Why Dismantling California’s AB32 Is Bad for Small Business

By: Cynthia Verdugo-Peralta

When it comes to achieving sustained economic recovery in California, it seems that some individuals, who presently have the bully pulpit, are asking all the wrong questions—and not surprisingly, coming up with all the wrong answers.  They wonder–“What can we do to ‘protect’ California’s economy from AB32 (the state’s landmark energy security and climate law)?”  Their answer (ironically called the “California Jobs Initiative”): Dismantle AB32 through a ballot initiative that could end up costing California jobs, long-term economic stability, as well as improved air quality, which could result in the reduction of negative health effects from air pollution.

A better question we should be asking is: How do we sustain California’s long-term economic growth, job creation, energy security and prosperity?  The answer is not to throw away AB32 and all the potentially positive effects it will bring, both economically and environmentally.

The most comprehensive accounting to date of California’s green businesses, green jobs and green job growth, released recently by Next 10, shows that green businesses have increased 45 percent, with employment increasing 36 percent from 1995 to 2008.  Total jobs in California expanded only 13 percent over that same time period.  In the Los Angeles area, renewable energy generation jobs grew by 35 percent and energy efficiency jobs grew by 77 percent.  Additionally, as the economy slowed between 2007 and 2008, total employment in California fell 1 percent, but green jobs grew by 5 percent.  That is significant.  A surefire way to ensure that these jobs migrate to other states and overseas is to dismantle AB32.

I say “migrate” because if California does not grow these jobs, they will not simply vanish from the global economy – they will go elsewhere.  Other states and countries are developing them now.   Energy, by revenue, is the largest sector of the global economy. Countries like China are already jumping on the bandwagon—investing 12.6 million dollars every hour in clean, safe energy technology.

Having served two terms on the South Coast Air Quality Management District Board, I have observed that too often, critics forget to factor in health costs related to poor air quality.  The Los Angeles Basin and the San Joaquin Valley have the dirtiest air in the nation. It is estimated that our polluted air costs residents in Southern California $1,250 per person, per year due to premature death, chronic illness, hospitalizations, as well as missed school and work days.

If critics succeed in dismantling AB32 not only will our air quality suffer, our state will also remain dependent on the ever-dwindling supply of polluting fossil fuels, affecting our energy security.  It will reduce our competitiveness in the world economic and cutting-edge technology markets.  Make no mistake, other states and other countries, such as Germany, are passing us up when California was once the leader in these fields.  Is that what we want?

California’s history demonstrates that greater efficiency drives economic growth, which better positions our state to compete in the global market.  Today California’s energy bills are 56 percent lower than Texas’ – not because the cost of energy per kilowatt-hour is lower—but because we are more energy efficient.  Innovative energy policies, instituted in the 1970s, have saved California consumers $56 billion and created 1.5 million fulltime jobs with a payroll of $45 billion. Where would we be today if we had dismantled our innovative building and appliance standard policies in their infancy?

AB 32 also drives investment into our state, creating the market certainty clean energy companies need to start venturing into and competing with the fossil fuel dominated energy sector.  Recently Better Place, a Palo Alto company that supplies services for electric cars, was awarded the largest round of clean tech venture capital ever ($350 million) by any U.S. or European company.  Last year, $2.1 billion in venture capital poured into California.

Understanding the political, economic, energy security and health costs of oil dependence and the price tag of inefficiency for homeowners and small businesses alike; business owners, like myself, are standing firmly behind AB 32.  California’s economy will recover quicker and will be more robust, if we choose to invest in homegrown green jobs, increased energy efficiency, clean air and the development of alternative sources of clean energy.

Cynthia Verdugo-Peralta, an Air Pollution Control and certified Energy Efficiency/Conservation Specialist, is the Founder, President and CEO of VPC Energy, Inc and SEETA, Strategic Energy, Environmental & Transportation Alternatives.  She served two terms as the Air Pollution Control Specialist on the South Coast Air Quality Management District Governing Board; is the former Chair of the California Fuel Cell Partnership and former President of the Asthma & Allergy Foundation of America-CA Chapter. She has received numerous awards for Environmental Stewardship, Public Education and Outreach, as well as Leadership in Alternative Transportation.

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