Global Warming Solutions Act Part I: Bad for Business or a Pathway to Better Business?


When Governor Schwarzenegger signed California’s landmark Global Warming Solutions Act, or AB 32, in 2006, the move was applauded as a bipartisan victory and as bold, visionary, forward-thinking legislation. But some industry groups are complaining that the implementation of the legislation, which calls for a statewide greenhouse gas emissions cap for 2020, based on 1990 emissions, will be too costly, will weaken the State’s economy and will actually harm the environment.
Late last year, the California Air Resources Board (CARB), which is tasked with developing the regulations and market mechanisms to achieve the reductions, finalized its plan of attack, called the Scoping Plan for AB 32. And in response, the AB 32 Implementation Group, whose stated goal is to “ensure that the greenhouse gas emission reductions required are achieved while maintaining the competitiveness of California businesses and protecting the interests of consumers and workers,” said in a statement that “CARB’s economic analysis doesn’t address what the actual costs will be for the State to implement AB 32,” and accused the board of not heeding the findings of groups such as the Legislative Analysts’ Office, which calls the funding plans for the bill unsustainable and suggests holding off on implementing budgeting for the Act until the Schwarzenegger can produce a stable, long-term funding plan.

Against the backdrop of an intense recession and the State’s $42 billion deficit, it would be irresponsible to not take a closer look at the costs associated with AB 32. But California Assemblyman Dan Logue’s bill to suspend AB 32, based on claims that it has already “crippled our ability to compete in the global economy, “isn’t the prudent way to address the twin needs of emissions reductions and jobs retention. A less radical reaction is articulated in this analysis by environmental think tank VerdeXchange, the main point of which is that yes, AB 32 is going to cost industry and taxpayers a lot of money, and that’ll be a waste if it does not also result in real transformation in how companies do business, whether they are based California or elsewhere.
Logue claims that AB 32 will result in greater environmental degradation because it will only encourage companies to outsource production to places such as China, where environmental regulations are, at best, poor. Good point. But that calls for more international cooperation in addition to regulations at home, not instead of them. In the end, companies that find ways to grow their businesses while limiting their environmental impacts will come out on top.
Case in point: DuPont used to spend $1 billion each year on environmental compliance (basically, cleaning up the messes it made). It spent the same amount on research and development. That was not a sustainable business practice.
In Part II, we’ll look at some companies that are making strides toward changing their business models not just to accommodate pending legislation, such as AB 32, but to pioneer better business practices. And we’ll look at innovations that might help businesses change.

Freelance writer Mary Catherine O'Connor finds that a growing number of companies are proving the ways that they can make good financially, socially and environmentally (as the triple bottom line theory suggests).With that in mind, she contributes to Triple Pundit, as well as to Earth2Tech and other pubs focused on sustainability. She also writes The Good Route, an Outside Magazine blog that addresses the intersection of sustainability and the active/outdoor life.To find out more, or to reach her, go to

5 responses

  1. I am a native-born Oregonian with a birth year of 1945 and have lived in the Portland Metropolitan Area for most of my life. When I was a little girl, the Willamette River was so polluted, people could take an empty bucket down to the Swan Island area and go home with it full of crawfish (known as “crawdads” in my neighborhood) to provide a feast for a family of eight. You see, crawfish thrive in polluted water; they are bottom feeders. The Willamette River stayed polluted for years and years due to the lack of a plan to clean it up without destroying the industries housed along its shores from Eugene to the most northern point of Portland where it empties into the Columbia River. Water sports, particularly swimming, in the Willamette were not recommended.
    Some years later in 1966, a fellow by the name of Tom McCall was elected Governor. One of his campaign promises was to clean up the Willamette River with a program of issuing “permits to pollute” to industries along the river which emptied their industrial wastes into the river. The permits were very costly, depended on the measured amounts of polluting substances and had a deadline for each company to build filtering and/or purification systems in order to continue emptying fluid wastes into the River. By 1970, my friends and I were water skiing in a clean river and salmon were returning their run after years of absence.
    The same system of incentives for industrial air polluters was initiated at the same time and worked equally as well. Motorists on I-5 no longer had to keep an eye out for the Albany City signs to know when to close their windows and vents to avoid the stench of sulfur coming from the chimney of the paper mill that sat adjacent to the freeway. During the time the mill still operated after they had installed a chimney filtering system, coming through that area of I-5 was no longer repugnant. Sadly, while those industries complied, most were connected with the timber industry and have closed. I say sadly because the lack of inspection and enforcement, as well as more boat, jet ski, and water ski traffic have led to return of a fairly high level of pollution to the Willamette River. I would not want my grandchildren to play in it.
    All of this to point out efforts to “go green” need to done with careful consideration, planning, community participation, funding, enforcement, and a long-term documentation and reporting system to obtain the desired results. Since we do not live in a static environment, we must plan for flexible programs that can adapt in order to continually produce desirable results.
    Then of course, let us be sure to allow for the KISS approach (Keep It Simple, Silly!). For instance, the problem of high levels of carbon dioxide pollutants in our air just might be signficantly relieved with an aggressive program as simple as removing areas of asphalt, concrete, dying and dead growth, then replanting trees, plants and native flowers which live on carbon dioxide and produce the very air we breathe.
    So, all of you out there who are passionate about an all-green world, be considerate and listen to alternatives from all sides of the compass.
    Keep Sweet and Be Peaceable!

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