Cap-and-trade: Set aside dire predictions and listen to real advice

Sometimes I wonder whether the jobs I create matter to California’s legislators. My design business embraced the goals of AB 32, California’s landmark clean energy and climate law, and we are showing other companies how to save real money while slashing carbon pollution. The concepts we use are simple and universal, and the results suggest that local businesses have nothing to fear from AB 32’s cap and trade program. Unfortunately, in the face of the fossil fuel industry’s dire warnings, such real-world experience seems unwelcome to politicians who have made up their minds.

 

I was invited to speak at a recent public forum about the impact of the state’s cap and trade program on local businesses. The forum was sponsored by Assemblymembers Isadore Hall (D–Compton) and Susan Bonilla (D–Concord) and the Los Angeles Chamber of Commerce. It turned out to be a soapbox for the Western States Petroleum Association (WSPA), regulated entities and some legislators who wanted to blast the upcoming emissions permit auction.

 

As the only employer in the room, I challenged legislators when I said that mainstream small businesses have little to fear from cap and trade. Consider what you can learn from a quarter century of business experience.

 

WSPA’s industry studies essentially warn, “If you make us compete with clean energy and pay for our pollution your economy will suffer grave harm.” It’s an intimidating message, especially in the absence of credible evidence to the contrary. This is why I accepted the invitation; mainstream businesses that have embraced AB 32 are providing this evidence.

 

Nobody says the business community is clamoring for more regulation. But remember that those who dive in and solve these challenges are not likely to complain at business roundtables. They simply go back to work. You’ll find some of these business leaders on the list of Cool California Business of the Year award winners.

 

Few seem to realize that business owners are Californians too, and we want cleaner, healthier communities as much as our neighbors do. Many of us need to learn how to contribute, and this is why you should listen to those of us who can offer practical, real-world advice.

 

While my company is not a manufacturer, the strategies that helped us save so much money apply across the board. Often, one decision triggers a cascade of savings. For example, replacing one office copier with a multifunction machine allowed us to eliminate several other machines and realize a combined savings on energy, supplies and service. Replacing a company-owned car with a hybrid netted significant savings on gasoline, plus insurance and maintenance. Rearranging oversight visits to local manufacturers cut reimbursed mileage costs in half.

 

Our specific actions reflect our circumstances, but savvy business owners in other industries are telling similar stories. Moreover, the state is helping manufacturers adapt through incentives on energy efficient lighting, heating and air conditioning, and cool roofs.

 

For these reasons, higher energy prices need not drive our companies out of business or out of California. In fact, many manufacturers operate in high-rent areas of Los Angeles and Orange Counties, and the San Francisco Bay Area because it pays to be located close to customers’ headquarters. For example, most of the manufacturing in North America’s $250 billion exhibition industry is local. California’s exhibit manufacturers maintain their share of the market despite lower prices in other states. Cost is not always the primary consideration.

 

Sadly, some legislators tend to dismiss these invaluable lessons as anecdotal. But the results are quite real. Granted, a business that employs a handful of people might seem like a curiosity, but tens of thousands of California employers can embrace AB 32’s goals by applying these simple principles; many of them already are. Wise leaders would help spread the word, encourage better energy and cost management and build momentum in our small business economy. Embracing change successfully is far better than succumbing to the dire predictions of an industry that is desperately trying to preserve its crumbling monopoly.

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