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